Company registration number 09298775 (England and Wales)
BILLIONS EUROPE LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BILLIONS EUROPE LTD
COMPANY INFORMATION
Directors
Y Dong
J M Reid
Q Shen
(Appointed 16 February 2023)
R Xu
Company number
09298775
Registered office
Winder House
Kingfisher Way
Stockton-on-Tees
TS18 3EX
Auditor
Azets Audit Services
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
BILLIONS EUROPE LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
BILLIONS EUROPE LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Principal activities

The principal activity of the company is the sale of titanium dioxide (TiO2) pigment.

Review of the business

Billions Europe Ltd., is a wholly owned subsidiary of Billions (Hong Kong) Corporation Limited which is in turn a wholly owned subsidiary of LB Group Co., Ltd.

Billions Europe was formed on 6 November 2014 in order to receive the TR52 business divested by Huntsman. TR52 is a high performing specialty grade of titanium dioxide, a fine white pigment with exceptional opacity, dispersion and gloss, used primarily, but not exclusively, for the production of printing ink.

The strategy for the company in 2023 was as follows:

1) Maintain existing global inks business and develop sales of BILLIONS™ TR53, a new reverse printing ink TiO2 pigment
2) Develop sales in Europe into other sectors (e.g., coatings, paper, plastics etc)
3) Extend enhanced local support to European customers in all sectors

Key performance indicators

The key performance indicators were:

1) Sales volume – 30% increase compared with 2022 and the highest since incorporation.
2) Profit – Higher than previous year, reduced average sales prices offset by significant reductions in cost of goods sold
3) Quality rate – including on time in full delivery – targets met
4) Inventory – expanded to meet local supply

Principal risks and uncertainties

Macro-economic risk – Billions Europe is no different to any business in being exposed to the risks of the global economy. The main sales in 2023 were with Europe and South America, but the risk of a down-turn in a single country or region is balanced by the growing potential in other regions.

Global supply chain crisis – the unprecedented disruption in the supply chain experienced during 2021 and 2022 started to ease in 2023 resulting in a reduction in variable costs per ton compared to 2022.

Supply risk – Billions Europe Ltd maintains a safety inventory in key regions to mitigate potential disruption in supply. Inventory was strongly managed in 2023 and saw an overall reduction in holdings whilst controlling the demand experienced from the 30% increase in sales volume.

Section 172(1) statement

The board of directors of Billions Europe Ltd consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172 (1)(a-f) of the act) in the decisions taken during the year ended 31 December 2023.

Engagement with suppliers, customers, and other relationships

The directors ensure that management operate the business in a responsible manner with high standards of conduct and governance as set out in the company's policies. The company recognises the benefit of building strong relationships with its suppliers to ensure a high level of service for our customers.

BILLIONS EUROPE LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

J M Reid
Director
16 September 2024
BILLIONS EUROPE LTD
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.

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Y Dong
J M Reid
Q Shen
(Appointed 16 February 2023)
Y Chen
(Resigned 10 February 2023)
D Liu
(Resigned 10 February 2023)
G Yao
(Resigned 10 February 2023)
R Xu
Financial instruments

Objectives and policies

The company finances its activities with a combination of group borrowings, cash and short term deposits. Overdrafts are used to satisfy short term cash flow requirements. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the Company's operating activities. The Company also enters into derivative transactions, including principally forward currency contracts. The purpose is to manage the currency risks arising from the Company's operations.

Price risk, credit risk, liquidity risk and cash flow risk

See disclosures in the Strategic Report in respect of the financial risk management of the company.

Future developments

See disclosures within the Strategic Report regarding future developments of the company.

 

Going concern

The financial statements have been prepared on a going concern basis. The company meets its day to day working capital requirements through cash generated from operations with the support of its parent undertaking. At the year end the company had net current assets of $7.0m including cash at bank of $9.26m. The company has no external borrowings.

The company’s forecasts and projections for the next twelve months show that the company should be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance and the potential impact on the business of fluctuating shipping costs and potential duty increases. This also considers the effectiveness of available measures to assist in mitigating the impact of such. In the directors’ assessment of possible changes, they have considered a fall in demand, potential cost savings and increases in sales unit prices.

Although the forecast prepared taking account of the matters above support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due, the full impact of inflation increases on the economy and the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.

However, based on the factors set out above, the directors believe that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing of the financial statements and therefore the directors believe it remains appropriate to prepare the financial statements on a going concern basis.

BILLIONS EUROPE LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Auditor

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

Energy and carbon report

The company has taken the exemption from the Streamlined Energy and Carbon reporting requirement as it did not consume in excess of 40,000kWh of energy in the period.

Statement of disclosure to auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

 

On behalf of the board
J M Reid
Director
16 September 2024
BILLIONS EUROPE LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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.

BILLIONS EUROPE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BILLIONS EUROPE LTD
- 6 -
Opinion

We have audited the financial statements of Billions Europe Ltd (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 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:

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.

Opinions on other matters prescribed by the Companies Act 2006

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

BILLIONS EUROPE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BILLIONS EUROPE LTD
- 7 -
Matters on which we are required to report by exception

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

 

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

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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

BILLIONS EUROPE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BILLIONS EUROPE LTD
- 8 -

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we 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.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

We identified the following areas as those most likley to have a material impact on the financial statements; Health and Safety; employment law; and compliance with the UK Companies Act and tax legislation.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Christopher Potter BA (Hons) ACA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
24 September 2024
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
BILLIONS EUROPE LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
$
$
Turnover
3
325,677,095
308,951,706
Cost of sales
(253,553,577)
(306,072,122)
Gross profit
72,123,518
2,879,584
Distribution costs
(40,904,965)
(47,187,771)
Administrative expenses
(2,401,628)
(2,346,832)
Other operating expenses
(67,995)
(2,864,661)
Operating profit/(loss)
4
28,748,930
(49,519,680)
Interest receivable and similar income
8
862,988
960,478
Interest payable and similar expenses
9
-
0
(190,126)
Profit/(loss) before taxation
29,611,918
(48,749,328)
Tax on profit/(loss)
10
(6,817,251)
11,764,620
Profit/(loss) for the financial year
22,794,667
(36,984,708)

The income statement has been prepared on the basis that all operations are continuing operations.

BILLIONS EUROPE LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
$
$
Profit/(loss) for the year
22,794,667
(36,984,708)
Other comprehensive income
-
-
Total comprehensive income for the year
22,794,667
(36,984,708)
BILLIONS EUROPE LTD
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
$
$
$
$
Fixed assets
Tangible assets
11
195,730
187,746
Current assets
Stocks
12
83,182,579
134,648,224
Debtors
13
68,810,215
57,019,488
Cash at bank and in hand
9,256,728
21,566,104
161,249,522
213,233,816
Creditors: amounts falling due within one year
14
(154,253,124)
(229,024,101)
Net current assets/(liabilities)
6,996,398
(15,790,285)
Net assets/(liabilities)
7,192,128
(15,602,539)
Capital and reserves
Called up share capital
17
613,335
613,335
Profit and loss reserves
6,578,793
(16,215,874)
Total equity
7,192,128
(15,602,539)
The financial statements were approved by the board of directors and authorised for issue on 16 September 2024 and are signed on its behalf by:
J  M Reid
Director
Company Registration No. 09298775
BILLIONS EUROPE LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
$
$
$
Balance at 1 January 2022
613,335
20,768,834
21,382,169
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(36,984,708)
(36,984,708)
Balance at 31 December 2022
613,335
(16,215,874)
(15,602,539)
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
22,794,667
22,794,667
Balance at 31 December 2023
613,335
6,578,793
7,192,128
BILLIONS EUROPE LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
$
$
$
$
Cash flows from operating activities
Cash (absorbed by)/generated from operations
19
(12,259,612)
36,605,828
Interest paid
-
0
(190,126)
Income taxes paid
-
0
(1,123,230)
Net cash (outflow)/inflow from operating activities
(12,259,612)
35,292,472
Investing activities
Purchase of tangible fixed assets
(49,764)
(7,186)
Interest received
-
0
80
Net cash used in investing activities
(49,764)
(7,106)
Financing activities
Repayment of bank loans
-
0
(19,210,703)
Net cash used in financing activities
-
(19,210,703)
Net (decrease)/increase in cash and cash equivalents
(12,309,376)
16,074,663
Cash and cash equivalents at beginning of year
21,566,104
5,491,441
Cash and cash equivalents at end of year
9,256,728
21,566,104
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is Winder House, Kingfisher Way, Stockton on Tees, Cleveland, TS18 3EX.

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 US Dollars which is the functional currency of the company.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of LB Group. These consolidated financial statements are available from its registered office.

Parent and ultimate parent undertaking

The company's immediate parent is Billions (Hong Kong) Corporation Limited, incorporated in Hong Kong.

 

The ultimate parent is LB Group. Co. Ltd, incorporated in China.

 

The most senior parent entity producing publicly available consolidated financial statements is LB Group. Co. Ltd. These financial statements are available upon request from Zhongzhan District, Jiaozu City, Henan Province, China.

BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.2
Going concern

The financial statements have been prepared on a going concern basis. The company meets its day to day working capital requirements through cash generated from operations with the support of its parent undertaking. At the year end the company had net current assets of $7.0m including cash at bank of $9.26m. The company has no external borrowings.true

The company’s forecasts and projections for the next twelve months show that the company should be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance and the potential impact on the business of fluctuating shipping costs and potential duty increases. This also considers the effectiveness of available measures to assist in mitigating the impact of such. In the directors’ assessment of possible changes, they have considered a fall in demand, potential cost savings and increases in sales unit prices.

Although the forecast prepared taking account of the matters above support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due, the full impact of inflation increases on the economy and the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.

However, based on the factors set out above, the directors believe that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing of the financial statements and therefore the directors believe it remains appropriate to prepare the financial statements on a going concern basis.

1.3
Turnover

Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts, rebates and value added tax.

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.

1.4
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:

Fixtures and fittings
20% straight line
Office equipment
20% 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.

1.5
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

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.

BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.6
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.

1.7
Financial instruments

A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.

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.

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.

BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

1.8
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.

BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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 income statement, 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.

1.9
Retirement benefits

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

1.10
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.

1.11
Foreign exchange

Transactions in currencies other than US dollars 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.

 

Non-monetary items measured in terms of historical cost in a foreign currency are not translated.

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 amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical judgements

The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

Utilisation of deferred tax asset

A deferred tax asset has been recognised on the basis that the directors believe that it is probable that it will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Forecasts are used to determine the profitability of the company going forward, these are used to support the recoverability of the deferred tax asset.

BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
Key sources of estimation uncertainty
Valuation of stock

The price of TR52 is determined by market rates and therefore is subject to flucuation and a significant decline can affect the whole measurement of stock. Management monitor the price of TR52 and have a transfer price agreement in place with the parent. Management also assess whether a provision is required depending on the price activity of TR52 in the year.

3
Turnover and other revenue
2023
2022
$
$
Turnover analysed by class of business
Sale of goods
325,677,095
308,951,706
2023
2022
$
$
Turnover analysed by geographical market
UK
22,502,626
33,741,023
Europe
238,871,978
185,340,925
Rest of the world
64,302,491
89,869,758
325,677,095
308,951,706
2023
2022
$
$
Other revenue
Interest income
-
80
Foreign exchange gain
862,988
960,398
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
$
$
Depreciation of owned tangible fixed assets
41,780
34,587
Operating lease charges
252
1,589
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
$
$
For audit services
Audit of the financial statements of the company
19,252
18,029
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
6
Employees

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

2023
2022
Number
Number
Management, administrative and other staff
22
19
Directors
3
3
Total
25
22

Their aggregate remuneration comprised:

2023
2022
$
$
Wages and salaries
1,801,274
1,497,515
Social security costs
217,395
215,537
Pension costs
122,672
112,425
2,141,341
1,825,477
7
Directors' remuneration
2023
2022
$
$
Remuneration for qualifying services
284,928
446,735
Company pension contributions to defined contribution schemes
19,790
35,372
304,718
482,107

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
$
$
Remuneration for qualifying services
143,718
219,471
Company pension contributions to defined contribution schemes
16,616
25,785
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
8
Interest receivable and similar income
2023
2022
$
$
Interest income
Interest on bank deposits
-
0
80
Other income
Exchange differences
862,988
960,398
Total income
862,988
960,478
9
Interest payable and similar expenses
2023
2022
$
$
Interest on bank overdrafts and loans
-
178,269
Other interest on financial liabilities
-
0
11,857
-
0
190,126
10
Taxation
2023
2022
$
$
Current tax
UK corporation tax on profits for the current period
2,749,411
(10,923)
Deferred tax
Origination and reversal of timing differences
4,220,644
(9,250,707)
Changes in tax rates
(152,804)
(2,502,990)
Total deferred tax
4,067,840
(11,753,697)
Total tax charge/(credit)
6,817,251
(11,764,620)
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 22 -

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

2023
2022
$
$
Profit/(loss) before taxation
29,611,918
(48,749,328)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
6,964,723
(9,262,372)
Tax effect of expenses that are not deductible in determining taxable profit
5,332
11,665
Under/(over) provided in prior years
-
0
(10,923)
UK deferred tax (credit)/expense relating to changes in tax rates or laws
(152,804)
(2,502,990)
Taxation charge/(credit) for the year
6,817,251
(11,764,620)
11
Tangible fixed assets
Fixtures and fittings
Office equipment
Total
$
$
$
Cost
At 1 January 2023
261,926
160,725
422,651
Additions
-
0
49,764
49,764
Disposals
-
0
(1,368)
(1,368)
At 31 December 2023
261,926
209,121
471,047
Depreciation and impairment
At 1 January 2023
93,317
141,588
234,905
Depreciation charged in the year
25,653
16,127
41,780
Eliminated in respect of disposals
-
0
(1,368)
(1,368)
At 31 December 2023
118,970
156,347
275,317
Carrying amount
At 31 December 2023
142,956
52,774
195,730
At 31 December 2022
168,609
19,137
187,746
12
Stocks
2023
2022
$
$
Other inventories
83,182,579
134,648,224
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
13
Debtors
2023
2022
Amounts falling due within one year:
$
$
Trade debtors
58,707,913
44,514,738
Amounts owed by group undertakings
319,555
317,033
Other debtors
-
0
366,727
Prepayments and accrued income
2,109,426
79,829
61,136,894
45,278,327
Deferred tax asset (note 15)
7,673,321
-
0
68,810,215
45,278,327
2023
2022
Amounts falling due after more than one year:
$
$
Deferred tax asset (note 15)
-
0
11,741,161
Total debtors
68,810,215
57,019,488
14
Creditors: amounts falling due within one year
2023
2022
$
$
Trade creditors
1,324,059
741,089
Amounts owed to group undertakings
135,756,508
212,471,925
Corporation tax
2,749,411
-
0
Other taxation and social security
538,500
731,197
Other creditors
16,230
493,690
Accruals and deferred income
13,868,416
14,586,200
154,253,124
229,024,101
15
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
$
$
Fixed asset timing differences
(26,520)
(17,617)
Tax losses
7,699,841
11,758,778
7,673,321
11,741,161
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
$
Asset at 1 January 2023
(11,741,161)
Charge to profit or loss
4,067,840
Asset at 31 December 2023
(7,673,321)

In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase to 25% from 19%, as previously enacted. This new law was substantively enacted on 24 May 2021. The deferred tax balances at 31 December 2023 have been calculated based on these enacted tax rates.

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
122,672
112,425

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.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of £1 each
500,000
500,000
613,335
613,335
18
Operating lease commitments

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
39,683
45,881
Between two and five years
-
0
41,622
39,683
87,503
BILLIONS EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
19
Cash (absorbed by)/generated from operations
2023
2022
$
$
Profit/(loss) for the year after tax
22,794,667
(36,984,708)
Adjustments for:
Taxation charged/(credited)
6,817,251
(11,764,620)
Finance costs
-
0
190,126
Other income
(862,988)
(960,478)
Depreciation and impairment of tangible fixed assets
41,780
34,587
Foreign exchange gains on cash equivalents
862,988
960,398
Movements in working capital:
Decrease in stocks
51,465,645
610,133
Increase in debtors
(15,858,567)
(7,192,010)
(Decrease)/increase in creditors
(77,520,388)
91,712,400
Cash (absorbed by)/generated from operations
(12,259,612)
36,605,828
20
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
$
$
$
Cash at bank and in hand
21,566,104
(12,309,376)
9,256,728
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