Company registration number 09506166 (England and Wales)
MOORDALE FOODS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
MOORDALE FOODS LIMITED
COMPANY INFORMATION
Directors
Mr C R Arnett
Mr N Arnett
Mr A Arnett
Mr R Arnett
Company number
09506166
Registered office
Unicorn House
Broad Lane
Gilberdyke
Brough
HU15 2TS
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
MOORDALE FOODS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 27
MOORDALE FOODS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
The principal activity of the company is that of a manufacturer and distributor of the Cartwright and Butler brand.
Following a strong year in the previous year, the year ended 31 March 2023 has seen further growth. The company has seen an increase in revenue of 7% versus the prior year. This shows that the company’s brand is continuing to strengthen. However, profit before tax reduced by 2% which is a result of reducing costs of products throughout the year. Further to this, overheads grew by 17% due to the ongoing strengthening of the senior leadership team and strategic marketing campaigns. Although these costs increased, the company has a foundation, bringing in qualified people, to support the continued growth. This growth will be achieved by increasing market share and expanding into other markets at home and overseas.
Net assets have increased by over £792,000 in the year to £5.5m with cash increasing by over £862,000 to £1.9m. The main reason for this is the increased creditors due to favourable terms. This is enabling the company to ride demand, especially with further growth expected. Overall, the company is in a stable place, with a strong foundation, strong brand and resources to see further targeted growth of over 20% in the next financial year.
The company incurs research and development expenses in order to advance the quality and range of the company’s products and service offering. These plans are ongoing.
We have invested in our own Bakery to strengthen current products within our supply chain and ongoing new product development.
MOORDALE FOODS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Principal risks and uncertainties
Financial risk management
In the normal course of business, the company is exposed to foreign exchange risks, credit risks and liquidity risks. The company deals in foreign currency, mainly the US Dollar purchasing items from overseas. Forward contracts have been entered into post year end to look to mitigate this where necessary. Credit risk is always present by offering credit terms to some customers. Credit referencing agencies are used for any new and existing customers and internal company policies on offering credit is in place. The company has liquidity risk also, especially whilst increasing stock levels to dampen supply chain challenges. The company still has sufficient cash resources and facilities in place that these risks can be monitored and controlled.
Key markets
A downturn in one or more of the company’s key markets could have an adverse impact on revenue and profitability. The markets the company operates in vary widely from online, in high street retailers to corporate gifting. As there are so many different markets, the company is able to ride fluctuations in demand from different customer groups and at the same time try to establish themselves in other increasing markets.
Competitor activity
Depending on what competitors develop and the size of the market share that they hold, this could have impact on the company’s own market share. As there is no direct competitor that is situated in so many different markets, this should have little impact on the company.
Supply chain
Over the past year there have been difficulties sourcing the materials required and on the most efficient timescale. Delays from overseas for packaging can have a significant impact on being able to fulfil the sales that the brand is now demanding. The company has invested heavily however in inventory such as packaging in order to have more control over the demand for products.
Key personnel
It could limit the company’s growth potential if key personnel are not recruited and retained. This could be from senior management through to shop floor workers who are needed during seasonal peaks in demand such as Christmas. The company is actively looking towards more efficient ways of working and is improving recruitment and training processes to attract and keep workers in all departments.
Key performance indicators
The key performance indicators that the company reviews are predominantly operating profit, operating profit margin and net assets. The operating profit for the year ended 31 March 2023 was £1.5m (2022: £1.5m). This resulted in an operating margin of 10% (2022: 10%). The reduction in operating profit was predominantly due to increased administrative expenses in areas such as employment costs establishing a qualified team, plus increased marketing costs to obtain the increased revenue.
Mr A Arnett
Director
21 December 2023
MOORDALE FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company is that of a manufacturer and distributor of the Cartwright and Butler brand.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £374,240. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C R Arnett
Mr N Arnett
Mr T Arnett
(Resigned 7 June 2023)
Mr A Arnett
Mr R Arnett
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management, future developments and research and development.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr A Arnett
Director
21 December 2023
MOORDALE FOODS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
MOORDALE FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MOORDALE FOODS LIMITED
- 5 -
Opinion
We have audited the financial statements of Moordale Foods Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
MOORDALE FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MOORDALE FOODS LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
Enquiries with management about any known or suspected instances of non-compliance laws and regulations and fraud;
Enquiry of management and those charged with governance around actual and potential litigation and claims;
Reviewing board minutes;
Auditing the risk of fraud in revenue, including through the testing of income cut off at the period end and through sales transaction testing to provide comfort that revenue is completely stated in the financial statements;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
Auditing the risk of management override of controls, including through testing journal entries for appropriateness and reviewing accounting estimates for bias.
MOORDALE FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MOORDALE FOODS LIMITED
- 7 -
Because of the field in which the client operates, we identified that employment law, health and safety and compliance with the UK Companies Act are the areas most likely to have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Joe Sullivan
Senior Statutory Auditor
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
21 December 2023
MOORDALE FOODS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
15,642,761
14,596,866
Cost of sales
(10,410,610)
(9,905,240)
Gross profit
5,232,151
4,691,626
Administrative expenses
(3,779,900)
(3,242,083)
Other operating income
16,700
Operating profit
4
1,452,251
1,466,243
Interest receivable and similar income
7
15,675
8,186
Interest payable and similar expenses
8
(71,302)
(29,440)
Gain on disposal of fixed asset investments
9
25,000
-
Profit before taxation
1,421,624
1,444,989
Tax on profit
10
(255,011)
(298,586)
Profit for the financial year
1,166,613
1,146,403
Retained earnings brought forward
3,528,949
2,855,546
Dividends
11
(374,240)
(473,000)
Retained earnings carried forward
4,321,322
3,528,949
The statement of income and retained earnings has been prepared on the basis that all operations are continuing operations.
MOORDALE FOODS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
247,677
98,793
Tangible assets
13
1,298,985
1,325,104
Investments
14
176,000
1,546,662
1,599,897
Current assets
Stocks
15
2,810,073
2,763,332
Debtors
16
1,983,782
1,842,165
Cash at bank and in hand
1,877,977
1,015,476
6,671,832
5,620,973
Creditors: amounts falling due within one year
17
(2,162,632)
(1,799,135)
Net current assets
4,509,200
3,821,838
Total assets less current liabilities
6,055,862
5,421,735
Creditors: amounts falling due after more than one year
18
(457,668)
(621,344)
Provisions for liabilities
Deferred tax liability
21
141,672
136,242
(141,672)
(136,242)
Net assets
5,456,522
4,664,149
Capital and reserves
Called up share capital
23
1,135,200
1,135,200
Profit and loss reserves
4,321,322
3,528,949
Total equity
5,456,522
4,664,149
The financial statements were approved by the board of directors and authorised for issue on 21 December 2023 and are signed on its behalf by:
Mr A Arnett
Director
Company Registration No. 09506166
MOORDALE FOODS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
28
1,898,833
(461,517)
Interest paid
(71,302)
(29,440)
Income taxes paid
(261,771)
(271,385)
Net cash inflow/(outflow) from operating activities
1,565,760
(762,342)
Investing activities
Purchase of intangible assets
(218,554)
(80,285)
Purchase of tangible fixed assets
(193,236)
(320,329)
Proceeds from disposal of tangible fixed assets
18,250
12,448
Purchase of associates
(30)
Proceeds from disposal of associates
25,030
Loans made to other related parties
(75,970)
Repayment of loans made to other related parties
187,492
7,537
Interest received
15,675
8,186
Net cash used in investing activities
(165,343)
(448,443)
Financing activities
Repayment of bank loans
(150,000)
(12,500)
Payment of finance leases obligations
(13,676)
(12,677)
Dividends paid
(374,240)
(473,000)
Net cash used in financing activities
(537,916)
(498,177)
Net increase/(decrease) in cash and cash equivalents
862,501
(1,708,962)
Cash and cash equivalents at beginning of year
1,015,476
2,724,438
Cash and cash equivalents at end of year
1,877,977
1,015,476
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
1
Accounting policies
Company information
Moordale Foods Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unicorn House, Broad Lane, Gilberdyke, Brough, HU15 2TS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. In making this assessment, the directors have made reference to budgeted future performance and post year end performance, as well as current banking facilities.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (being on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Software
Straight line over 2 years
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Straight line over 50 years
Property improvements
Straight line over the life of the lease
Plant and machinery
Straight line over 5 years
Fixtures and fittings
Straight line over 6 years
Computer equipment
Straight line over 3 years
Motor vehicles
Straight line over 4 years
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Fixed asset investments
Investments are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Cost is calculated based on the cost of purchase using the weighted average basis.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Other financial assets
All of the company's financial assets are basic financial instruments.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. Trade creditors are recognised initially at transaction price.
Other financial liabilities
All of the company's financial liabilities are basic financial instruments.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. Preference shares have been classified as equity instruments due to the rights attached to them, namely they are redeemable at the discretion of the company, not the shareholders, and dividends are at the discretion of the company.
1.12
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.
1.13
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.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.17
Research expenditure is written off against profits in the year in which it is incurred.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
Stock provision
At each balance sheet date, management undertake an assessment of the value at which stock items are held within the accounts. Making reference to expiry dates on products and expected future orders, an estimation is made by management as to whether the value of the stock is impaired and if a provision is required. The carrying value of stocks are shown in note 15.
Impairment of trade debtors
At each balance sheet date, management undertake a review of the outstanding debtors balances and estimate the balance that should either be impaired or provided against. This calculation is based on the financial position of the customers, the historical speed of payment and any ongoing discussions. The carrying value of trade debtors are shown in note 16.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 16 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Attributable to the principal activity of the company
15,642,761
14,596,866
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
12,721,225
12,006,364
Overseas
2,921,536
2,590,502
15,642,761
14,596,866
2023
2022
£
£
Other revenue
Interest income
15,675
8,186
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
20,702
(117,397)
Fees payable to the company's auditor for the audit of the company's financial statements
15,200
14,275
Depreciation of owned tangible fixed assets
178,550
150,614
Depreciation of tangible fixed assets held under finance leases
11,374
5,626
Loss/(profit) on disposal of tangible fixed assets
11,181
(7,121)
Amortisation of intangible assets
69,670
164,418
Operating lease charges
56,725
37,307
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Warehouse and operations
29
40
Administration
38
33
Total
67
73
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,264,775
2,328,066
Social security costs
214,801
178,826
Pension costs
35,907
31,000
2,515,483
2,537,892
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
36,355
39,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
15,675
8,186
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
68,571
28,614
Other finance costs:
Interest on finance leases and hire purchase contracts
2,731
826
71,302
29,440
9
Gain on disposal of fixed asset investments
2023
2022
£
£
Gain on disposal of fixed asset investments
25,000
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
249,556
261,746
Adjustments in respect of prior periods
25
(2,096)
Total current tax
249,581
259,650
Deferred tax
Origination and reversal of timing differences
7,834
5,943
Changes in tax rates
2,473
32,698
Adjustment in respect of prior periods
(4,877)
295
Total deferred tax
5,430
38,936
Total tax charge
255,011
298,586
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,421,624
1,444,989
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
270,109
274,548
Tax effect of expenses that are not deductible in determining taxable profit
1,857
909
Effect of change in corporation tax rate
2,473
32,698
Permanent capital allowances in excess of depreciation
(15,916)
(11,937)
Depreciation on assets not qualifying for tax allowances
1,340
4,169
Under/(over) provided in prior years
25
(2,096)
Deferred tax adjustments in respect of prior years
(4,877)
295
Taxation charge for the year
255,011
298,586
The Chancellor announced his intention to increase the headline rate of corporation tax to 25% from 1 April 2023. This policy was substantively enacted on 25 May 2021.
11
Dividends
2023
2022
£
£
Final paid
374,240
473,000
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
12
Intangible fixed assets
Software
£
Cost
At 1 April 2022
305,411
Additions - internally developed
59,080
Additions - separately acquired
159,474
At 31 March 2023
523,965
Amortisation and impairment
At 1 April 2022
206,618
Amortisation charged for the year
69,670
At 31 March 2023
276,288
Carrying amount
At 31 March 2023
247,677
At 31 March 2022
98,793
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
13
Tangible fixed assets
Freehold land and buildings
Property improvements
Plant and machinery
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 April 2022
962,544
13,462
458,446
118,089
181,694
74,399
1,808,634
Additions
29,468
12,510
16,419
58,991
75,848
193,236
Disposals
(23,000)
(26,413)
(49,413)
At 31 March 2023
992,012
25,972
451,865
177,080
257,542
47,986
1,952,457
Depreciation and impairment
At 1 April 2022
38,335
3,006
256,435
66,163
100,519
19,072
483,530
Depreciation charged in the year
8,304
4,824
86,514
18,579
63,393
8,310
189,924
Eliminated in respect of disposals
(2,300)
(17,682)
(19,982)
At 31 March 2023
46,639
7,830
340,649
84,742
163,912
9,700
653,472
Carrying amount
At 31 March 2023
945,373
18,142
111,216
92,338
93,630
38,286
1,298,985
At 31 March 2022
924,209
10,456
202,011
51,926
81,175
55,327
1,325,104
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
13
Tangible fixed assets
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
8,908
14,534
Motor vehicles
32,243
46,788
41,151
61,322
14
Fixed asset investments
2023
2022
Notes
£
£
Investments in associates
30
Loans
175,970
176,000
Movements in fixed asset investments
Shares in associates
Loans
Total
£
£
£
Cost
At 1 April 2022
30
175,970
176,000
Disposals
(30)
(175,970)
(176,000)
At 31 March 2023
-
-
-
Carrying amount
At 31 March 2023
-
-
-
At 31 March 2022
30
175,970
176,000
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,810,073
2,763,332
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,424,566
1,350,242
Other debtors
134,763
181,474
Prepayments and accrued income
424,453
310,449
1,983,782
1,842,165
17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
19
150,000
150,000
Obligations under finance leases
20
14,269
14,269
Trade creditors
883,987
626,926
Corporation tax
249,556
261,746
Other taxation and social security
54,901
43,596
Other creditors
529,571
477,749
Accruals and deferred income
280,348
224,849
2,162,632
1,799,135
Hire purchase obligations totalling £14,269 (2022: £14,269) have been secured over the assets to which they relate. Bank loans totalling £150,000 (2022: £150,000) have been secured by way of a personal guarantee by one of the directors limited to a total of £75,000.
18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
19
437,500
587,500
Obligations under finance leases
20
20,168
33,844
457,668
621,344
Hire purchase obligations totalling £20,168 (2022: £33,844) have been secured over the assets to which they relate. Bank loans totalling £437,500 (2022: £587,500) have been secured by way of a personal guarantee by one of the directors limited to a total of £75,000.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
19
Loans and overdrafts
2023
2022
£
£
Bank loans
587,500
737,500
Payable within one year
150,000
150,000
Payable after one year
437,500
587,500
Bank loans are repayable in monthly instalments ending in February 2027, with interest charged at 3.99% above the Bank of England base rate.
20
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
15,902
15,902
In two to five years
23,698
40,105
39,600
56,007
Less: future finance charges
(5,163)
(7,894)
34,437
48,113
Finance lease payments represent rentals payable by the company for certain items of fixed assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
142,391
136,242
Short term timing differences
(719)
-
141,672
136,242
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
21
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 April 2022
136,242
Charge to profit or loss
7,834
Effect of change in tax rate - profit or loss
2,473
Other
(4,877)
Liability at 31 March 2023
141,672
As the company has not finalised its capital expenditure plans for the next financial year, it is not possible to clarify the unwinding of the net deferred tax liability over the next 12 months.
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,907
31,000
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.
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
200
200
1,135,200
1,135,200
Preference shares of £1 each
1,135,000
1,135,000
-
-
The ordinary shares consist of 100 Ordinary £1 shares, 5 Ordinary A £1 shares, 10 Ordinary B £1 shares, 10 Ordinary C £1 shares, 10 Ordinary D £1 shares, 10 Ordinary E £1 shares, 10 Ordinary F £1 shares, 10 Ordinary G £1 shares, 10 Ordinary H £1 shares, 10 Ordinary I £1 shares, 10 Ordinary J £1 shares and 5 Ordinary K £1 shares.
Only the Ordinary £1 shares have voting rights and each class of shares has different rights to dividends. All class of shares rank pari passu in all other respects.
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
24
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
65,141
55,960
Between two and five years
32,352
69,950
97,493
125,910
25
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
36,355
39,000
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Category
Description of
Income
Expenditure
transaction
2023
2022
2023
2022
£
£
£
£
Other related parties
Sales
10,838
12,214
Balances with related parties
Category
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£
£
£
£
Key management personnel
200
11,722
92,621
166,797
Other related parties
33,904
154,852
7,995
12,360
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 26 -
26
Directors' transactions
Dividends totalling £241,740 (2022 - £249,000) were paid in the year in respect of shares held by the company's directors.
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Advance
2.00
11,722
-
22
(11,744)
-
Advance
-
-
5,700
-
(5,500)
200
11,722
5,700
22
(17,244)
200
The advances are unsecured and are repayable on demand.
27
Ultimate controlling party
There is no single controlling party. The company is under ultimate control of the directors.
28
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
1,166,613
1,146,403
Adjustments for:
Taxation charged
255,011
298,586
Finance costs
71,302
29,440
Investment income
(15,675)
(8,186)
Loss/(gain) on disposal of tangible fixed assets
11,181
(7,121)
Amortisation and impairment of intangible assets
69,670
164,418
Depreciation and impairment of tangible fixed assets
189,924
156,240
Gain on sale of investments
(25,000)
-
Movements in working capital:
Increase in stocks
(46,741)
(1,484,858)
Increase in debtors
(153,139)
(547,688)
Increase/(decrease) in creditors
375,687
(208,751)
Cash generated from/(absorbed by) operations
1,898,833
(461,517)
MOORDALE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 27 -
29
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
1,015,476
862,501
1,877,977
Borrowings excluding overdrafts
(737,500)
150,000
(587,500)
Obligations under finance leases
(48,113)
13,676
(34,437)
229,863
1,026,177
1,256,040
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