Company Registration No. NI602522 (Northern Ireland)
CHESTNUTT ANIMAL FEEDS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2019
CHESTNUTT ANIMAL FEEDS LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
CHESTNUTT ANIMAL FEEDS LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr J Chestnutt
Mrs D Chestnutt
Mr D Dunlop
Mr D McKay
Mr N McConaghie
Secretary
Mr J Chestnutt
Company number
NI602522
Registered office
The Mill
55 Main Street
Stranocum
Ballymoney
BT53 8PQ
Auditor
Moore (N.I.) LLP
32 Lodge Road
Coleraine
BT52 1NB
Bankers
Danske Bank
6 High Street
Ballymoney
Co. Antrim
BT53 6AD
Danske Bank ICS
3rd Floor
3 Harbourmaster Place
IFSC
Dublin 1
HSBC Bank PLC
20-22 Railway Road
Coleraine
Londonderry
BT52 1PD
Solicitors
Anderson Gillan Barr Limited
5 Linenhall Street
Ballymoney
County Antrim
BT53 6DP
CHESTNUTT ANIMAL FEEDS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2019
- 2 -
The directors present the strategic report for the year ended 31 August 2019.
Principal activities
The principal activity of the company continued to be that of the
manufacturing of prepared food for farm animals. There were no significant changes in the business activities during the year.
Review of business and future developments
T
he directors consider the results for the period to be satisfactory. The company will continue to seek every
opportunity to increase profitable turnover.
Risks and uncertainties
The company's operations expose it to a variety of financial risks that include price risk, foreign exchange risk,
credit risk, liquidity risk and interest rate risk. The company has in place a risk
management programme that
seeks to limit the adverse effects on the financial performance of
the company by monitoring levels of debt
finance and the related finance costs.
Given the size of the company, the directors have assumed responsibility for the monitoring of
financial risk
management.
Price risk
The company is exposed to commodity price risk
as a result of its operations
. However, given the size of the company's
operations, the
costs of managing exposure to commodity price risk exceed any potential benefits. The directors will
revisit the appropriateness of
this
policy
should the
company's operations
change
in size or nature. The
company has no exposure to equity securities price risk as it holds no listed investments.
Foreign exchange risk
A proportion of the company's trading is conducted in
foreign currency
. However, any exposure to foreign
exchange risk
in the normal course of business is deemed to be immaterial.
Credit risk
The company is exposed to credit risk due to its policy of giving credit to customers. In these instances the
company has implemented policies that require appropriate credit checks on potential customers before sales
are made. The amount of exposure to individual customers is subject to a limit, which is reassessed regularly
by the directors.
Liquidity risk
The company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the company has sufficient available funds for operations and planned expansions.
Interest rate cash flow risk
The company has interest bearing liabilities. The company has a policy of monitoring its debt finance to ensure certainty of future interest cash flows. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature or otherwise be deemed necessary.
CHESTNUTT ANIMAL FEEDS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 3 -
Key performance indicators
Given the straightforward nature of the business, the company's directors are of the opinion that analysis using KPI's is not necessary for an understanding of the development, performance or position of the business.
Mr J Chestnutt
Director
6 December 2019
CHESTNUTT ANIMAL FEEDS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2019
- 4 -
The directors present their annual report and financial statements for the year ended 31 August 2019.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J Chestnutt
Mrs D Chestnutt
Mr D Dunlop
Mr D McKay
Mr N McConaghie
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £110,000. The directors do not recommend payment of a final dividend.
Auditor
The auditor, Moore (N.I.) LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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.
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.
CHESTNUTT ANIMAL FEEDS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 5 -
On behalf of the board
Mr J Chestnutt
Director
6 December 2019
CHESTNUTT ANIMAL FEEDS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CHESTNUTT ANIMAL FEEDS LIMITED
- 6 -
Opinion
We have audited the financial statements of Chestnutt Animal Feeds Limited (the 'company') for the year ended 31 August 2019 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 August 2019 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CHESTNUTT ANIMAL FEEDS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHESTNUTT ANIMAL FEEDS LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
The purpose of our audit work and to whom we owe our responsibilities
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.
Dr R I Peters Gallagher OBE FCA (Senior Statutory Auditor)
for and on behalf of Moore (N.I.) LLP
6 December 2019
Chartered Accountants
Statutory Auditor
32 Lodge Road
Coleraine
BT52 1NB
CHESTNUTT ANIMAL FEEDS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
22,323,426
21,320,893
Cost of sales
(18,399,010)
(17,701,162)
Gross profit
3,924,416
3,619,731
Administrative expenses
(2,785,572)
(2,576,597)
Operating profit
4
1,138,844
1,043,134
Interest receivable and similar income
7
6,252
9,884
Interest payable and similar expenses
8
(32,346)
(37,156)
Profit before taxation
1,112,750
1,015,862
Tax on profit
9
(209,473)
(245,945)
Profit for the financial year
903,277
769,917
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CHESTNUTT ANIMAL FEEDS LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2019
31 August 2019
- 9 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,203,708
1,078,202
1,203,708
1,078,202
Current assets
Stocks
14
198,907
392,369
Debtors
15
2,972,602
2,991,443
Cash at bank and in hand
1,573,246
1,102,547
4,744,755
4,486,359
Creditors: amounts falling due within one year
16
(1,285,149)
(1,644,427)
Net current assets
3,459,606
2,841,932
Total assets less current liabilities
4,663,314
3,920,134
Creditors: amounts falling due after more than one year
17
(449,833)
(508,301)
Provisions for liabilities
20
(123,444)
(115,073)
Net assets
4,090,037
3,296,760
Capital and reserves
Called up share capital
23
2
2
Profit and loss reserves
4,090,035
3,296,758
Total equity
4,090,037
3,296,760
The financial statements were approved by the board of directors and authorised for issue on 6 December 2019 and are signed on its behalf by:
Mr J Chestnutt
Director
Company Registration No. NI602522
The notes on pages 12 - 25 form part of these financial statements and should be read in conjunction therewith.
CHESTNUTT ANIMAL FEEDS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2019
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2017
2
2,636,841
2,636,843
Year ended 31 August 2018:
Profit and total comprehensive income for the year
-
769,917
769,917
Dividends
10
-
(110,000)
(110,000)
Balance at 31 August 2018
2
3,296,758
3,296,760
Year ended 31 August 2019:
Profit and total comprehensive income for the year
-
903,277
903,277
Dividends
10
-
(110,000)
(110,000)
Balance at 31 August 2019
2
4,090,035
4,090,037
CHESTNUTT ANIMAL FEEDS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2019
- 11 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,655,802
715,527
Interest paid
(32,346)
(37,156)
Income taxes paid
(259,274)
(186,547)
Net cash inflow from operating activities
1,364,182
491,824
Investing activities
Purchase of tangible fixed assets
(256,114)
(231,272)
Proceeds on disposal of tangible fixed assets
5,000
85,011
Other investments and loans made
(249,951)
-
Proceeds from other investments and loans
-
541,048
Interest received
6,252
9,884
Net cash (used in)/generated from investing activities
(494,813)
404,671
Financing activities
Repayment of bank loans
(74,678)
(83,822)
Payment of finance leases obligations
(213,992)
(160,047)
Dividends paid
(110,000)
(110,000)
Net cash used in financing activities
(398,670)
(353,869)
Net increase in cash and cash equivalents
470,699
542,626
Cash and cash equivalents at beginning of year
1,102,547
559,921
Cash and cash equivalents at end of year
1,573,246
1,102,547
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2019
- 12 -
1
Accounting policies
Company information
Chestnutt Animal Feeds Limited is a
private
company
limited by shares
incorporated in Northern Ireland.
The registered office is
The Mill, 55 Main Street, Stranocum, Ballymoney, BT53 8PQ.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates
.
Revenue from the sale of goods is recognised when the 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.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and building improvements
10% Straight Line
Plant and machinery
20% Reducing Balance
Office equipment
20% Reducing Balance
Motor vehicles
25% 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
.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
1
Accounting policies
(Continued)
- 13 -
1.6
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.
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.
1.7
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.
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.
1.8
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.
1.9
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.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
1
Accounting policies
(Continued)
- 14 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
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.
1.11
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.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
1
Accounting policies
(Continued)
- 16 -
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 profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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.
1.15
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 are included in the profit and loss account for the period.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 17 -
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.
3
Turnover and other revenue
2019
2018
£
£
Turnover analysed by class of business
Sale of goods
22,323,426
21,320,893
2019
2018
£
£
Other significant revenue
Interest income
6,252
9,884
The directors have not disclosed market information as they believe it would be seriously prejudicial to the interests of the company to disclose such information.
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
2,432
4,332
Fees payable to the company's auditor for the audit of the company's financial statements
10,000
8,000
Depreciation of owned tangible fixed assets
168,334
127,305
Depreciation of tangible fixed assets held under finance leases
176,343
205,359
Profit on disposal of tangible fixed assets
(2,799)
(35,374)
Amortisation of intangible assets
-
43,333
Cost of stocks recognised as an expense
18,399,010
17,701,162
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £2,432 (2018 - £4,332).
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
25
24
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
669,421
575,366
Social security costs
63,742
53,376
Pension costs
86,753
81,319
819,916
710,061
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
162,657
38,054
Company pension contributions to defined contribution schemes
78,234
75,070
240,891
113,124
7
Interest receivable and similar income
2019
2018
£
£
Interest income
Other interest income
6,252
9,884
8
Interest payable and similar expenses
2019
2018
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
18,217
25,022
Other finance costs:
Interest on finance leases and hire purchase contracts
14,129
12,134
32,346
37,156
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 19 -
9
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
201,102
259,274
Adjustments in respect of prior periods
-
(13,305)
Total current tax
201,102
245,969
Deferred tax
Origination and reversal of timing differences
8,371
(24)
Total tax charge
209,473
245,945
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:
2019
2018
£
£
Profit before taxation
1,112,750
1,015,862
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
211,423
193,014
Tax effect of expenses that are not deductible in determining taxable profit
19
70
Adjustments in respect of prior years
(5,768)
(13,305)
Depreciation on assets not qualifying for tax allowances
3,799
933
Amortisation on assets not qualifying for tax allowances
-
8,233
Other tax adjustments
-
57,000
Taxation charge for the year
209,473
245,945
10
Dividends
2019
2018
£
£
Interim paid
110,000
110,000
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 20 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 September 2018 and 31 August 2019
800,000
Amortisation and impairment
At 1 September 2018 and 31 August 2019
800,000
Carrying amount
At 31 August 2019
-
At 31 August 2018
-
12
Tangible fixed assets
Land and building improvements
Plant and machinery
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 September 2018
49,127
670,583
19,298
1,670,754
2,409,762
Additions
150,846
65,145
16,093
240,300
472,384
Disposals
-
-
-
(21,985)
(21,985)
At 31 August 2019
199,973
735,728
35,391
1,889,069
2,860,161
Depreciation and impairment
At 1 September 2018
16,061
430,847
11,513
873,139
1,331,560
Depreciation charged in the year
19,997
60,976
4,776
258,928
344,677
Eliminated in respect of disposals
-
-
-
(19,784)
(19,784)
At 31 August 2019
36,058
491,823
16,289
1,112,283
1,656,453
Carrying amount
At 31 August 2019
163,915
243,905
19,102
776,786
1,203,708
At 31 August 2018
33,066
239,736
7,785
797,615
1,078,202
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2019
2018
£
£
Motor vehicles
529,027
616,073
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 21 -
13
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,937,547
2,927,689
Carrying amount of financial liabilities
Measured at amortised cost
1,515,493
1,877,871
14
Stocks
2019
2018
£
£
Finished goods and goods for resale
198,907
392,369
15
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
1,876,634
2,123,185
Seacon Beg Farm Limited
682,750
676,292
Other debtors
399,938
167,656
Prepayments and accrued income
13,280
24,310
2,972,602
2,991,443
16
Creditors: amounts falling due within one year
2019
2018
£
£
Bank loans and overdrafts
18
58,647
79,664
Obligations under finance leases
19
171,545
164,460
Trade creditors
803,702
1,063,727
Corporation tax
201,102
259,274
Other taxation and social security
18,387
15,583
Accruals and deferred income
31,766
61,719
1,285,149
1,644,427
Bank loans and overdrafts are secured as follows:-
- Second legal mortgage over the freehold land/property of James Alexander Chestnutt known as 55 Main Street, Stranocum, Ballymoney, County Antrim.
- Debenture comprising fixed and floating charges over all the assets and undertaking of Chestnutt Animal Feeds Limited including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 22 -
17
Creditors: amounts falling due after more than one year
2019
2018
£
£
Bank loans and overdrafts
18
75,310
128,971
Obligations under finance leases
19
374,523
379,330
449,833
508,301
18
Loans and overdrafts
2019
2018
£
£
Bank loans
133,957
208,635
Payable within one year
58,647
79,664
Payable after one year
75,310
128,971
Bank loans and overdrafts are secured as follows:-
- Second legal mortgage over the freehold land/property of James Alexander Chestnutt known as 55 Main Street, Stranocum, Ballymoney, County Antrim.
- Debenture comprising fixed and floating charges over all the assets and undertaking of Chestnutt Animal Feeds Limited including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future.
19
Finance lease obligations
2019
2018
Future minimum lease payments due under finance leases:
£
£
Within one year
183,937
176,573
In two to five years
402,764
408,311
586,701
584,884
Less: future finance charges
(40,633)
(41,094)
546,068
543,790
Finance lease payments represent rentals payable by the company for certain items of plant and machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 23 -
20
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
21
123,444
115,073
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2019
2018
Balances:
£
£
Accelerated capital allowances
123,444
115,073
2019
Movements in the year:
£
Liability at 1 September 2018
115,073
Charge to profit or loss
8,371
Liability at 31 August 2019
123,444
The net deferred tax liability expected to reverse in 12 months is £33,551. This primarily relates to the reversal of tax timing differences on capital allowances.
22
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
86,753
81,319
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
2019
2018
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary Shares of £1 each
2
2
The company has one class of ordinary shares which carry full voting rights, entitles the holders to full rights to participate in dividends as voted and entitles holders to full rights to participate in a distribution.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 24 -
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2019
2018
£
£
Aggregate compensation
240,891
113,124
Transactions with related parties
During the year the company paid rent to directors and shareholders of the company totalling £70,000 (2018 £70,000). There were no amounts
outstanding at the year end (201
8
£NIL).
During the year wages totalling £
17,405
(201
8
£
18,116
) were paid to
the mother of
a director
. There were no amounts outstanding at the year end (201
8
£NIL).
During the year the company made pension contribution
s totalling £78,234 (2018 £75,070)
in respect of
the directors and shareholders of the company.
25
Directors' transactions
Dividends totalling £110,000 (2018 - £110,000) 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
£
£
£
£
£
Directors current account
2.50
128,212
457,099
6,252
(213,400)
378,163
128,212
457,099
6,252
(213,400)
378,163
26
Ultimate controlling party
Mr James Chestnutt and Mrs Doreen Chestnutt are the ultimate controlling parties.
CHESTNUTT ANIMAL FEEDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2019
- 25 -
27
Cash generated from operations
2019
2018
£
£
Profit for the year after tax
903,277
769,917
Adjustments for:
Taxation charged
209,473
245,945
Finance costs
32,346
37,156
Investment income
(6,252)
(9,884)
Gain on disposal of tangible fixed assets
(2,799)
(35,374)
Amortisation and impairment of intangible assets
-
43,333
Depreciation and impairment of tangible fixed assets
344,677
332,664
Movements in working capital:
Decrease in stocks
193,462
8,928
Decrease/(increase) in debtors
268,792
(1,087,621)
(Decrease)/increase in creditors
(287,174)
410,463
Cash generated from operations
1,655,802
715,527
2019-08-31
2018-09-01
false
CCH Software
CCH Accounts Production 2020.100
No description of principal activity
Mrs D Chestnutt
Mr D Dunlop
Mr D McKay
Mr N McConaghie
Mr N McConaghie
Mr J Chestnutt
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