Oriental Merchant (Europe) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04274430 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2021

for

Oriental Merchant (Europe) Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Statement of Directors' Responsibilities

8

Report of the Independent Auditors

9

Statement of Comprehensive Income

12

Statement of Financial Position

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

DIRECTORS:

J T M Vaessen

G G Wu

T J Y Xie

B T K Yiu

REGISTERED OFFICE:

2nd Floor

Woodside House

261 Low Lane

Horsforth

Leeds

LS18 5NY

REGISTERED NUMBER:

04274430 (England and Wales)

AUDITORS:

Shinewing Wilson Accountancy Limited

Chartered Certified Accountants

and Statutory Auditors

9 St Clare Street

London

EC3N 1LQ

BANKERS:

HSBC Bank Plc

Coventry DSC

Harry Weston Road

Binley

West Midlands

CV3 2TQ

The directors present their strategic report for the year ended 31 December 2021.

PRINCIPAL ACTIVITIES

The Company trades as an importer, wholesaler and distributor of authentic Asian Grocery to the UK and European market.

REVIEW OF BUSINESS

With its office in Tyne and Wear, United Kingdom and running on SAP accounting software, the Company is realising its full potential to efficiently bulk purchase from overseas and locally, before distributing from the Dutch warehouse and delivering directly to its customers such as Asian Grocery, Asian Supermarket and Cash & Carry. With increasing orders, the Company is able to service and respond to its customers more efficiently.

In light of the current economic situation, the Company is aware that in line with increasing its market share and expansion, it is also necessary to keep strict control of payment terms and credit extended to its new and existing customers. Management is confident of its business model with food being a daily necessity in everyday life and hence a positive result is budgeted for 2022.

KEY PERFORMANCE INDICATORS

Key performance indicators monitored by the directors are as follows:

2021

2020

£

£

Total turnover

9,282,739

10,176,997

EBITA

1,130,578

346,721

Net profit after tax

903,339

263,295

Net assets / (liabilities)

3,405,385

2,502,046

Total turnover declined by 9% to £9.28 million (2020: £10.18 million) due to a lower volume of sales after Brexit. Total net profit after tax was however higher by £0.64 million, mainly due to higher gross margins and lower selling expenses mainly due to the one off back payment on duty of cooking wine led to significant increase in cost of sales of year 2020.

PRINCIPAL RISKS AND UNCERTAINTIES

Key Individuals

The Company’s future performance depends heavily on its ability to retain the services of its key employees and to be able to retain and attract the services of suitable personnel. The loss of the services of any such key employees could have an adverse impact on the business and the prospects of the Company.

Credit risk

Credit risk arises from cash at bank and credit exposures to customers. Bank balances are maintained within the permitted credit limits set by management who frequently monitor banks' credit ratings. The creditworthiness of customers granted credit terms in the normal course of business are monitored continually. The terms and conditions of credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. Sales are not materially dependent on a single customer or a small group of customers.

Liquidity risk

The Company ensures availability of funding for its operations through an appropriate amount of committed bank facilities on a group wide basis.

Market and Economic Risks

The Company is also exposed to market and economic risks in the normal course of the business. These risks include, but are not limited to, the Company’s ability to market and distribute the Asian grocery products successfully, competition, pressure on pricing from suppliers and customers, contract execution, disruptions to the supply of goods, technology changes, the ability to attract and retain talent and changes to legislation. The Company manages these risks by maintaining strong relationships with customers and suppliers and by group senior management conducting business review on a regular basis to ensure the risks are appropriately managed.

Due to the Brexit we have unavoidable cost due to additional paperwork for custom clearing and double paying off import duties and levy. Also the delay by health authorities and boarder congestions disables us against UK based importers as long as we use the Dutch warehouse to supply the UK. The board is aware of this and we are looking at an earlier own run warehouse in the UK than the planned year 2023.

Since the World Health Organisation's declaration of COVID-19 global health pandemic on 11 March 2020, the Company has witnessed unprecedented measures implemented by various governments on public gatherings, border restrictions and shutdown of non-essential businesses. With ongoing local and global outbreaks being reported, circumstances are changing daily and hence the duration, extent of financial impact and recovery from COVID-19 remained uncertain. The Company will continue to monitor the situation closely and perform ongoing risk assessments for timely implementation of business continuity action plans.

SECTION 172(1) STATEMENT

The Board considers, both individually and collectively, 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 in the decisions taken during the year ended 31 December 2021. The Board acknowledges that every decision it makes will not necessarily result in a positive outcome for all of the Group's stakeholders. In considering the Company's purpose, vision and values, together with its strategic priorities and having a process in place for decision-making the Board does however, aim to make sure that its decisions are consistent and reasonable.

S172(1)(A) The likely consequence of any decision in the long term

The Directors understand the business and the environment in which the Company operates, including the challenges of navigating through the food industry. The Company's purpose is to work towards and continue to be a market leader in providing foodstuffs to UK market while keeping social responsibility fundamental to our business approach. The Directors recognise how our operations are viewed by different parts of society and that some decisions they take today may not align with all stakeholder interests. Given the complexity of the food market, the Directors have taken the decisions they believe best support the Company's long term strategic vision.

S172(1)(B) The interests of the company's employees

The Directors recognise that the employees are essential and core to our operations and for completion of our strategic ambitions. The success of our business is contingent on attracting, retaining and motivating employees. The Directors factor the implications of decisions made by them on employees and the wider workforce, where relevant and possible and also try to ensure that the Company remains a responsible employer in terms of pay, safety and workplace atmosphere.

S172(1)(C) The need to foster the company's business relationships with suppliers, customers and others

The Directors note that achieving our strategy depends on strong mutually beneficial relationships with suppliers, customers and others. The Board actively seeks these mutually beneficial arrangements when entering into any new relationships. The Board also accepts feedback from current relationships and actively promotes the process of improving these relationships.

S172(1)(D) The impact of the company's operations on the community and the environment

The Board believe that this is extremely important and relevant with the industry that the Company operates.

S172(1)(E) The desirability of the company maintaining a reputation for high standards of business conduct

The Company aims to maintain a reputation for high standards of business conduct by achieving its goal of meeting the world's growing need for more healthy and affordable food products.

The Board periodically reviews and approves the codes of practice in place in the Company to ensure that its high standards are maintained both within the Company and the business relationships we maintain.

S172(1)(F) The need to act fairly as between members of the company

The Board acknowledges that every decision it makes will not necessarily result in a positive outcome for all of the Group's stakeholders and that some stakeholder interests may not be aligned with others. After weighing up all factors surrounding the decision and by taking into account the Company's overall vision and goals, the Board aims to make sure that the decisions it makes are dependable and predictable and are most likely to benefit the Company as a whole.

GOING CONCERN

The directors have prepared the financial statements on a going concern basis which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities at the amounts recorded in the financial statements in the ordinary course of business. At 31 December 2021, the Company had net current assets of £1.54 million and net assets of £3.41 million at the balance sheet date. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

ON BEHALF OF THE BOARD:

J T M Vaessen - Director

22 April 2022

The directors present their report with the financial statements of the company for the year ended 31 December 2021.

DIVIDENDS

No dividend was paid during the year (2020: £nil).

FUTURE DEVELOPMENTS

The company’s strategy is built on the achievement of four goals:

1) To strengthen the existing business through operating excellence and satisfying customers’ needs. We focus on driving growth and strengthening our core product range, such as our own brand and sole agent brands and to make Oriental Merchant a brand that is synonymous with value, choice and quality. By providing our customers with a first class service and high quality products, the company aims to strengthen its brand and the way it is perceived in the market. The company intends to continuously expand its product range and distribution through marketing projects, paying particular attention to price and value.

2) To establish a multichannel in all relevant markets to drive customer loyalty. Whilst the retail sector will remain the UK business’ main focus, the company will carry on developing its food service and cash & carry lines to ensure that customer loyalty and relationships are maintained.

3) To develop economies of scale to allow a twofold increase in sales in the next five years. The company is committed to meeting customer expectations for service and choice and will therefore retain its mission of searching for new product lines to bring to the UK market. The company wants to ensure that it becomes tomorrow’s leading wholesaler of Asian foods and has a target of becoming of one of UK's major market participants by operating across England, Scotland, Wales and Northern Ireland and supplying to retailers, wholesalers and cash & carries.

4) To ensure sustainability through responsible long-term management and further strengthen our balance sheet; maintain a very strong focus on the development and management of our team; continue to foster a more inclusive work environment; look after the health, safety and development of our people; and provide appropriate governance structures to safeguard future value creation.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

J T M Vaessen

G G Wu

T J Y Xie

B T K Yiu

Other changes in directors holding office are as follows:

Y Cai and S Yu ceased to be directors after 31 December 2021 but prior to the date of this report.

DIRECTOR'S INSURANCE AND INDEMNITIES

The directors have the benefit of the indemnity provisions contained in the Company's Articles of Association (" Articles"), and the Company has maintained throughout the year directors' and officers' liability insurance for the benefit of the Company, the directors and its officers.The Company has entered into qualifying third party indemnity arrangements for the benefit of all its directors in a form and scope which comply with the requirements of the Companies Act 2006 and which were in force throughout the year and remain in force.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Shinewing Wilson Accountancy Limited, were appointed during the year and have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual General Meeting.

ON BEHALF OF THE BOARD:

J T M Vaessen - Director

22 April 2022

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 101 'Reduced Disclosure Framework'. 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.

Opinion

We have audited the financial statements of Oriental Merchant (Europe) Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 'Reduced Disclosure Framework' (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 2021 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.

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

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

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page eight, 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 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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements.During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

- Those laws and regulations considered to have a direct effect on the financial statements include financial reporting standards FRS101, Company Law, Tax and Pensions legislation, and distributable profits legislation.

- It is considered that no law and regulations for which non-compliance may be fundamental to the operating aspects of the business.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the

appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls,and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Julie Zhuge Wilson (Senior Statutory Auditor)

for and on behalf of Shinewing Wilson Accountancy Limited

Chartered Certified Accountants

and Statutory Auditors

9 St Clare Street

London

EC3N 1LQ

25 April 2022

TURNOVER

4

9,282,739

10,176,997

Cost of sales

7,402,338

8,947,006

GROSS PROFIT

1,880,401

1,229,991

Distribution costs

327,363

362,308

Administrative expenses

429,984

476,955

757,347

839,263

1,123,054

390,728

Other operating income

-

(44,407

)

1,123,054

346,321

Interest receivable and similar income

6,818

-

1,129,872

346,321

Interest payable and similar expenses

6

11,488

20,741

PROFIT BEFORE TAXATION

7

1,118,384

325,580

Tax on profit

8

215,046

62,286

PROFIT FOR THE FINANCIAL YEAR

903,338

263,294

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

903,338

263,294

FIXED ASSETS

Owned

Tangible assets

9

5,436

2,087

Right-of-use

Tangible assets

9, 15

13,181

14,515

Investments

10

1,874,204

1,874,204

1,892,821

1,890,806

CURRENT ASSETS

Stocks

11

130

239,728

Debtors

12

1,580,385

1,912,053

Cash at bank and in hand

406,409

226,078

1,986,924

2,377,859

CREDITORS

Amounts falling due within one year

13

474,361

1,766,619

NET CURRENT ASSETS

1,512,563

611,240

TOTAL ASSETS LESS CURRENT LIABILITIES

3,405,384

2,502,046

CAPITAL AND RESERVES

Called up share capital

16

1

1

Retained earnings

3,405,383

2,502,045

SHAREHOLDERS' FUNDS

3,405,384

2,502,046

The financial statements were approved by the Board of Directors and authorised for issue on 22 April 2022 and were signed on its behalf by:

J T M Vaessen - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2020

1

2,238,751

2,238,752

Changes in equity

Total comprehensive income

-

263,294

263,294

Balance at 31 December 2020

1

2,502,045

2,502,046

Changes in equity

Total comprehensive income

-

903,338

903,338

Balance at 31 December 2021

1

3,405,383

3,405,384

1.	STATUTORY INFORMATION

Oriental Merchant (Europe) Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparation

The financial statements of the Company have been prepared in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). The financial statements have been prepared under the historical cost convention, and in accordance with the Companies Act 2006.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of IFRS 7 Financial Instruments: Disclosures;

•

the requirements of the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases;

the requirements of paragraph 58 of IFRS 16;

•

the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment;

•

the requirements of IAS 7 Statement of Cash Flows;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group.

Where required, equivalent disclosures are given in the consolidated financial statements of Oriental Merchant Pty. Ltd.

Going concern

The directors have prepared the financial statements on a going concern basis which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities at the amounts recorded in the financial statements in the ordinary course of business. The Company made profit of £0.90 million and had net current assets of £1.54 million and net assets of £3.41 million at the balance sheet date. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

New standards, amendments and ifric interpretations

The Company considered the following standards have not had any material impact on the disclosures or on the amounts reported in these financial statements:

-Amendments to IFRS 7, IFRS 4 and IFRS 16 Interest rate benchmark reform - phase 2

-Amendments FRS 101 Reduced disclosure framework 2019/2020 cycle

-Amendments to UK and Republic of Ireland accounting standards UK exit from the European Union

New and revised IFRS Standards in issue but not yet effective

-Amendment to IFRS 16, ‘Leases’ Covid-19 related rent concessions Extension of the practical expedient

-A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16

-Amendments to IAS 1, Presentation of financial statements’ on classification of liabilities

-Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8

-Amendment to IAS 12- deferred tax related to assets and liabilities arising from a single transaction

-IFRS 17, 'Insurance contracts' as amended in December 2021

-Amendments to FRS 101 Reduced disclosure framework 2020/2021

The directors do not expect that the adoption of the Standards listed above will have a material impact on the

financial statements of the Company in future periods.

Preparation of financial statements as an individual company

The financial statements contain information about Oriental Merchant (Europe) Limited as individual company and do not contain consolidated financial information as the parent of a group. The Company is exempt by virtue of section 401 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the Company as an individual undertaking and not about its group.

The immediate parent undertaking, Oriental Merchant Pty Ltd, includes the Company in its consolidated financial statements. The consolidated financial statements of Oriental Merchant Pty Ltd are prepared in accordance with Australian GAAP and are available to the public and may be obtained from the company's principal place of business 10 Westgate Drive, Laverton North Victoria 3026 Australia.

Foreign currency translation

a. Functional and presentation currency

Items included in the financial statements of the company are measured using the currency of the primary economic environment in which the company operates (‘the functional currency’). The financial statements are presented in ‘Pounds Sterling’ (£), which is also the company’s functional currency. All amounts in the financial statements and notes have been rounded off to the nearest Sterling Pound, unless otherwise stated.

b Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement, all other foreign exchange gains and losses are presented in the income statement within ‘Other (expenses)/income’.

Turnover

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the company and specific criteria have been met as described below.

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

- the Company has transferred the significant risks and rewards of ownership to the buyer;

- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the Company will receive the consideration due under the transaction; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from the sale of goods is recongised upon the delivery of goods to customers.

Service

Revenue from the rendering of services to the subsidiary is recognised upon the delivery of the service over the period of time.

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Computer equipment - 25% straight line

Fixture and fittings - 15% reducing balance

Right-of-use assets see note 17 leases

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

A tangible fixed asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Impairment of tangible assets

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

Financial liabilities, including borrowing, are initially measured at fair value, net of transaction costs before subsequently being measured at amortised cost.

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or they expire.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

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

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

- temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through rental income, and the Group has not rebutted this presumption.

Deferred tax assets and liabilities are offset only if certain criteria are met.

Leases

The company leases office, equipment and vehicles. Rental contracts are typically made for fixed periods of 24 months to 3 years

Contracts may contain both lease and non-lease components. The company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the company.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the fixed payments (including in-substance fixed payments), less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in the lease.If that rate cannot be readily determined, which is generally the case for leases in the company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

- The amount of the initial measurement of lease liability;

- Any lease payments made at or before the commencement date less any lease incentives received;

- Any initial direct costs; and

- Restoration costs

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Employee benefit costs

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

Investments in subsidiaries

Investments in subsidiaries are accounted for at cost less, where appropriate, provisions for impairment.

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company's accounting policies, the director is 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.

Critical judgements in applying the Company's accounting policies

There are no key judgements made by management at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Key sources of estimation uncertainty

1. Impairment considerations

The directors have assessed, at the end of the reporting period, whether there is any indication that assets held by the company may be impaired. Based on the assessment performed, the directors are satisfied that there has been no impairment indicator noted for the reporting period ended 31 December 2021.

2. Impairment of investments

The investment in the subsidiary is carried at cost less impairment. The assessment of impairment involves judgement and estimations as to the value of the unquoted investment. At the period end the value of the investment was £1,874,204 (2020: £1,874,204), see Note 10.

4.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

31.12.21

31.12.20

£

£

Revenue from sale of goods

9,056,271

9,847,491

Revenue from service

226,468

329,506

9,282,739

10,176,997

An analysis of turnover by geographical market is given below:

31.12.21

31.12.20

£

£

United Kingdom

8,384,769

9,522,807

Europe

897,970

654,190

9,282,739

10,176,997

5.	EMPLOYEES AND DIRECTORS

31.12.21

31.12.20

£

£

Wages and salaries

230,867

272,253

Social security costs

18,112

20,637

Other pension costs

4,574

4,082

253,553

296,972

The average number of employees during the year was as follows:

31.12.21

31.12.20

Administration

3

3

Sales and distribution

5

5

8

8

31.12.21

31.12.20

£

£

Directors' remuneration

34,722

35,696

£34,722 (2020: £35,696) has been paid to Jacques Vaessen for the year ended 31 December 2021. Apart from Jacques Vaessen, other directors are paid fees or salaries by either the parent entity or the ultimate parent. No charge has been made from the parent to the Company in respect of the other directors' remuneration, in the opinion of the directors it is not possible to determine with reasonable split.

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.21

31.12.20

£

£

Bank loan interest

11,176

20,045

Leasing

312

696

11,488

20,741

7.	PROFIT BEFORE TAXATION

The profit before taxation is stated after charging:

31.12.21

31.12.20

£

£

Cost of inventories recognised as expense

7,402,338

8,947,006

Depreciation - owned assets

704

399

Depreciation - assets on hire purchase contracts or finance leases

31,313

35,134

Auditors' remuneration

10,250

10,250

Taxation compliance services

1,425

1,025

Foreign exchange differences

-

44,407

8.

TAXATION

Analysis of tax expense

31.12.21

31.12.20

£

£

Current tax:

Tax

215,046

62,286

Total tax expense in statement of comprehensive income

215,046

62,286

Factors affecting the tax expense

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.21

31.12.20

£

£

Profit before income tax

1,118,384

325,580

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

212,493

61,860

Effects of:

Tax effect of expenses that not deductible

2,553

426

Tax expense

215,046

62,286

The Finance Act 2021 was substantially enacted in May 2021 and has increased the corporation tax rate from

19% to 25% with effect from 1 April 2023. The deferred taxation balances have been measured using the rates

expected to apply in the reporting periods when the timing differences reverse.

9.	TANGIBLE FIXED ASSETS

Right of

Fixtures

use

and

Computer

assets

fittings

equipment

Totals

£

£

£

£

COST

At 1 January 2021

84,755

1,477

43,375

129,607

Additions

29,979

-

4,053

34,032

At 31 December 2021

114,734

1,477

47,428

163,639

DEPRECIATION

At 1 January 2021

70,240

573

42,192

113,005

Charge for year

31,313

136

568

32,017

At 31 December 2021

101,553

709

42,760

145,022

NET BOOK VALUE

At 31 December 2021

13,181

768

4,668

18,617

At 31 December 2020

14,515

904

1,183

16,602