Company registration number 13017549 (England and Wales)
CSM INGREDIENTS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
CSM INGREDIENTS UK LIMITED
COMPANY INFORMATION
Directors
MD Bok
(Appointed 13 November 2020)
D Landweer
(Appointed 13 November 2020)
Secretary
D Landweer
Company number
13017549
Registered office
28 Elsinore Road
Old Trafford
Manchester
M16 0WF
Auditor
Sedulo Audit Limited
62-66 Deansgate
Manchester
United Kingdom
M3 2EN
CSM INGREDIENTS UK LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
10
Statement of comprehensive income
9
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
CSM INGREDIENTS UK LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 1 -

The directors present the strategic report for the period ended 31 December 2021.

Fair review of the business

On April 19, 2021, CSM Ingredients S.à.r.l. (an independently managed subsidiary of Global Food Solutions Investments S.à.r.l.) indirectly acquired the bakery ingredients activities from CSM Bakery Solutions Limited.

 

CSM Ingredients is a producer of the highest quality ingredients with a wide range across bakery fats, pastry, bread and other functional ingredients as well as food solutions for industrial bread manufacturers.

 

The Company is a wholly owned subsidiary of CSM Ingredients UK Limited which has a production facility based in Manchester, serving customers across the UK and Europe. The Company also rents offices and space within a Research and Development centre at the Wirral site.

Main product segments bread ingredients, icings, glazes, toppings and fillings (IGTF, subsequently renamed to fruits, fillings and coatings (FFC)), fats & oils, and pastry mixes.

 

As at 31 December 2021, the company had 107 employees.

 

Results

Sales reached £35 million in 2021. No comparison is available for 2020 since the Company has been formed as a result of the purchase of the bakery ingredients activities from CSM Bakery Solutions Limited which occurred during 2021.

 

In 2021, the Company achieved an operating profit before income tax of £1,676,752.

CSM INGREDIENTS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties

The principal risks and uncertainties identified by the Board of Managers are as follows:

 

Market and exchange rate

The Company applies Group principles for overall risk management, and Group policies covering specific areas such as foreign exchange risk, credit risk and liquidity risk.

 

The Company’s sales and purchases are mostly made in GBP, with a small proportion being made in other currencies. The Company holds loan balances in foreign currencies, therefore is exposed to foreign exchange rate risk. This risk is not considered to be material, as the loan creditors are largely offset by loan debtors.

 

Credit risk

Credit risks primarily arise through sales made to customers. These risks are closely monitored and followed, as the Company has policies in place to ensure that sales are made to customers under appropriate credit limits. The Company conducts a monthly review of the ageing of balances and each customer and its associated credit limit is closely monitored.

 

Financial risk and interest rate risk management

Liquidity risk is the risk that the Company will not be able to obtain sufficient financial means to meet its obligations as they fall due.

 

The Company manages liquidity risk by maintaining adequate cash reserves and by monitoring actual cash flows. Borrowing facilities are available from the Group and have different terms, some are interest-free, others have both fixed and variable interest rates. The interest rate risk exposure consists primarily of borrowings at variable interest rates. The risk is managed by the Company by monitoring potential market developments and considering actions to mitigate potential negative impact.

 

The Company does not have financial assets with variable interest rate.

 

Operational risk

The activities of the Company are labour intensive and heavily dependent on the supply of raw materials.

 

The Company’s profitability is affected by its ability to transfer labour costs and raw material inflation to its customers. The Company currently faces high cost inflation constraining profitability in the coming months, which together with a number of initiatives already on-going aimed to improve efficiencies on the supply chain area as well as on the revenue management and pricing increase strategy should contribute to maintain and improve the EBITDA of the Company in 2022.

 

Legal risks

Any legal risk is properly addressed by the legal department of the Company to ensure compliance with all regulations in force, especially regulations on personal safety, customs, etc.

 

Safety and environmental risks

The Company believes that all injuries and occupational illnesses, as well as safety and

environmental incidents, are preventable, and our goal for all such events is zero. Safety procedures are put in place and respected by all our employees to ensure that the goal is achievable.

 

Conflict in Ukraine

The armed conflict between Russia and Ukraine started on 24th February 2022. After some small initial disruptions, the business has meanwhile continued as normal. The Company will have certain indirect consequences such as the increase in some raw material and commodity prices mainly being sunflower derivatives, wheat and energy. It is expected that these increases would be offset by price increases.

 

Covid 19 impact

The Company's operating environment continues to be affected by near-term uncertainty related to COVID-19 and its potential impact in relation to labour availability and supply chain disruptions.The Company assumes reasonable containment of COVID-19 infection rates, but the Company acknowledges that its operating results could be different from the expectations if its assumptions related to COVID-19 deviate materially.

CSM INGREDIENTS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 3 -
Key performance indicators

The company measures KPI's to track performance of the business, a summary of the KPI's is shown below:

 

 

Unit

2021

 

Turnover

£'000

34,901

 

Gross Profit

£'000

7,107

 

Gross Profit Margin

%

20.36

 

Operating Profit

£'000

1,677

 

Operating Profit Margin

Inventory Days

%

4.80

46

 

On behalf of the board

MD Bok
Director
12 August 2022
CSM INGREDIENTS UK LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 4 -

The directors present their annual report and financial statements for the period ended 31 December 2021.

Principal activities

The principal activity of the company continued to be that of a specialist food ingredients producer and supplier.

Results and dividends

The results for the period are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

MD Bok
(Appointed 13 November 2020)
D Landweer
(Appointed 13 November 2020)
Future developments

The Company plans to expand its operation through organic expansion. It owns a production site in Manchester, plus rents a research and development centre in Wirral which contributes in the further development of new products for the existing and future markets. During 2021 the Company invested into research and development activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
MD Bok
Director
12 August 2022
CSM INGREDIENTS UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 5 -

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:

 

 

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.

CSM INGREDIENTS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CSM INGREDIENTS UK LIMITED
- 6 -
Opinion

We have audited the financial statements of CSM Ingredients UK Limited (the 'company') for the period ended 31 December 2021 which comprise the profit and loss account, 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 significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

CSM INGREDIENTS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CSM INGREDIENTS UK 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 identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that there are no particular principal risks of non-compliance with laws and regulations. We also considered those laws and regulation that have direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase profits, through management bias in manipulation of accounting for significant creditors and expenses.

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.

Audit procedures performed included:

 

CSM INGREDIENTS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CSM INGREDIENTS UK LIMITED
- 8 -

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.

Hilene Henry
Senior Statutory Auditor
For and on behalf of Sedulo Audit Limited
12 August 2022
Chartered Accountants
Statutory Auditor
62-66 Deansgate
Manchester
United Kingdom
M3 2EN
CSM INGREDIENTS UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 9 -
Period
ended
31 December
2021
£
Profit for the period
1,516,993
Other comprehensive income
-
Total comprehensive income for the period
1,516,993
CSM INGREDIENTS UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 10 -
Period
ended
31 December
2021
Notes
£
Turnover
3
34,900,645
Cost of sales
(27,794,054)
Gross profit
7,106,591
Selling expenses
(2,535,736)
Administrative expenses
(2,894,103)
Operating profit
4
1,676,752
Interest payable and similar expenses
6
(2,678)
Profit before taxation
1,674,074
Tax on profit
7
(157,081)
Profit for the financial period
1,516,993

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CSM INGREDIENTS UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 11 -
2021
Notes
£
£
Fixed assets
Tangible assets
8
1,868,382
Investments
9
85
1,868,467
Current assets
Stocks
11
4,707,127
Debtors
12
9,203,395
Cash at bank and in hand
1,824,485
15,735,007
Creditors: amounts falling due within one year
13
(16,086,381)
Net current liabilities
(351,374)
Net assets
1,517,093
Capital and reserves
Called up share capital
16
100
Profit and loss reserves
1,516,993
Total equity
1,517,093
The financial statements were approved by the board of directors and authorised for issue on 12 August 2022 and are signed on its behalf by:
MD Bok
Director
Company Registration No. 13017549
CSM INGREDIENTS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 13 November 2020
-
0
-
0
-
0
Period ended 31 December 2021:
Profit and total comprehensive income for the period
-
1,516,993
1,516,993
Issue of share capital
16
100
-
100
Balance at 31 December 2021
100
1,516,993
1,517,093
CSM INGREDIENTS UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 13 -
2021
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
20
2,253,996
Interest paid
(2,678)
Net cash inflow/(outflow) from operating activities
2,251,318
Investing activities
Purchase of tangible fixed assets
(2,040,502)
Purchase of subsidiaries
(85)
Repayment of loans
1,613,654
Net cash used in investing activities
(426,933)
Financing activities
Proceeds from issue of shares
100
Net cash generated from/(used in) financing activities
100
Net increase in cash and cash equivalents
1,824,485
Cash and cash equivalents at beginning of period
-
0
Cash and cash equivalents at end of period
1,824,485
CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 14 -
1
Accounting policies
Company information

CSM Ingredients UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 28 Elsinore Road, Old Trafford, Manchester, M16 0WF.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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:

 

 

The financial statements of the company are consolidated in the financial statements of CSM Ingredients S.a.r.l. These consolidated financial statements are available from its registered office, 7 Rue Des Merovingiens L-8070, 7 Rue Des Merovingiens L-8070, Luxembourg, Luxembourg, Luxembourg, L-8070.

1.2
Going concern

The Company’s financial statements as of 31st December 2021 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.true

 

The Company has received a letter of continued support from it’s parent company who provides financing arrangements.

 

The potential impact of the COVID-19 and of the war in Ukraine has been considered by the Company and it is not expected to materially impact the going concern basis assumption.

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.3
Turnover

A receivable is recognised when the control of goods is transferred to the buyer as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. The control over the goods is transferred when dispatch or delivery of the goods is completed based on shipping terms specified in purchase orders from the buyers. In general, the control is transferred to the buyer at the shipping point or the delivery destination.

 

Revenue is measured at the value of the consideration received or to be received. Revenue is reduced for estimated customer returns, rebates, trade discounts, pricing, and other allowances.

The Company derives substantially all its revenue from the sale of products. The Company recognizes product sales revenues when control of a product is transferred to the customer. For the majority of product sales, transfer of control occurs when dispatch or delivery of the goods are completed based on shipping terms specified in the contracts with the customer. The cost of delivering finished goods to the Company’s customers is recorded as a component of cost of products sold, which includes cost of raw materials and consumables, production costs, and warehousing and distribution costs. Those costs include the amounts paid to a third party to deliver the finished goods. Any freight costs billed to and paid by a customer are included in net sales.

 

Turnover is recognized when performance obligations under the terms of a contract with a customer are satisfied, which generally occurs when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Generally, the Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the creditworthiness of each customer. If collectability is not considered to be probable, the Company defers recognition of revenue on satisfied performance obligations until the uncertainty is resolved. Any variable consideration, such as discounts or price concessions, is set forth in the terms of the contract at inception and is included in the assessment of the transaction price at the outset of the arrangement.

The Company does not typically include extended payment terms or significant financing components in our contracts with customers. Certain product sales contracts may include cash-based incentives (volume rebates or credits), which are accounted for as variable consideration. We estimate these amounts based on the expected forecast quantities to be provided to customers and reduce revenues recognized accordingly.

 

Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred. The Company generally expenses sales commissions when incurred because the amortization period is one year or less. These costs are recorded within sales and marketing expenses. The Company treats shipping and handling activities that occur after control of the good transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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.

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -

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:

Freehold land and buildings
40 years
Plant and equipment
10 years
Fixtures and fittings
10 years
Computers
4 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
Stocks

Inventories of raw materials, consumables, technical materials, and packaging are stated at the lower of average cost and net realizable value. Inventories of work in progress and finished products are stated at the lower of production cost and net realizable value. Total cost of production includes payroll costs and materials and an allocated part of the indirect production costs. A valuation adjustment is deducted for nonmarketable inventories.

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

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

1.9
Financial instruments
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.

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
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.

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 subsequently 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 through 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
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.

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 18 -
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.

1.11
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.12
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
Judgements and key sources of estimation uncertainty

The preparation of the consolidated financial statements in accordance with the Financial Reporting Standards 102 (FRS 102), requires management to make judgments, estimates, and assumptions that affect the application of accounting policies; the reported amounts of assets, liabilities, income, and expenses; and assumptions that affect amounts reported in the consolidated financial statements.

 

These estimates and judgments are evaluated on an ongoing basis and are based on experience, current and expected future conditions, third-party evaluations, and other various assumptions that are considered reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities, as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates.

 

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are recorded when known.

 

There are no significant management judgment areas within the Company financial statements.

 

 

 

 

 

 

 

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 19 -
3
Turnover
2021
£
Turnover analysed by geographical market
United Kingdom
31,594,942
Europe
3,273,036
Rest of world
32,667
34,900,645
4
Operating profit
2021
Operating profit for the period is stated after charging/(crediting):
£
Exchange gains
(61,499)
Research and development costs
365,441
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
Depreciation of owned tangible fixed assets
165,953
Loss on disposal of tangible fixed assets
6,167
Operating lease charges
75,097
5
Employees

The average monthly number of persons (including directors) employed by the company during the period was:

2021
Number
Production
57
Distribution
7
Sales
26
Research and development
9
Administration
8
Total
107

Their aggregate remuneration comprised:

2021
£
Wages and salaries
3,008,783
Social security costs
286,463
Pension costs
284,088
3,579,334
CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 20 -
6
Interest payable and similar expenses
2021
£
Interest on bank overdrafts and loans
2,678
7
Taxation
2021
£
Current tax
UK corporation tax on profits for the current period
191,299
Deferred tax
Origination and reversal of timing differences
(34,218)
Total tax charge
157,081

The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:

2021
£
Profit before taxation
1,674,074
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00%
318,074
Tax effect of expenses that are not deductible in determining taxable profit
18,972
Fixed asset differences
13,017
Other tax adjustments, reliefs and transfers
(184,769)
Remeasurement of deferred tax for changes in tax rates
(8,213)
Taxation charge for the period
157,081
CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 21 -
8
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 13 November 2020
-
0
-
0
-
0
-
0
-
0
Additions
1,255,793
446,504
290,003
48,202
2,040,502
Disposals
-
0
(7,500)
-
0
-
0
(7,500)
At 31 December 2021
1,255,793
439,004
290,003
48,202
2,033,002
Depreciation and impairment
At 13 November 2020
-
0
-
0
-
0
-
0
-
0
Depreciation charged in the period
55,191
64,472
30,054
16,236
165,953
Eliminated in respect of disposals
-
0
(1,333)
-
0
-
0
(1,333)
At 31 December 2021
55,191
63,139
30,054
16,236
164,620
Carrying amount
At 31 December 2021
1,200,602
375,865
259,949
31,966
1,868,382
9
Fixed asset investments
2021
Notes
£
Investments in subsidiaries
10
85
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 13 November 2020
-
Additions
85
At 31 December 2021
85
Carrying amount
At 31 December 2021
85
10
Subsidiaries

Details of the company's subsidiaries at 31 December 2021 are as follows:

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
10
Subsidiaries
(Continued)
- 22 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
CSM Ingredients Ireland Limited
Ordinary
100.00
11
Stocks
2021
£
Raw materials and consumables
1,632,480
Finished goods and goods for resale
3,074,647
4,707,127
12
Debtors
2021
Amounts falling due within one year:
£
Trade debtors
5,272,085
Amounts owed by group undertakings
2,656,225
Other debtors
977,617
Prepayments and accrued income
263,250
9,169,177
Deferred tax asset (note 14)
34,218
9,203,395
13
Creditors: amounts falling due within one year
2021
£
Trade creditors
3,880,451
Amounts owed to group undertakings
8,649,271
Corporation tax
191,299
Other taxation and social security
118,086
Other creditors
15,841
Accruals and deferred income
3,231,433
16,086,381
CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 23 -
14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Assets
Assets
2021
Balances:
£
£
Accelerated capital allowances
16,718
-
Retirement benefit obligations
17,500
-
34,218
-
2021
Movements in the period:
£
Liability at 13 November 2020
-
Credit to profit or loss
(34,218)
Asset at 31 December 2021
(34,218)
15
Retirement benefit schemes
2021
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
284,088

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.

16
Share capital
2021
2021
Ordinary share capital
Number
£
Issued and fully paid
Ordinary of £1 each
100
100

The company has one class of ordinary shares which carry full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption.

17
Business combination

On April 19, 2021, the Company acquired the Bakery Ingredients activities from CSM Bakery Solutions Limited, while for accounting purposes the effective date of transfer is 18 April 2021.

 

The consideration was equal to the fair value of the acquired net identifiable assets.

CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 24 -
18
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2021
£
Within one year
106,770
Between two and five years
160,968
267,738
19
Ultimate controlling party

Upon incorporation, the original parent company was CSM Bakery Solutions Europe Holding B.V., registered at De entree 232 4e Etage, Amsterdam, Noord-Holland, Netherlands, 1101 EE (company number 56145624).

 

On 19 April 2021, CSM Bakery Solutions Europe Holding B.V. sold the business operations to CSM Ingredients S.à r.l.

 

CSM Ingredients S.à r.l (the “Parent Company” or “Group” together with its direct and indirect subsidiaries) was incorporated on April 2, 2020 and organized under the laws of Luxembourg as a limited liability company (Société a Responsabilité Limitée).

 

The registered office of the Parent Company is located at 7 rue des Mérovingiens, L-8070 Bertrange, Luxembourg. The Company is registered with the “Registre de Commerce et des Sociétés” in Luxembourg under the number B243247.

 

The Parent Company’s direct shareholder is Global Food Solutions Investments S.à r.l., a company incorporated in Luxembourg, and the ultimate majority shareholder is Investindustrial VII L.P. a limited partnership incorporated in the United Kingdom (Company number LP019889).

20
Cash generated from/(absorbed by) operations
2021
£
Profit for the period after tax
1,516,993
Adjustments for:
Taxation charged
157,081
Finance costs
2,678
Loss on disposal of tangible fixed assets
6,167
Depreciation and impairment of tangible fixed assets
165,953
Movements in working capital:
Increase in stocks
(4,707,127)
Increase in debtors
(9,169,177)
Increase in creditors
14,281,428
Cash generated from/(absorbed by) operations
2,253,996
CSM INGREDIENTS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 25 -
21
Analysis of changes in net funds
13 November 2020
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
-
1,824,485
1,824,485
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