Company Registration No. 03600590 (England and Wales)
COMPOUND FEED ENGINEERING LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
PAGES FOR FILING WITH REGISTRAR
COMPOUND FEED ENGINEERING LIMITED
CONTENTS
Page
Statement of financial position
1 - 2
Notes to the financial statements
3 - 10
COMPOUND FEED ENGINEERING LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
31 December 2019
- 1 -
2019
2018
as restated
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
4
1,013,133
1,184,443
Current assets
Inventories
1,619,996
1,768,807
Trade and other receivables
5
2,212,432
2,260,823
Cash and cash equivalents
97,854
47,351
3,930,282
4,076,981
Current liabilities
6
(4,131,590)
(4,219,006)
Net current liabilities
(201,308)
(142,025)
Total assets less current liabilities
811,825
1,042,418
Non-current liabilities
7
(604,456)
(877,939)
Provisions for liabilities
(71,857)
(96,386)
Net assets
135,512
68,093
Equity
Called up share capital
8
1,000
1,000
Retained earnings
134,512
67,093
Total equity
135,512
68,093
The directors of the company have elected not to include a copy of the income statement within the financial statements.
true
For the financial year ended 31 December 2019 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
COMPOUND FEED ENGINEERING LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2019
31 December 2019
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 21 December 2020 and are signed on its behalf by:
C J Lynch
P J Dennehy
Director
Director
Company Registration No. 03600590
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
1
Accounting policies
Company information
Compound Feed Engineering Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Haydock Lane, Haydock Lane Industrial Estate, St Helens, Merseyside, WA11 9UY.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually 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.
1.3
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
2% Straight line
Plant and machinery
12.5% Reducing balance/over the useful economic life
Fixtures, fittings & equipment
20% Reducing balance
Motor vehicles
20% Reducing balance
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
.
1.4
Impairment of non-current 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.
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 4 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.5
Inventories
Inventories 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 inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories 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.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 5 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.8
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
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 income statement 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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 6 -
1.10
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 non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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 statement of financial position 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.
1.13
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.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 14 (2018 - 13).
2019
2018
Number
Number
Total
14
13
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
3
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2019 and 31 December 2019
90,195
Amortisation and impairment
At 1 January 2019 and 31 December 2019
90,195
Carrying amount
At 31 December 2019
-
At 31 December 2018
-
4
Property, plant and equipment
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2019 and 31 December 2019
443,305
1,500,332
36,821
39,255
2,019,713
Depreciation and impairment
At 1 January 2019
106,177
684,168
30,362
14,563
835,270
Depreciation charged in the year
8,867
153,540
1,052
7,851
171,310
At 31 December 2019
115,044
837,708
31,414
22,414
1,006,580
Carrying amount
At 31 December 2019
328,261
662,624
5,407
16,841
1,013,133
At 31 December 2018
337,128
816,164
6,459
24,692
1,184,443
5
Trade and other receivables
2019
2018
as restated
Amounts falling due within one year:
£
£
Trade receivables
1,784,333
1,865,888
Corporation tax recoverable
-
4,995
Amounts owed by group undertakings
405,109
366,951
Other receivables
22,990
22,989
2,212,432
2,260,823
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
6
Current liabilities
2019
2018
as restated
£
£
Bank loans and overdrafts
734,201
926,068
Trade payables
1,438,172
1,939,623
Taxation and social security
123,786
142,812
Other payables
1,835,431
1,210,503
4,131,590
4,219,006
The bank loans and overdrafts are secured over the assets of the company. Net obligations under hire purchase agreements included within other payables are secured over the assets concerned.
Other payables also include amounts owed to Merseyside Loan and Equity Fund LLP and are secured by way of a fixed and floating charge over the company's assets.
7
Non-current liabilities
2019
2018
£
£
Bank loans and overdrafts
234,382
247,536
Other payables
370,074
630,403
604,456
877,939
Barclays Bank PLC holds a charge over the company's property at Haydock Lane, Haydock Industrial Estate, St Helens, Merseyside and all assets of the company.
Bank of Ireland Business Finance holds a fixed charge over certain fixed assets of the company.
Merseyside Loan and Equity Fund LLP have a fixed and floating charge over the property of the company.
Assets held under hire purchase agreements within other payables are secured over the assets concerned.
8
Called up share capital
2019
2018
2019
2018
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 9 -
9
Related party transactions
Included within debtors at the balance sheet date is an amount of £405,109 (2018: £366,951) due from Compound Feed Engineering Limited (Ireland), its parent undertaking.
During the year Compound Feed Engineering Limited (Ireland) charged Compound Feed Engineering Limited management charges totalling £1,181,542 (2018: £1,415,404) for administration services carried out by the company.
10
Control
The company is wholly owned by Compound Feed Engineering Limited (Ireland), a company registered in the Republic of Ireland which is owned and controlled by C J Lynch and P J Dennehy.
11
Prior period adjustment
Changes to the statement of financial position
As previously reported
Adjustment
As restated at 31 Dec 2018
£
£
£
Current assets
Debtors due within one year
2,201,500
59,323
2,260,823
Creditors due within one year
Creditors due within one year
(3,715,569)
(503,437)
(4,219,006)
Net assets
(875,263)
(444,114)
(1,319,377)
Capital and reserves
Profit and loss
511,207
(444,114)
67,093
COMPOUND FEED ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
11
Prior period adjustment
(Continued)
- 10 -
Changes to the income statement
As previously reported
Adjustment
As restated
Year ended 31 December 2018
£
£
£
Cost of sales
(5,856,364)
(344,834)
(6,201,198)
Profit/(loss) for the financial period
45,128
(344,834)
(299,706)
The prior year adjustment to retained earnings is analysed as follows:
Amounts relating to the year ended 31 December 2018 - (£344,834)
Amounts relating to the year ended 31 December 2017 - (£99,280)
The overall impact on retained earnings is (£444,114).
Basis for prior year adjustment
When preparing the 2019 financial statements additional accruals were identified relating to the 2018 and 2017 financial statements. There were also corrections required to debtors and trade creditors in 2018.
As a result of these errors the profits of previous periods has been overstated. The financial effect of the errors that have been identified is provided above.
The company has since strengthened its financial control systems and are confident that the systems now in place are robust.
2019-12-31
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21 December 2020
CCH Software
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C J Lynch
C J Lynch
P J Dennehy
C J Lynch
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