The directors present the strategic report for the year ended 31 December 2022.
The principal activity of the Company was provision of management services.
Revenue for the period was £1,066,550 (2021: £403,289) with a net loss sustained of £656,166 (2021: £88,559).
At the balance sheet date, the Company had net assets of £20,308,843 (2021: £14,987,026) and cash at bank and in hand of £944,282 (2021: £11,285).
The principal risks facing the Company can broadly be classified as financial. The directors have measures in place in order to mitigate such risks, which have proven to be effective.
Liquidity risk – Liquidity needs to be maintained in order to assist the Company's working capital. Cash is monitored and managed to ensure the Company is able to meet its liabilities as they fall due.
Interest rate risk – The interest charged on the Company's banking facilities is monitored on a regular basis and the rate negotiated where necessary in order to minimise the interest payable.
Foreign exchange rate risk – The Company undertakes transactions in foreign currencies. With the recent volatility of the British Pound, there is a risk of incurring losses on exchange. Procedures are in place to try and minimise this risk which include hedging and matching the currency of receipts and payments.
Price risk – Besides the usual business risks, the Company continues to monitor and manage the impact from the current cost of living crisis within the economy. Input cost pressures are being managed as much as possible and management charges will be reviewed.
The financial results of the Company are reported on page 10 of the financial statements.
The directors do not believe there are any Key Performance Indicators for the Company as an investment and management company that only generates revenue from its Group.
Under the Companies Act 2006, directors have seven general duties to the Group and Company. One of these duties, commonly referred to as the ‘s172 duty’, is ‘to promote the success of the Group and Company’. Part 1 of that duty requires directors to do so ‘for the benefit of its members as a whole’, and in doing so, to have regard to the following six factors:
The likely consequences of any decisions in the long term
We engage with our investors on a regular basis to share our vision and strategy. The Group and Company is fortunate to be backed by investors with a deep understanding of the sector in which we operate and believe in building long-term, successful and innovative partnerships. As part of this we:
Have regular ongoing dialogue between the CEO and Finance Director with our investors to update on developments, market conditions, growth opportunities and any other relevant factors
Hold monthly review calls to review financial performance, address any questions or concerns raised, and discuss collaboratively opportunities to advance the business and drive sustainable, profitable growth
Launched our ‘EPIC’ value set, which align Group goals across our workforce by integrating into objectives and annual appraisals. Individuals nominate colleagues for recognition as part of our quarterly EPIC awards and we celebrate the achievements of our people at an annual staff event
The interests of the Company's employees
Our people are the Company's greatest asset. We strive to be an employer of choice, and to support this over the last 12 months we have:
Launched our ‘EPIC’ value set, which align Company goals across our workforce by integrating into objectives and annual appraisals. Individuals nominate colleagues for recognition as part of our quarterly EPIC awards and we celebrate the achievements of our people at an annual staff event
Supported employees through the cost of living crisis with vouchers, recipe meal kit boxes, and bringing forward our annual pay review
Made record investment into the training of our people to upskill our workforce and provide development and career progression opportunities
Relaunched our employee forum and held quarterly all-employee briefings to enhance lines of communication with our workforce, better understand key issues affecting our people and obtain feedback on proposed strategies to aid our decision-making and ensure that actions taken are done so in consultation with our people
The need to foster the Group's business relationships with suppliers, customers and others
We believe in engaging and transacting with our customers and suppliers in a transparent and ethical manner. This is an ongoing process as part of which we have:
Ensured technically-approved, high quality contingency suppliers are in place for continuity of supply to ensure a robust supply chain and maintain high service levels with our customers
Continued investment in our factory to create additional capacity and capability, alongside significant investment in enhancing our commercial and NPD team to enhance our customers’ experience and support them with product innovation
Adopted a partnership approach to each business relationship, understanding our customer’s needs intimately and aiming to develop a mutually beneficial, long-term relationship
The impact of the Company's operations on the community and the environment
We are mindful of the impact we make on the environment and our local community. In the last 12 months we have:
Engaged with an emission data management company to accurately measure our carbon footprint baseline and set meaningful climate objectives
Launched an electric car salary sacrifice scheme to support our grey fleet’s transition to zero emissions vehicles
Sponsored multiple grass roots sport teams and supported the ‘Boston Beagle’ Greenpower racing team at Boston High School – promoting female participation in STEM subjects
Supported multiple community events/festivals in the local area
Held a gift collection for Boston Women’s Aid, ensuring a brighter Christmas for mothers and children fleeing domestic abuse
The reputation for a high standard of business conduct
JDM uphold the highest technical standards and refuse to compromise on quality. In the past 12 months we have:
Maintained our AA+ BRC certification, demonstrating our commitment to quality
Introduced daily taste panels to ensure consistency and quality of product
Ensured that our EPIC values underpin and promote our strong quality and safety culture, and a commitment to doing things the right way
Completed multiple customer audits and worked with collaboratively with them to maximise quality standards
The need to act fairly as between members of the Company
We have identified the following member groups as relevant stakeholders of the Group: our people, our customers, our suppliers, our investors, and our local community. Positive engagement with all of these parties is key to our successful delivery of our strategy to be a trusted partner of choice, delivering the highest standards of service, innovation, quality and safety in an ethical, sustainable and profitable manner. We have set out above some of the ways in which we have and continue to engage with these stakeholders. We aim to ensure that their respective views are factored into our decision-making processes, seeking to balance interests, promote and maximise value for all parties in both the immediate and longer term.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 10.
No ordinary dividends were paid (2021: £nil). The directors do not recommend payment of a final dividend (2021: £nil).
The directors who held office during the period and up to the date of the signature of the financial statements were as follows:
The Company is committed to engaging with their principal stakeholders and views its suppliers, customers and employees as its principal stakeholders. All concerns or thoughts of our stakeholders are discussed at Board level and by direct engagement with stakeholders themselves. Every decision we make is taken with our stakeholders in mind and what is the best for the relationship in the long term. The customers' opinions and feedback are taken in to consideration when discussing strategy and performance.
Relationships with suppliers are also maintained as a partnership in order to work effectively and efficiently.
On 24 July 2023, the owners of the Sunridge JDM I Limited completed an acquisition and as a result, the Company’s ultimate parent undertaking became Jardins and Broch Inc, a company incorporated in the USA.
The Company's subsidiaries continue to invest in both production capacity and capability, which is creating significant added value opportunities.
The Company has the full support of its investors, as well as bankers HSBC.
Saffery LLP have expressed their willingness to continue in office.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the 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.
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.
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.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the Company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the Company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the Company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the Company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 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.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in 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.
The income statement has been prepared on the basis that all operations are continuing operations.
There was no other comprehensive income for 2022 (2021: £nil).
JDM Food Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Monument Road, Bicker, Boston, PE20 3DJ.
The principal activity of the Company is disclosed in the Directors' report. The Company was incorporated on 5 May 2021 and commenced trading on that date. Accordingly, the prior year financial statements were prepared for the period from incorporation to 31 December 2021.
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 £.
This company is a qualifying entity for the purposes of FRS 102, 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 or loss of the group. The Company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense 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;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the Company are consolidated in the financial statements of Sunridge JDM I Limited. These consolidated financial statements are available from its registered office, Monument Road, Bicker, Boston, PE20 2DJ.
The Company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Basic financial assets, which include debtors, 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.
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.
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, including creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the Company’s contractual obligations expire or are discharged or cancelled.
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.
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.
On review, management have identified no critical accounting judgements or key sources of estimation uncertainty within the financial statements.
All turnover in the current and previous period arose within the United Kingdom.
Cancelled acquisition costs relate to a potential acquisition in the year that was subsequently terminated.
Restructuring costs relate to one-off costs relating to restructuring of the Company's senior management team post-acquisition and operational restructuring to deliver efficiencies in future periods.
Operational efficiency project costs relate to one-off costs relating to improving the Company’s operational efficiency and business planning systems.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 0).
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
On 20 July 2022, the Company subscribed to 80,252,500 Ordinary shares of £0.01 each in its subsidiary, JDM 2010 Limited, at par.
Details of the Company's subsidiaries at 31 December 2022 are as follows:
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Bank loans comprise a term loan with an outstanding balance at the year end amounting to £8,295,000 (2021: £nil).
The term loan attracts interest at a rate of 3.65% over the Bank of England Base Rate and is repayable in quarterly instalments of £250,000 commencing 30 September 2022, rising to £375,000 on 31 March 2024 with a final bullet repayment in July 2025. The loan is secured by way of a debenture including a fixed charge over all present freehold and leasehold property, a first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and a future and First Floating Charge over all assets and undertaking both present and future dated 1 July 2005. Both fixed and a floating charge containing negative pledges are held by HSBC over all of the properties and undertakings of the company and the group of which it forms part.
The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon:
The deferred tax asset set out above is expected to reverse at least in part within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
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.
At the balance sheet date, outstanding contributions amounted to £nil (2021: £2,051) and are included in creditors.
On 7 June 2022, 1,167,651 Ordinary shares each with a nominal value of £0.01 were issued for an aggregate consideration of £1,167,651.
On 7 September 2022, a further 38,332 Ordinary shares each with a nominal value of £0.01 were issued for an aggregate consideration of £38,332.
On 29 September 2022, a further 4,772,000 Ordinary shares each with a nominal value of £0.01 were issued for an aggregate consideration of £4,772,000.
This includes any excess consideration over nominal value on the issue of shares.
This includes all retained profits and losses after the payment of dividends.
Other related parties comprise entities controlled or jointly controlled by individuals with significant control over the Company.
In accordance with the available exemption under FRS 102, the Company has not disclosed transactions with other wholly owned members of the same group of undertakings.
The immediate parent undertaking is Sunridge JDM II Limited. The ultimate parent undertaking is Sunridge JDM I Limited.
The smallest and largest group of undertakings for which group financial statements have been drawn up including the Company is that headed by Sunridge JDM I Limited. Copies of group financial statements can be obtained from Companies House, Cardiff.
In the opinion of the directors, there is no ultimate controlling party.
As disclosed in the Directors’ Report, on 24 July 2023 the owners of the Sunridge JDM I Limited completed an acquisition and as a result the company’s ultimate parent undertaking became Jardins and Broch Inc, a company incorporated in the USA. Costs associated with this transaction borne by the Company were funded via the issue of share capital. The Company’s ultimate beneficial owners did not change as a result of this transaction.