Company Registration No. 01074448 (England and Wales)
CATERFOOD (SOUTH WEST) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
CATERFOOD (SOUTH WEST) LIMITED
COMPANY INFORMATION
Directors
Mr S D Bender
Mr A M Selley
Ms A Brogan
Company number
01074448
Registered office
814 Leigh Road
Slough
Berkshire
SL1 4BD
Auditor
Darnells Audit Limited
Quay House
Quay Road
Newton Abbot
Devon
TQ12 2BU
Business address
Maple House
Aspen Way
Yalberton Industrial Estate
Paignton
Devon
TQ4 7QR
Bankers
National Westminster Bank Plc
15 Victoria Street
Paignton
Devon
TQ4 5DE
CATERFOOD (SOUTH WEST) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
CATERFOOD (SOUTH WEST) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 1 -
The directors present the strategic report for the year ended 30 June 2021.
Fair review of the business
The directors consider that the key financial performance indicators are Turnover, Gross margin, Earnings before interest, tax, depreciation and amortisation (EBITDA) and Net assets. Together these demonstrate the financial performance and strength of the company. An overview of these indicators for both the current period and the prior year is given below:
Turnover: £19,619,340 (2020: £18,454,569)
Gross profit: £5,906,871 (2020: £5,455,215)
Gross margin: 30.1% (2020: 29.6%)
EBITDA: £1,686,526 (2020: £283,699)
EBITDA margin: 8.6% (2020: 1.5%)
Net assets: £5,912,672 (2020: £4,856,443)
In line with many other businesses operating in the sale and distribution of foodstuffs, Covid-19 continues to affect the performance of the company. The year started strongly aided by the Governments "Eat out to help out" scheme however with local and national lockdowns and other restrictions, trade from October 2020 to March 2021 was behind pre Covid levels. From April 2021 onwards, with the easing of trade restrictions, the company has traded strongly resulting in the company's revenue increasing by £1.2 million, the EBITDA margin increasing by 7.1% and the result before tax increasing by £1.6 million.
The directors believe that the impact of Covid-19 will reduce moving forward as the industry continues to recover. The company has maintained a strong balance sheet position with net current assets of £2.69 million (2020: £1.59 million).
During the year the company received £529,556 (2020: £352,275) of government support in respect of the job retention scheme for furloughed staff. The directors do not expect to utilise the scheme in the next financial year, provided there are no local or national lockdowns.
The directors are satisfied with the company's results for the year, taking into account the impact of Covid-19 on the business, and the continued strength of its balance sheet.
Principal risks and uncertainties
The company's principal operational risks include food safety, health and safety and power failures. The management of food safety risks includes both internal and external audits and inspections. The management of health and safety risks includes a health and safety manual, risk assessments and audits by an external organisation. Reviews by external accreditation bodies also contribute to improvements in these areas. The company manages the risk of power outages by having an agreement in place with Western Power under which the company is on the high priority list for power failures, and Western Power has agreed to provide backup generators in the event of an interruption to the power supply.
The company's principal commercial risks include its reliance on the strength of the tourist industry in the South West of the country and bad debts. The company is committed to continued diversification of its customer base outside of the tourist industry, and particularly outside of the summer season, and is equally committed to the seeking out, introduction and promotion of exciting new lines across its product range, providing continued stimulation for its diverse customer base. Given the current economic environment, significant focus is being placed on the minimisation of bad debt risk, and the company has a dedicated credit control department. New customers are vetted through a credit reference agency before being allowed credit.
The impact of the Covid-19 pandemic is one of the most significant health, social and economic events for the UK and the rest of the world in recent history, and its effects at the date of these financial statements are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. The impact of Covid-19 upon the company's operations is therefore uncertain, and may take many months to become known. In the short term the company has sought out alternative markets, including selling to retail customers directly and has reduced staff numbers to keep the cost base as low as possible.
CATERFOOD (SOUTH WEST) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 2 -
Financial instruments
The company's principal financial instruments comprise of trade debtors and creditors, loans to and from group undertakings, together with bank and other loans.
Due to the nature of the financial instruments used by the company, there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.
Liquidity risk is managed by the directors' monitoring of rolling forecasts and available cash reserves.
In respect of loans, these comprise loans from financial institutions (repaid by 30 June 2021) and loans to and from group undertakings. The interest rate on bank loans is variable but the capital monthly repayments are fixed. The company manages the liquidity risk by ensuring there are sufficient funds to meet the payments. Loans to and from group undertakings are unsecured, interest free and repayable on demand.
Trade debtors are managed in respect of credit and cash flow risk by the implementation of policies that require appropriate credit checks on potential customers before any sales are made. The company has no significant concentration of credit risk.
Trade creditors risk is managed by ensuring that there are sufficient funds available to meet amounts as they fall due.
Mr A M Selley
Director
22 October 2021
CATERFOOD (SOUTH WEST) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 3 -
The directors present their report and financial statements for the year ended 30 June 2021. Information required to be disclosed under Schedule 7 of the Companies Act 2006 is set out in the Strategic Report on pages 1 - 2.
Principal activities
The principal activity of the company continued to be that of the sale and distribution of frozen, chilled and ambient foodstuffs, soft drinks and related provisions to the catering trade.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S D Bender
Mr A M Selley
Ms A Brogan
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Future developments
Despite the impact of Covid-19 on the wider economy, t
he directors are confident the company is in a strong position as it enters
the com
ing year. The directors remain very optimistic and upbeat as they continue their assertive focus on reducing costs whilst striving to expand the company's operations and maintain turnover in the
upcoming
financial year.
Auditor
The auditor, Darnells Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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) including Financial Reporting Standard 101 (FRS 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.
CATERFOOD (SOUTH WEST) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 4 -
Statement of disclosure to auditor
So far as the directors are who held office at the date of approval of these financial statements are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors 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 auditors are aware of that information.
On behalf of the board
Mr A M Selley
Director
22 October 2021
CATERFOOD (SOUTH WEST) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CATERFOOD (SOUTH WEST) LIMITED
- 5 -
Opinion
We have audited the financial statements of Caterfood (South West) Limited (the 'company') for the year ended 30 June 2021 which comprise the statement of comprehensive income, the balance sheet, the 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 FRS 10
1 "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 30 June 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.
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' r
eport 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.
CATERFOOD (SOUTH WEST) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CATERFOOD (SOUTH WEST) LIMITED
- 6 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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 directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting form error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentation or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with those charged with governance of the company and management.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company, and determined the most significant are the Food Safety Act 1990, the Food Safety & Hygiene Regulations 2013, the Food Labelling Regulations 1996, the Health & Safety at Work Act 1974 and the Health & Safety Regulations 1992 & 1999 (as well as IFRS, FRS 101, the Companies Act 2006 and relevant tax compliance regulations in the UK).
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by considering the controls that the company has established to both address risks identified by management and to prevent, deter and detect fraud in the areas of:
We evaluated the conditions in the context of incentives and/or pressure to commit fraud, considering the opportunity to commit fraud and the potential rationalisation of the fraudulent act.
CATERFOOD (SOUTH WEST) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CATERFOOD (SOUTH WEST) LIMITED
- 7 -
Based on this understanding, we designed our audit procedures to detect material misstatements in respect of irregularities, including fraud, and to identify non-compliance with the laws and regulations above, as follows:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims.
-
Enquiry of management in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
-
Reviewing compliance with Food Safety & Hygiene laws and regulations, Food Labelling regulations and Health and Safety laws and regulations.
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
-
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
We corroborated our enquiries through inspection of supporting documentation and records, as well as reviewing correspondence with regulatory bodies where available.
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 members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Paul Beard (Senior Statutory Auditor)
For and on behalf of Darnells Audit Limited
2 November 2021
Statutory Auditor
Quay House
Quay Road
Newton Abbot
Devon
TQ12 2BU
CATERFOOD (SOUTH WEST) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
19,619,340
18,414,569
Cost of sales
(13,712,469)
(12,959,354)
Gross profit
5,906,871
5,455,215
Distribution costs
(3,739,804)
(4,091,909)
Administrative expenses
(1,453,334)
(1,712,395)
Other operating income
4
529,556
352,275
Exceptional costs
5
114,133
(246,554)
Operating profit/(loss)
6
1,357,422
(243,368)
Interest receivable and similar income
983
466
Interest payable and similar expenses
8
(38,042)
(50,616)
Profit/(loss) before taxation
1,320,363
(293,518)
Tax on profit/(loss)
9
(247,618)
59,289
Profit/(loss) for the financial year
1,072,745
(234,229)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CATERFOOD (SOUTH WEST) LIMITED
BALANCE SHEET
AS AT
30 JUNE 2021
30 June 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
3,237,955
3,541,032
Right of use assets
13
117,989
140,584
3,355,944
3,681,616
Current assets
Stocks
14
1,671,599
1,515,942
Debtors
15
4,363,496
2,110,181
Cash at bank and in hand
1,456,709
811,213
7,491,804
4,437,336
Creditors: amounts falling due within one year
16
(4,790,155)
(2,847,770)
Net current assets
2,701,649
1,589,566
Total assets less current liabilities
6,057,593
5,271,182
Creditors: amounts falling due after more than one year
17
(127,257)
(160,519)
Provisions for liabilities
20
(1,148)
(254,220)
Net assets
5,929,188
4,856,443
Capital and reserves
Called up share capital
23
37,500
37,500
Share premium account
92,000
92,000
Profit and loss reserves
5,799,688
4,726,943
Total equity
5,929,188
4,856,443
The financial statements were approved by the board of directors and authorised for issue on 22 October 2021 and are signed on its behalf by:
Mr A M Selley
Director
Company Registration No. 01074448
CATERFOOD (SOUTH WEST) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2019
37,500
92,000
5,810,957
5,940,457
Impact of transition to IFRS 16 at 1 July 2019
(49,785)
(49,785)
Balance at 1 July 2019 as restated
37,500
92,000
5,761,172
5,890,672
Year ended 30 June 2020:
Loss and total comprehensive income for the year
-
-
(234,229)
(234,229)
Dividends
10
-
-
(800,000)
(800,000)
Balance at 30 June 2020
37,500
92,000
4,726,943
4,856,443
Year ended 30 June 2021:
Profit and total comprehensive income for the year
-
-
1,072,745
1,072,745
Balance at 30 June 2021
37,500
92,000
5,799,688
5,929,188
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
- 11 -
1
Accounting policies
Company information
Caterfood (South West) Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
814 Leigh Road, Slough, Berkshire, SL1 4BD.
1.1
Statement of compliance and accounting convention
In preparing these financial statements, the company applies the recognition, measurement and disclosure requirements of International Accounting Standards in conformity with the requirements of the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 10
1
, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit
and
loss
of the company
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Comparative period r
econciliation
s
for
share
capital;
-
Statement of Cash Flows
in respect of p
resentation of a statement of cash
f
low and related notes and disclosures
;
-
IFRS 2
Share based Payment
s
in respect of s
hare-based payment expense
s
charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
IFRS 7
Financial Instrument Disclosures
;
-
Related Party Disclosures
in respect of c
ompensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Bid Corp Limited, the company's ultimate parent company
. These consolidated financial statements are
prepared in accordance with International Financial Reporting Standards and are publicly
available
on the Group's website (www.bidcorpgroup.com)
.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised
when the company satisfies performance obligations and transfers control of goods (usually on dispatch of the goods) or services (represented by marketing charges made to suppliers for inclusion of their products in the company's brochure) to its customers
, 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.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 12 -
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Depreciated over useful life to assets' residual values
Plant and machinery
10% per annum on a straight-line basis
Fixtures, fittings & equipment
20% straight-line and 20% reducing balance per annum
Motor vehicles
20% per annum on a straight-line basis
Other assets
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 and loss
.
Freehold land is not depreciated.
1.5
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost
is calculated on a weighted average basis, and
comprises
direct materials
costs
incurred.
1.6
Financial instruments
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
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.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 13 -
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
paymen
ts 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. A
m
ounts 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.7
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.
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.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 14 -
1.8
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in profit or loss in the period
in which
it arises.
1.9
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Operating leases are brought onto the company's balance sheet with a right-of-use asset and an associated lease liability recognised.
At the commencement date the right-of-use asset is measured at cost, which is equal to the amount of the initial measurement of the lease liability plus payments made less incentives received before the commencement date of the lease.
The lease liability is initially measured at the present value of future lease payments. The present value of unpaid lease payments is the total lease payments unpaid, discounted at the company's incremental borrowing rate.
The right-of-use asset is subsequently measured at cost less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability arising from a reassessment of the lease term, revision to lease break assumptions or revision to in-substance fixed lease repayments.
The depreciation and impairment accounting policies applied to the right-of-use assets are consistent with those applied to the respective tangible asset categories with depreciation charged on a straight-line basis over the lease term.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and adjusted to reflect any reassessment of the lease term. The interest expense is recognised in the profit and loss account.
The company has elected to account for short term leases expiring within 12 months using the practical expedients contained in IFRS 16
Leases
. Instead of recognising a right-of-use asset and a lease liability, the lease payments in relation to such leases are recognised as an expense in Profit and Loss on a straight-line basis over the lease term.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 15 -
1.12
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 16 -
2
Judgements and key sources of estimation uncertainty
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Overriders receivable
Determining the amount of Marketing debtors, overriders, or retrospective discounts, receivable from suppliers at each accounting date requires an estimation of the amounts due based upon the level of purchases and the terms of the discounts with each supplier. The actual amounts of such discounts are generally not known with certainty until after the financial statements have been approved.
At 30 June 2021 the amount of such discounts included in trade debtors was £299,740 (2020: £341,779).
3
Turnover
An analysis of the company's turnover is as follows:
2021
2020
£
£
Sale of goods
19,619,340
18,414,569
All turnover derives from the company's principal activity wholly undertaken in the United Kingdom.
4
Other operating income
2021
2020
£
£
Grants receivable - CJRS furlough scheme
529,556
352,275
5
Exceptional costs
2021
2020
£
£
Expenditure
Redundancy costs
(114,133)
246,554
In 2020 the decision was taken by the directors to reduce staff numbers as part of a cost control exercise. A provision was made for the redundancy costs based on management's best estimate of costs at 30 June 2020.
In 2021 following the relaxation of the Covid-19 restrictions and the opening up of the economy, as well as reductions in staff numbers by staff leaving before the redundancies were formally announced, the number of actual redundancies was significantly less than originally anticipated with the result that £114,133 has been credited back to the Profit and Loss Account increasing Profit before tax and Net assets by that amount.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 17 -
6
Operating profit/(loss)
2021
2020
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
14,056
13,600
Depreciation of owned tangible fixed assets
303,543
500,080
Depreciation of right-of-use assets
25,561
25,561
Profit on disposal of tangible fixed assets
(2,804)
(18,136)
Amortisation of intangible assets
1,426
Short term operating lease charges
54,396
61,392
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Directors
3
4
Sales and marketing
20
24
Transport, distribution and stores
77
91
Administration
11
17
111
136
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
2,788,528
3,119,455
Social security costs
249,479
273,424
Pension costs
49,570
56,112
3,087,577
3,448,991
The directors were also directors of the intermediate parent companies. Details regarding emoluments are disclosed in the financial statements of those companies and those emoluments are borne by those companies. The directors do not believe that it is practicable to apportion these amounts between the services as director of the company and services as director of the fellow group undertakings. Accordingly, no charges for directors’ services have been made to the company.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 18 -
8
Interest payable and similar expenses
2021
2020
£
£
Interest on bank loans
25,845
38,422
Interest on lease obligations
12,197
12,194
38,042
50,616
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
254,136
(24,413)
Deferred tax
Origination and reversal of timing differences
(6,518)
(34,876)
Total tax charge/(credit)
247,618
(59,289)
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit/(loss) before taxation
1,320,363
(293,518)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
250,869
(55,768)
Tax effect of expenses that are not deductible in determining taxable profit
(117)
1,598
Group relief
(934)
Permanent capital allowances in excess of depreciation
(2,200)
(5,119)
Taxation charge/(credit) for the year
247,618
(59,289)
10
Dividends
2021
2020
£
£
Dividend paid
800,000
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 19 -
11
Intangible fixed assets
Software
£
Cost
At 1 July 2020
4,280
Disposals
(4,280)
At 30 June 2021
Amortisation and impairment
At 1 July 2020
4,280
Disposals
(4,280)
At 30 June 2021
Carrying amount
At 30 June 2021
At 30 June 2020
12
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2020
2,560,252
1,043,943
891,352
2,240,183
6,735,730
Additions
11,795
11,795
Disposals
(288,894)
(288,894)
At 30 June 2021
2,560,252
1,043,943
903,147
1,951,289
6,458,631
Depreciation and impairment
At 1 July 2020
326,658
985,823
673,126
1,212,057
3,197,664
Depreciation charged in the year
18,087
51,016
234,440
303,543
Eliminated in respect of disposals
(280,531)
(280,531)
At 30 June 2021
326,658
1,003,910
724,142
1,165,966
3,220,676
Carrying amount
At 30 June 2021
2,233,594
40,033
179,005
785,323
3,237,955
At 30 June 2020
2,233,594
58,120
221,192
1,028,126
3,541,032
No depreciation is provided on freehold buildings as in the opinion of the directors the residual value is at least equal to the carrying value.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 20 -
13
Right-of-use assets
Leasehold property
£
Cost
At 30 June 2020 and 2021
177,393
Depreciation and impairment
At 1 July 2020
33,843
Depreciation charged in the year
25,561
At 30 June 2021
59,404
Carrying amount
At 30 June 2021
117,989
At 30 June 2020
211,236
Leasehold property above represents a right-of-use asset on the lease of a property occupied by the company.
14
Stocks
2021
2020
£
£
Finished goods and goods for resale
1,671,599
1,515,942
15
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,671,753
1,012,426
Corporation tax receivable
34,456
229,312
Amounts owed by group undertakings
1,372,194
552,960
Other debtors
666
106,445
Prepayments and accrued income
284,427
209,038
4,363,496
2,110,181
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 21 -
16
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
18
1,294,965
Lease obligations
19
32,662
27,406
Trade creditors
2,809,674
1,074,367
Amounts owed to group undertakings
1,520,481
165,587
Taxation and social security
135,027
81,147
Other creditors
130,426
61,433
Accruals and deferred income
161,885
142,865
4,790,155
2,847,770
17
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Lease obligations
19
127,257
160,519
Amounts included above which fall due after five years are as follows:
Payable by instalments
19,852
22,965
18
Loans
2021
2020
£
£
Bank loans
1,294,965
Payable within one year
1,294,965
19
Lease obligations
The actual cash flows of the lease repayments are as follows:
Within 1 year
2-5 years
Over more than 5 years
Future cashflows included for renewal periods
Future interest component
Total
£
£
£
£
£
£
Leasehold property
40,200
140,700
-
180,900
(20,981)
159,919
The lease obligations represent the present value of the minimum lease payments, discounted at the company's incremental borrowing rate of 6%.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 22 -
20
Provisions for liabilities
2021
2020
Notes
£
£
Redundancy provision
5
-
246,554
Deferred tax liabilities
21
1,148
7,666
1,148
254,220
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
9,130
16,661
IFRS 16 deferred tax asset
(7,982)
(8,995)
1,148
7,666
2021
Movements in the year:
£
Liability at 1 July 2020
7,666
Credit to profit and loss
(6,518)
Liability at 30 June 2021
1,148
The deferred tax liability set out above relates to accelerated capital allowances, net of an IFRS16 deferred tax asset, that are expected to mature within the foreseeable future.
22
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit and loss in respect of defined contribution schemes
49,570
56,112
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.
CATERFOOD (SOUTH WEST) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 23 -
23
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
37,500
37,500
37,500
37,500
The company has one class of ordinary shares which carry no right to fixed income.
24
Contingent liabilities
There is a cross-guarantee in favour of National Westminster Bank Plc. between the company, its parent company (Caterfood Holdings Limited) and fellow subsidiaries (Yarde Farm Limited, Quality Cuisine (South West) Limited and Motec (SW) Limited) covering all the bank borrowings of the group.
25
Related party transactions
The company has taken advantage of the exemption under IFRS from disclosing intra-group transactions where each party to the transaction is wholly-owned by the group.
26
Parent company
The immediate parent company is Caterfood Holdings Limited, a company incorporated in England & Wales. The ultimate parent company of Caterfood Holdings Limited is Bid Corporation Limited, a company incorporated in South Africa, whose registered office is 2nd Floor North Wing, 90 Rivonia Road, Sandton, Johannesburg, 2196, South Africa.
The smallest group in which the results of the company are consolidated is headed by Bidcorp Foodservice International Limited. The largest group in which the results of the company are consolidated is headed by Bid Corporation Limited. Copies of the consolidated financial statements of Bid Corporation Limited can be obtained from the Group's website (www.bidcorpgroup.com).
2021-06-30
2020-07-01
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