Company registration number 04126579 (England and Wales)
EURO ACCESSORIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
EURO ACCESSORIES LIMITED
COMPANY INFORMATION
Directors
G M Gilsenan
M Mugford
D K Hughes
J C Funnell
Company number
04126579
Registered office
Units 1-3, Shannon Industrial Estate
Lodge Road
Elworth
Sandbach
Cheshire
CW11 3HP
Auditor
Champion Accountants LLP
1 Worsley Court
High Street
Worsley
Manchester
M28 3NJ
EURO ACCESSORIES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of income and retained earnings
9
Balance sheet
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
EURO ACCESSORIES LIMITED
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
Euro Accessories Limited, headquartered in Sandbach, England, with additional branches in Basingstoke,Hampshire and Armagh, Northern Ireland, specialises in the distribution of concrete reinforcement and precast concrete accessories. We have established ourselves as a leader in quality, innovation and customer service. We are committed to delivering high quality, durable and sustainable products that meet industry standards and customer requirements.
Results and performance
The company's results for the twelve month period, as set out on page 5 align with the Board of Director's forecasts. Turnover reduced slightly from £25,395,006 for the thirteen month period ended 2022 to £24,884,465 for the year to 2023 while profit before tax rose from £1,555,176 in 2022 to £1,820,873. Shareholders funds total £6,178,156 at the balance sheet date.
Business environment
The concrete reinforcement and precast concrete industry are influenced by several external factors.
Economic Conditions, the global and regional economic environment directly impacts construction activity , affecting demand for our products.
Regulatory changes, building costs ,environmental regulations and safety standards are continually evolving, necessitating compliance and adaptation.
Technological Advancements, innovations in material science and production techniques offer opportunities for product improvement and cost reduction.
The industry is competitive, with both local and international players. Maintaining a competitive edge requires continuous investment in technology and customer relationships.
Strategy
Our strategy focuses on five key areas
Product innovation by investing in R & D to develop advanced concrete solutions that meet emerging market needs and regulatory standards.
Operational excellence, implementation of advanced routing software to optimise delivery routes, reduced fuel consumption and minimise delivery times.
Supplier Relationships, strengthen relationships with key suppliers to ensure a reliable supply of products at competitive prices.
Market expansion, entering new geographical markets to diversify our customer base and reduce dependency on existing markets
Sustainability, committing to sustainable practices by reducing our carbon footprint, recycling materials and promoting eco-friendly products .
EURO ACCESSORIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks, Financial Risks and uncertainties
Economic Uncertainty: Uncertainty in the economic landscape or a downturn in the construction industry may result in decreased demand for our products.
Regulatory Changes: Changes in building codes and environmental regulations have the potential to impact our operations and alter our product offerings.
Raw Material Price Volatility: Fluctuations in prices of essential raw materials may lead to variability in our cost structure and affect our overall profitability.
Cash Flow Management: Ensuring adequate liquidity to meet operational requirements and fund capital investments is critical.
Credit Risk Management: Vigilant monitoring of credit risks associated with potential customer defaults, with rigorous credit control measures in place.
Interest Rate Exposure: Managing exposure to fluctuations in interest rates that could influence borrowing costs and financial stability.
Currency Exchange Risk: Mitigating risks associated with currency fluctuations in international markets to safeguard against adverse impacts on financial performance
EURO ACCESSORIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Financial Key Performance Indicators
Euro Accessories Ltd is positioned for sustained growth in the concrete reinforcement and precast concrete industry. Our strategic focus on market expansion, product innovation, operational efficiency, and robust risk management aims to strengthen our competitive edge and deliver superior value to our customers. Continuous monitoring and proactive management of principal and financial risks are crucial to ensuring the long term sustainability and profitability of our operations.
M Mugford
Director
25 September 2024
EURO ACCESSORIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G M Gilsenan
M Mugford
D K Hughes
J C Funnell
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £236,350. The directors do not recommend payment of a further dividend.
Auditor
The auditor, Champion Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
M Mugford
Director
25 September 2024
EURO ACCESSORIES LIMITED
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
EURO ACCESSORIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EURO ACCESSORIES LIMITED
- 6 -
Opinion
We have audited the financial statements of Euro Accessories Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet, 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:
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 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.
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:
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.
EURO ACCESSORIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EURO ACCESSORIES LIMITED (CONTINUED)
- 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:
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
- We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
- We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006 & GDPR.
- We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment
accordingly.
- Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
EURO ACCESSORIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EURO ACCESSORIES LIMITED (CONTINUED)
- 8 -
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
- Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to deferred income, depreciation methods & cut-off.
- Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
- Testing key revenue lines, in particular cut-off, for evidence of management bias.
- Performing a physical verification of key assets and stock items (including testing of the stock system).
- Obtaining third-party confirmation of material bank balances.
- Documenting and verifying all significant related party balances and transactions.
There are inherent limitations in the audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
This report is made solely to the company's member 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 member 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 member for our audit work, for this report, or for the opinions we have formed.
Mark Turner FCA
Senior Statutory Auditor
For and on behalf of Champion Accountants LLP
25 September 2024
Chartered Accountants
Statutory Auditor
1 Worsley Court
High Street
Worsley
Manchester
M28 3NJ
EURO ACCESSORIES LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Year
Period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
24,884,465
25,395,006
Cost of sales
(18,699,801)
(19,663,929)
Gross profit
6,184,664
5,731,077
Administrative expenses
(4,145,308)
(4,010,354)
Operating profit
4
2,039,356
1,720,723
Interest payable and similar expenses
7
(218,483)
(165,547)
Profit before taxation
1,820,873
1,555,176
Tax on profit
8
(453,292)
(275,751)
Profit for the financial year
1,367,581
1,279,425
Retained earnings brought forward
5,006,256
3,826,831
Dividends
9
(236,350)
(100,000)
Retained earnings carried forward
6,137,487
5,006,256
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EURO ACCESSORIES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,203,464
947,763
Current assets
Stocks
11
5,096,657
5,461,925
Debtors
12
5,463,170
6,870,328
Cash at bank and in hand
252,688
45,966
10,812,515
12,378,219
Creditors: amounts falling due within one year
13
(5,251,856)
(7,700,468)
Net current assets
5,560,659
4,677,751
Total assets less current liabilities
6,764,123
5,625,514
Creditors: amounts falling due after more than one year
14
(376,696)
(438,636)
Provisions for liabilities
Deferred tax liability
17
209,271
139,953
(209,271)
(139,953)
Net assets
6,178,156
5,046,925
Capital and reserves
Called up share capital
19
40,669
40,669
Profit and loss reserves
20
6,137,487
5,006,256
Total equity
6,178,156
5,046,925
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
M Mugford
Director
Company registration number 04126579 (England and Wales)
EURO ACCESSORIES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,474,952
858,816
Interest paid
(218,483)
(165,547)
Income taxes paid
(230,222)
(99,348)
Net cash inflow from operating activities
1,026,247
593,921
Investing activities
Purchase of tangible fixed assets
(565,069)
(549,331)
Proceeds on disposal of tangible fixed assets
12,697
73,214
Receipts arising from loans made
6,831
34,657
Net cash used in investing activities
(545,541)
(441,460)
Financing activities
Proceeds from new bank loans
(150,000)
(162,500)
Payment of finance leases obligations
112,366
25,769
Dividends paid
(236,350)
(100,000)
Net cash used in financing activities
(273,984)
(236,731)
Net increase/(decrease) in cash and cash equivalents
206,722
(84,270)
Cash and cash equivalents at beginning of year
45,966
130,236
Cash and cash equivalents at end of year
252,688
45,966
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Euro Accessories Limited is a private company limited by shares incorporated in England and Wales. The registered office is Units 1-3, Shannon Industrial Estate, Lodge Road, Elworth, Sandbach, Cheshire, CW11 3HP.
1.1
Reporting period
The company's reporting period is for the year ended 31 December.2023 The previous reporting period was 13 months, therefore the comparative amounts and related notes presented in the financial statements are not entirely comparable.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.3
Going concern
Atruet 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.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
Over the term of the lease
Plant and equipment
25% reducing balance
Fixtures and fittings
25% reducing balance
Motor vehicles
25% reducing balance
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.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.16
The company discounts its trade debts. The policy is to include trade debts within current assets as trade debtors and to record cash advances within creditors due within one year. Discounting fees and interest are charged to the profit and loss account when incurred. Bad debts are borne by the company and are charged to the profit and loss account when incurred.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are 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.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
24,884,465
25,395,006
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
22,698,521
22,244,025
Overseas
2,185,944
3,150,981
24,884,465
25,395,006
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(39,464)
(123,828)
Fees payable to the company's auditor for the audit of the company's financial statements
6,000
15,400
Depreciation of owned tangible fixed assets
300,952
245,113
Profit on disposal of tangible fixed assets
(4,281)
(20,903)
Operating lease charges
360,707
329,200
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
4
4
Administrative staff
48
51
Total
52
55
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,304,869
2,437,896
Social security costs
244,460
265,971
Pension costs
33,359
58,164
2,582,688
2,762,031
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
369,855
510,825
Company pension contributions to defined contribution schemes
1,715
29,015
371,570
539,840
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
171,200
181,098
Company pension contributions to defined contribution schemes
-
13,000
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
23,040
31,325
Interest on invoice finance arrangements
184,781
125,900
207,821
157,225
Other finance costs:
Interest on finance leases and hire purchase contracts
10,662
8,322
218,483
165,547
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
383,974
229,016
Deferred tax
Origination and reversal of timing differences
69,318
46,735
Total tax charge
453,292
275,751
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,820,873
1,555,176
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
428,269
295,483
Tax effect of expenses that are not deductible in determining taxable profit
9,547
(19,732)
Effect of change in corporation tax rate
36,217
Group relief
(20,625)
Permanent capital allowances in excess of depreciation
(1,172)
Depreciation on assets not qualifying for tax allowances
1,056
Taxation charge for the year
453,292
275,751
9
Dividends
2023
2022
£
£
Final paid
236,350
100,000
10
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
44,905
823,211
301,554
1,159,828
2,329,498
Additions
172,162
57,517
335,390
565,069
Disposals
(93,262)
(93,262)
At 31 December 2023
44,905
995,373
359,071
1,401,956
2,801,305
Depreciation and impairment
At 1 January 2023
22,828
568,506
170,564
619,837
1,381,735
Depreciation charged in the year
4,490
79,272
44,074
173,116
300,952
Eliminated in respect of disposals
(84,846)
(84,846)
At 31 December 2023
27,318
647,778
214,638
708,107
1,597,841
Carrying amount
At 31 December 2023
17,587
347,595
144,433
693,849
1,203,464
At 31 December 2022
22,077
254,705
130,990
539,991
947,763
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Tangible fixed assets
(Continued)
- 20 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
42,342
Motor vehicles
218,344
63,636
218,344
105,978
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
5,096,657
5,461,925
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,626,791
5,110,266
Amounts owed by group undertakings
332,996
1,166,735
Other debtors
132,383
74,076
Prepayments and accrued income
371,000
519,251
5,463,170
6,870,328
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
150,000
150,000
Obligations under finance leases
16
66,648
42,342
Trade creditors
1,719,482
1,971,584
Corporation tax
399,245
245,493
Other taxation and social security
301,425
978,361
Other creditors
2,032,920
3,858,298
Accruals and deferred income
582,136
454,390
5,251,856
7,700,468
Obligations under finance leases and hire purchase contracts are secured against the assets concerned.
Included within other creditors is a balance of £2,251,959 (2022: £3,508,387) due to RBS Invoice Finance Limited which is secured by a fixed and floating charge over the company's assets.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
225,000
375,000
Obligations under finance leases
16
151,696
63,636
376,696
438,636
Obligations under finance leases and hire purchase contracts are secured against the assets concerned.
15
Loans and overdrafts
2023
2022
£
£
Bank loans
375,000
525,000
Payable within one year
150,000
150,000
Payable after one year
225,000
375,000
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
66,648
42,342
In two to five years
151,696
63,636
218,344
105,978
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
-
139,953
Statutory database figures differ from the trial balance:
Deferred tax balances
209,271
139,953
Difference
(209,271)
-
Balance per TB
209,271
Warning - Difference exists; check stat db entries
69,318
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 22 -
There were no deferred tax movements in the year.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
33,359
58,164
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.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
30,502
30,502
30,502
30,502
Ordinary B shares of £1 each
10,167
10,167
10,167
10,167
40,669
40,669
40,669
40,669
20
Profit and loss reserves
This reserve records retained earnings and accumulated losses.
21
Contingent Liabilities
The company has given a cross guarantee amounting to £820,000 as security for loans taken out with the Royal Bank of Scotland by Shannon Properties Limited , a company controlled by common directors and shareholders .
22
Operating lease commitments
Lessee
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
171,592
220,202
Between two and five years
216,267
211,552
387,859
431,754
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
23
Directors' transactions
At the balance sheet date, the company owed to the directors an amount of £27,234 (2022 - £6,831). The loan is interest free with no fixed date of repayment.
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
24
Related party transactions
The company has taken advantage of FRS 102 paragraph 33.1A available to companies producing consolidated group financial statements and chosen not to disclose related party transactions within the group for 100% owned subsidiaries.
During the period, the company paid rent, rates, service charges and insurance charges of £130,200 (2022 - £141,050) to Shannon Properties Limited, a company with common directors and shareholders.
During the year, the company sold goods of £NIL (2022: £486) to Shannon Properties Limited, a company with common directors and shareholders.
During the year, the company purchased goods of £8,089 (2022: £NIL) with Shannon Properties Limited, a company with common directors and shareholders.
At the year end, included within trade creditors, the company owed £30,827 (2022 - £7,980) to Shannon Properties Limited.
At the year end, included within trade debtors, the company was owed £1,063 (2022 - £1,063) from Shannon Properties Limited.
Included within other creditors at the balance sheet date, the company was owed £166,836 (2022 owed to - £11,164) from Shannon Properties Limited.
25
Ultimate controlling party
During the period, 100% of the company's share capital was acquired by Shannon Holdings Limited. The ultimate controlling party continues to be G M Gilsenan by virtue of of his majority shareholding of the issued share capital in Shannon Holdings Limited.
26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,367,581
1,279,425
Adjustments for:
Taxation charged
453,292
275,751
Finance costs
218,483
165,547
Gain on disposal of tangible fixed assets
(4,281)
(20,903)
Depreciation and impairment of tangible fixed assets
300,952
245,113
Movements in working capital:
Decrease/(increase) in stocks
365,268
(1,090,623)
Decrease/(increase) in debtors
1,400,327
(1,023,679)
(Decrease)/increase in creditors
(2,626,670)
1,028,185
Cash generated from operations
1,474,952
858,816
EURO ACCESSORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
27
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
45,966
206,722
252,688
Borrowings excluding overdrafts
(525,000)
150,000
(375,000)
Obligations under finance leases
(105,978)
(112,366)
(218,344)
(585,012)
244,356
(340,656)
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100No description of principal activityG M GilsenanM MugfordD K HughesJ C Funnellfalsefalse041265792023-01-012023-12-3104126579bus:Director12023-01-012023-12-3104126579bus:Director22023-01-012023-12-3104126579bus:Director32023-01-012023-12-3104126579bus:Director42023-01-012023-12-3104126579bus:RegisteredOffice2023-01-012023-12-31041265792023-12-31041265792021-12-012022-12-3104126579core:RetainedEarningsAccumulatedLosses2022-12-3104126579core:RetainedEarningsAccumulatedLosses2021-11-3004126579core:ShareCapital2023-12-3104126579core:ShareCapital2022-12-3104126579core:RetainedEarningsAccumulatedLosses2023-12-3104126579core:RetainedEarningsAccumulatedLosses2022-12-31041265792022-12-3104126579core:ShareCapitalOrdinaryShares2023-12-3104126579core:ShareCapitalOrdinaryShares2022-12-3104126579core:RetainedEarningsAccumulatedLosses2021-12-012022-12-3104126579core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3104126579core:PlantMachinery2023-12-3104126579core:FurnitureFittings2023-12-3104126579core:MotorVehicles2023-12-3104126579core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3104126579core:PlantMachinery2022-12-3104126579core:FurnitureFittings2022-12-3104126579core:MotorVehicles2022-12-3104126579core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3104126579core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3104126579core:Non-currentFinancialInstrumentscore:AfterOneYear2023-12-3104126579core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3104126579core:CurrentFinancialInstruments2023-12-3104126579core:CurrentFinancialInstruments2022-12-3104126579core:Non-currentFinancialInstruments2023-12-3104126579core:Non-currentFinancialInstruments2022-12-310412657912023-01-012023-12-310412657912021-12-012022-12-31041265792022-12-31041265792021-11-3004126579core:LandBuildingscore:LongLeaseholdAssets2023-01-012023-12-3104126579core:PlantMachinery2023-01-012023-12-3104126579core:FurnitureFittings2023-01-012023-12-3104126579core:MotorVehicles2023-01-012023-12-3104126579core:UKTax2023-01-012023-12-3104126579core:UKTax2021-12-012022-12-3104126579core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3104126579core:PlantMachinery2022-12-3104126579core:FurnitureFittings2022-12-3104126579core:MotorVehicles2022-12-3104126579core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3104126579core:WithinOneYear2023-12-3104126579core:WithinOneYear2022-12-3104126579core:BetweenTwoFiveYears2023-12-3104126579core:BetweenTwoFiveYears2022-12-3104126579bus:PrivateLimitedCompanyLtd2023-01-012023-12-3104126579bus:FRS1022023-01-012023-12-3104126579bus:Audited2023-01-012023-12-3104126579bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP