Registered number:
For the Year Ended
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Delamere Dairy Holdings Limited
Company Information
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Delamere Dairy Holdings Limited
Contents
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Delamere Dairy Holdings Limited
Group Strategic Report
For the Year Ended 31 December 2022
The directors present their Group Strategic Report together with the audited financial statements for the year ended 31 December 2022.
The principal activity of the Group in the year under review was that of dairy product traders, specialising in goats’ and cows’ milk products and a range of plant based dairy alternatives.
Turnover in 2022 increased by 16% to £33.85m (2020 £29.08m) and wholly relates to Delamere Dairy Limited. The increase in turnover is due to inflationary increases, the introduction of new products and customers, and a level of organic growth. Turnover in 2022 bounced back and surpassed both 2021 and 2020 levels. The Group's operating profit decreased by £346k to £291k due to continued supplier cost increases throughout 2022. Re-alignment of selling prices in Q4 2022, some operational improvements and new product listings have seen operating profits recover in 2023. The Group's investments in associates have been impaired by £125k in the period. Group EBITDAE decreased from £1.155m in 2021 to £807k in 2022, mainly as a result of the reduction in operating profit. The war in Ukraine and the evolving post Brexit developments continue to challenge the costs and distribution channels in the business. Increased sales were achieved in the UK market due to a prominently retail-focused customer base, a deepening of distribution within key customers and new product development. Sustained growth in the pet, alternative dairy and the sterilised drinks market cemented the brand within the convenience sector. Delamere Dairy continues to invest in building relationships in territories within and outside of Europe. For this reason, Delamere Dairy’s supply and distribution chain remains under continuous strategic review. Continued investment in new product development will continue to deliver new turnover with several new product lines launching, further strengthening UK sales. During 2022, along with its growing focus on sustainability, Delamere Dairy Limited reviewed its environmental, social and governance (ESG) position and continued to support a Charitable Foundation (Delamere Dairy Foundation). Charitable donations made to the Foundation in this period totalled £102k (£2021: £258k). The Group continued to make timely interest and capital repayments throughout 2022 on the £1.65m term loan taken from Santander in April 2019, the final repayment being due in 2024. Principal risks and uncertainties At the time of writing this report, the Group has navigated the Covid-19 pandemic, learnt to trade within the EU with the post Brexit administrative requirements and stabilised the supply chain disruption and price pressure created by the war in Ukraine. It has been a challenging, extended period. However, we can confirm that, at this time, the business continues to perform well and that risks have been evaluated to ensure that staff, contractors, and investments are protected and that the Group and Company remain a going concern and able to service its liabilities. The Group’s revenues are principally derived from retail markets. These markets, and therefore Group revenues, can be subject to variations in patterns of demand and are largely influenced by political factors, economic growth and consumer confidence. In response to this risk, the directors keep up to date with local and wider economic conditions and can adapt the pricing strategy and cost base of the Group accordingly. The Group continues to seek new markets and categories to facilitate growth. In addition to the close management of credit risk and contractual arrangements, this risk is managed by ensuring the core UK business remains profitable and vibrant.
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Delamere Dairy Holdings Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2022
The Group's operations expose it to a variety of financial risks that include the effects of price risk, credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring the factors that affect each of these risks.
Price risk The Group is exposed to changes in the market prices of its products, both from an input and sales perspective. To protect against adverse price movements, the Company is frequently reviewing its agreements with suppliers to ensure these are on commercially favourable terms. Credit risk Credit risk is managed by running credit checks on new customers and by monitoring payments against the contractual arrangements. Liquidity and interest rate risk The Group's bank loan and invoice discounting facility bears interest at a rate which changes in respect to changes in SONIA or the Bank of England Base Rate, thereby exposing the Company to measured risk on adverse movements in that rate. Foreign exchange risk The Group maintains a natural hedge using foreign currency bank accounts with sales and purchases made in foreign currencies. The Board monitors the net exposure and uses appropriate bank facilities, such as forward contracts, to limit the effects on the financial performance of the Group to such exposure. The Group buys a significant proportion of its products in Euros. FX exposure is managed both by implementing a minimum 3-month Euro forward contracts policy.
We monitor a number of KPI’s within the business though consider our key financial performance indicators, being the operating profit and control of cashflow.
The Group's operating profit for the year was £0.29m (2021: £0.64m) and the Group has closely monitored cashflow throughout the period. Cash at bank and in hand totalled £33k at 31 December 2022 (2021: £11k), with net cash used in operating activities totalling £435k, net cash used in investment activities totalling £275k and net cash used from financing activities totalling £732k.
Non-financial key performance indicators are numerous but centre on employee workforce management, quality and health & safety.
This report was approved by the board and signed on its behalf.
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Delamere Dairy Holdings Limited
Directors' Report
For the Year Ended 31 December 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £86,706 (2021 - profit £401,628).
Dividends of £150,000 (2021: £300,000) were declared and paid during the year. The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
Information on likely future developments has been included in the Strategic Report.
The Group continues to invest in research and development with the purpose of developing new products.
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Delamere Dairy Holdings Limited
Directors' Report (continued)
For the Year Ended 31 December 2022
There have been no significant events affecting the Group since the year end.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Delamere Dairy Holdings Limited
Independent Auditors' Report to the Members of Delamere Dairy Holdings Limited
We have audited the financial statements of Delamere Dairy Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2022, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Delamere Dairy Holdings Limited
Independent Auditors' Report to the Members of Delamere Dairy Holdings Limited (continued)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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Delamere Dairy Holdings Limited
Independent Auditors' Report to the Members of Delamere Dairy Holdings Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group 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:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • The outcome of enquiries of management, including whether management was aware of any instances of non- compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. • Supporting documentation relating to the Company's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud • The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption, the Health and Safety at Work Act 1974 and the Food Safety And Hygiene (England) Regulations 2013. Audit response to risks identified Our procedures to respond to the risks identified included the following: • Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. • Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities. • Enquiring of management about any actual and potential litigation and claims. • Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Delamere Dairy Holdings Limited
Independent Auditors' Report to the Members of Delamere Dairy Holdings Limited (continued)
We have also considered the risk of fraud through management override of controls by: • Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 Auditors' 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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD
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Delamere Dairy Holdings Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Registered number: 06714144
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 35 form part of these financial statements.
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Delamere Dairy Holdings Limited
Registered number: 06714144
Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 35 form part of these financial statements.
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Delamere Dairy Holdings Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2022
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2021
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Delamere Dairy Holdings Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2022
Company Statement of Changes in Equity
For the Year Ended 31 December 2021
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Delamere Dairy Holdings Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Consolidated Analysis of Net Debt
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
Delamere Dairy Holdings Limited is a private company incorporated in England and Wales, company number 06714144. The address of the registered office and the principal place of business is Yew Tree Farm, Bexton Lane, Knutsford, Cheshire, WA16 9BH.
The Company is a non-trading holding company. The nature of the group's operation and its principal activity is that of dairy product traders, specialising in goat's, cow's and sheep milk products and a range of plant based milk alternatives.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Parent Company disclosure exemptions
In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙No Statement of Cash Flows has been presented for the parent Company.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life which is considered to be 10 years. Other intangible assets Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
Depreciation is charged so as to allocated the cost of assets less their residual value over their estimated useful lives. The methods used are as below.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Statement of Comprehensive Income.
An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
Where material, in the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. Any premium on acquisition is dealt with in accordance with the goodwill policy. Where investments in associates are not material to the group, they are recorded at cost in the consolidated financial statements of the group.
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
With the exception of forward foreign exchange contracts, the Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. 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 Consolidated Statement of Comprehensive Income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate.
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date. Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives. The directors believe that judgements, estimates and assumptions do not have a significant risk of causing a material difference to the carrying amount of the assets and liabilities within the next financial year.
The whole of the turnover is attributable to the principal activity of the group.
Analysis of turnover by country of destination:
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
11.Taxation (continued)
From April 2023, the Corporation tax rate increased to 25% for companies making profits greater than £250,000.
This rate change may impact the amount of future tax payments made by the Group and Company.
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
Capital redemption reserve
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £33,548 (2021: £194,603). Contributions totalling £nil (2021: £nil) were payable to the fund at the balance sheet date
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Delamere Dairy Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2022
The company is considered to be under the control of E J Salt, by virtue of his majority shareholding.
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