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Registered number: 02716126









TAFS FOODS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
TAFS FOODS LIMITED
 
 
COMPANY INFORMATION


Directors
M Tahir 
M F Tahir 
M A Chaudhry 
M S Chaudhry 




Registered number
02716126



Registered office
236 High Street

London

E15 2JA




Independent auditors
Haslers
Chartered Accountants & Statutory Auditor

Old Station Road

Loughton

Essex

IG10 4PL





 
TAFS FOODS LIMITED
 

CONTENTS



Page
Strategic Report
 
1
Directors' Report
 
2 - 3
Directors' Responsibilities Statement
 
4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10 - 12
Statement of Changes in Equity
 
12
Statement of Cash Flows
 
13 - 14
Analysis of Net Debt
 
15
Notes to the Financial Statements
 
16 - 33

 
TAFS FOODS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The principal activity of the company during the year continued to be that of sale of fast food for consumption within the restaurant or takeaway under the KFC brand.

Business review
 
The directors are pleased with the performance of the Company during the year.
The financial position of the Company is presented in the Balance Sheet. The total shareholders’ funds at 31 December 2022 show a strong position of £1,589,192 (2021: £1,484,067).

Principal risks and uncertainties
 
The key business risks and uncertainties affecting the company include;
• The cost of living crisis and inflationary pressures.
• Supply chain risks
The Directors are confident that these risks and uncertainties are and will continue to be appropriately managed and mitigated by the company’s strategies, procedures, and commercial diligence, with constant monitoring and stringent risk management.
In regard to supply chain risk, the Directors have put in place measures to ensure this risk is mitigated to ensure business can continue to operate efficiently.

Financial key performance indicators
 
The directors consider the key financial performance indicators to be sales, profit before tax and EBITDA. 
Sales for the year under review was £13,419,347 (2021: £13,884,760), profit before tax was £125,843 (2021: £779,793) and EBITDA was £511,131 (2021: £1,116,155).


This report was approved by the board on 4 October 2023 and signed on its behalf.



M F Tahir
Director
Page 1

 
TAFS FOODS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the year ended 31 December 2022.
Results and dividends

The profit for the year, after taxation, amounted to £105,125 (2021 - £566,816).


Directors

The directors who served during the year were:

M Tahir 
M F Tahir 
M A Chaudhry 
M S Chaudhry 

Future developments

The directors continue to actively search for new franchise locations to facilitate expansion and open new stores.
This is whilst investing in existing stores to maintain turnover levels.
The Board of Directors acknowledges that the long-term success of the company is dependent on the way it works with several important stakeholders. Key stakeholders are considered in the Board’s decision making,
which ensures that the directors' duty is discharged under section 172 of the Companies Act 2006.

Engagement with employees

The Company recognises the importance of retention and development of talented employees to the ongoing
success of the company. We regularly update employees on internal procedures, new regulations, products and
health and safety matters.

Page 2

 
TAFS FOODS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Engagement with suppliers, customers and others

Suppliers
The company understands the importance of a strong supply chain and we work closely with regular suppliers in
order to maintain strong relationships. We are aware of our responsibility to uphold the reputation of the brand
and consider this in all dealings with our suppliers.
Customers
We always aim to provide a fast and efficient delivery of food to customers. We consider the growth in turnover
as an indicator of repeat and new customers.
We maintain our exceptional reputation and credibility with our customers by meeting the brand requirements
implemented by the Franchisor.
Others
The company recognises its responsibility in ensuring it acts in a socially responsible manner. The company has
committed to a rigorous recycling programme and works closely with KFC in order to reduce the carbon footprint
of its activities.
The Directors’ have acted to maximise profit and free cash flow, as shown by the results in the current financial
year in order to create value for shareholders.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditorsHaslerswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 4 October 2023 and signed on its behalf.
 





M F Tahir
Director
Page 3

 
TAFS FOODS LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 4

 
TAFS FOODS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TAFS FOODS LIMITED
 

Opinion


We have audited the financial statements of TAFS FOODS LIMITED (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2022 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.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Page 5

 
TAFS FOODS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TAFS FOODS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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' Responsibilities Statement set out on page 4, 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.


Page 6

 
TAFS FOODS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TAFS FOODS LIMITED (CONTINUED)


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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that:
• had a direct effect on the determination of material amounts and disclosures in the financial statements. These  included the UK Companies Act and tax legislation etc; and
• do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These include those rules governing the fast-food industry such as health and safety, including food hygiene. 
We obtained an understanding of how the company are complying with those legal and regulatory frameworks by inquiring with management. These inquiries were corroborated by a review of documentation issued by the Franchisor and Food Standards Agency and used to assess the extent of compliance with the relevant laws and regulations.
We also reviewed the controls in place for management to detect any non-compliance with health and safety and food hygiene regulations.
We discussed among the audit engagement team regarding the opportunities and incentives, including management override of controls, that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our specific procedures performed to address it are described below:
The principal risks related to inappropriate journal entries to impact the profit for the year and management bias in accounting estimates.
 Procedures performed to address these were as follows: 
• Selecting specific income transactions based on risk criteria and tracing this through to supporting documentation to ensure revenue was appropriately recorded,
• Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process,
• Assessing the appropriateness of accounting estimates and challenging any significant assumptions or judgements made by management,
• Incorporating testing of manual journal entries that were posted throughout the year. In particular, we focused on material journal entries, journal entries posted with unusual account combinations, journal entries crediting revenue or cash, and journal entries with specific defined descriptions. These were scrutinised for evidence of unusual entries,
 
Page 7

 
TAFS FOODS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TAFS FOODS LIMITED (CONTINUED)



• Considering any changes to the control environment. 


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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.





Christina Georgiou (Senior Statutory Auditor)
  
for and on behalf of
Haslers
 
Chartered Accountants
Statutory Auditor
  
Old Station Road
Loughton
Essex
IG10 4PL

4 October 2023
Page 8

 
TAFS FOODS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
£
£

  

Turnover
 4 
13,419,347
13,884,760

Cost of sales
  
(5,894,010)
(5,665,311)

Gross profit
  
7,525,337
8,219,449

Administrative expenses
  
(7,237,450)
(7,379,692)

Other operating income
 5 
-
12,708

Operating profit
 6 
287,887
852,465

Interest receivable and similar income
  
5,947
-

Interest payable and similar expenses
 11 
(167,991)
(72,672)

Profit before tax
  
125,843
779,793

Tax on profit
 12 
(20,718)
(212,977)

Profit for the financial year
  
105,125
566,816

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2022 (2021:£NIL).

The notes on pages 16 to 33 form part of these financial statements.
Page 9

 
TAFS FOODS LIMITED
REGISTERED NUMBER: 02716126

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2022
2021
2021
Note
£
£
£
£

Fixed assets
  

Intangible assets
 13 
199,583
66,163

Tangible assets
 14 
1,975,424
1,611,159

  
2,175,007
1,677,322

Current assets
  

Stocks
 15 
72,670
59,087

Debtors: amounts falling due after more than one year
 16 
78,845
-

Debtors: amounts falling due within one year
 16 
5,137,713
4,388,584

Cash at bank and in hand
 17 
291,808
1,383,744

  
5,581,036
5,831,415

Creditors: amounts falling due within one year
 18 
(2,642,241)
(3,236,131)

Net current assets
  
 
 
2,938,795
 
 
2,595,284

Total assets less current liabilities
  
5,113,802
4,272,606

Creditors: amounts falling due after more than one year
 19 
(3,274,787)
(2,528,042)

Provisions for liabilities
  

Deferred tax
 23 
(249,823)
(260,497)

  
 
 
(249,823)
 
 
(260,497)

Net assets
  
1,589,192
1,484,067


Capital and reserves
  

Called up share capital 
  
5,100
5,100

Other reserves
  
(786,277)
(786,277)

Profit and loss account
  
2,370,369
2,265,244

  
1,589,192
1,484,067


Page 10

 
TAFS FOODS LIMITED
REGISTERED NUMBER: 02716126
    
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 October 2023.




M F Tahir
Director

The notes on pages 16 to 33 form part of these financial statements.

Page 11

 
TAFS FOODS LIMITED
REGISTERED NUMBER: 02716126

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Other reserves
Profit and loss account
Total equity

£
£
£
£

At 1 January 2022
5,100
(786,277)
2,265,244
1,484,067


Comprehensive income for the year

Profit for the year
-
-
105,125
105,125


At 31 December 2022
5,100
(786,277)
2,370,369
1,589,192


The notes on pages 16 to 33 form part of these financial statements.

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021


Called up share capital
Other reserves
Profit and loss account
Total equity

£
£
£
£

At 1 January 2021
5,100
(786,277)
1,698,428
917,251


Comprehensive income for the year

Profit for the year
-
-
566,816
566,816


At 31 December 2021
5,100
(786,277)
2,265,244
1,484,067


The notes on pages 16 to 33 form part of these financial statements.
Page 12

 
TAFS FOODS LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
£
£

Cash flows from operating activities

Profit for the financial year
105,125
566,816

Adjustments for:

Amortisation of intangible assets
31,839
17,111

Depreciation of tangible assets
191,405
246,579

Interest paid
167,991
72,672

Interest received
(5,947)
-

Taxation charge
20,718
212,977

(Increase)/decrease in stocks
(13,583)
1,059

(Increase) in debtors
(827,977)
(3,273,112)

Increase in creditors
3,156,869
1,333,567

Corporation tax received/(paid)
99,157
(26,361)

Net cash generated from operating activities

2,925,597
(848,692)


Cash flows from investing activities

Purchase of intangible fixed assets
(165,260)
(19,145)

Purchase of tangible fixed assets
(555,670)
(558,453)

Interest received
5,947
-

HP interest paid
(11,818)
(21,767)

Net cash from investing activities

(726,801)
(599,365)
Page 13

 
TAFS FOODS LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


2022
2021

£
£



Cash flows from financing activities

Repayment of loans
(3,044,312)
(333,926)

Repayment of/new finance leases
(90,251)
(80,481)

Interest paid
(156,169)
(50,907)

Net cash used in financing activities
(3,290,732)
(465,314)

Net (decrease) in cash and cash equivalents
(1,091,936)
(1,913,371)

Cash and cash equivalents at beginning of year
1,383,744
3,297,115

Cash and cash equivalents at the end of year
291,808
1,383,744


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
291,808
1,383,744

291,808
1,383,744


The notes on pages 16 to 33 form part of these financial statements.

Page 14

 
TAFS FOODS LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2022




At 1 January 2022
Cash flows
At 31 December 2022
£

£

£

Cash at bank and in hand

1,383,744

(1,091,936)

291,808

Debt due after 1 year

(2,447,048)

2,447,048

-

Debt due within 1 year

(597,264)

597,264

-

Finance leases

(169,575)

90,252

(79,323)


(1,830,143)
2,042,628
212,485

The notes on pages 16 to 33 form part of these financial statements.
Page 15

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

TAFS Foods Limited is a private company, limited by shares and incorporated in England and Wales, United Kingdom, with a registration number 02716126. The address of the registered office is 236 High Street, London, E15 2JA

The company's principal activity during the year continued to be that of the sale of fast food for consumption within the restaurant or takeaway under the KFC brand. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The financial statements are presented in pounds sterling which is the functional currency of the company and rounded to the nearest £.

The following principal accounting policies have been applied:

 
2.2

Going concern

The directors have reviewed their business model and projections and are confident that the company can meet its day to day cash flow requirements within its existing facilities.  The directors are of the opinion that the company can continue for the foreseeable future. 
The directors therefore consider it appropriate to prepare the accounts on a going concern basis.

 
2.3

Revenue

Turnover comprises revenue recognised by the company in respect of food and drink supplied through its store outlets which are operated under the KFC brand. Revenue is recognised at the point of sale.

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 16

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.5

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.10

Share-based payments

On 6th April 2013, the trustees of the SIP granted 834 £1 ordinary shares held by the SIP to the
employees of the company. These shares have a vesting period of five years. During this time, in
accordance with FRS 20, the value determined at the grant date of the shares is expensed on a
straight-line basis to the profit and loss account over the vesting period based on the company's
estimate of shares that will eventually vest.
The value is calculated using a generally accepted valuation methodology allowing for the lack of an
observable market price as the company is an unlisted limited company.
If the value of the shares is less than the cost of the shares awarded, the difference is transferred
between the SIP reserve and the profit and loss reserve over the grant period.

Page 17

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.12

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 18

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Short-term leasehold property
-
Straight line over the life of the lease
Motor vehicles
-
25% Straight line
Fixtures and fittings
-
10% Reducing Balance

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Stocks

Stocks are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving stocks.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 19

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.18

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 
2.19

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Page 20

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.19
Financial instruments (continued)


Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

 
2.20

Contribution to share incentive plan (SIP)

In accordance with UTIF 38, contributions to the SIP are not recognised in the Profit and loss account until such time as the shares vest unconditionally with the employees. Until that time, the employee share ownership plan trust's investment in the shares of the company are shown as a reduction in reserves.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.

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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

The directors do not believe that there have been judgements (apart from those involving estimates) made in the process of applying the above accounting policies that have had a significant effect on amounts recognised in the financial statements. 

Page 21

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Sales
13,419,347
13,884,760

13,419,347
13,884,760


Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
13,419,347
13,884,760

13,419,347
13,884,760



5.


Other operating income

2022
2021
£
£

Government grants receivable
-
12,708

-
12,708



6.


Operating profit

The operating profit is stated after charging:

2022
2021
£
£

Other operating lease rentals
565,451
535,276


7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2022
2021
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
24,000
21,000
Page 22

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Employees

Staff costs, including directors' remuneration, were as follows:


2022
2021
£
£

Wages and salaries
3,611,720
3,393,952

Social security costs
246,786
210,650

Cost of defined contribution scheme
21,282
26,048

3,879,788
3,630,650


The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Sales
265
260



Managers
9
8



Administration
2
2

276
270


9.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
251,819
249,855

Company contributions to defined contribution pension schemes
3,312
3,316

255,131
253,171


The highest paid director received remuneration of £109,224 (2021 - £103,995).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,321 (2021 - £1,319).

Page 23

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Interest receivable

2022
2021
£
£


Other interest receivable
5,947
-

5,947
-


11.


Interest payable and similar expenses

2022
2021
£
£


Bank interest payable
156,173
50,905

Finance leases and hire purchase contracts
11,818
21,767

167,991
72,672


12.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
31,392
111,218


31,392
111,218


Total current tax
31,392
111,218

Deferred tax


Origination and reversal of timing differences
(10,674)
101,759

Total deferred tax
(10,674)
101,759


Tax on profit
20,718
212,977
Page 24

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


Profit on ordinary activities before tax
125,843
779,793


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
23,910
148,161

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
2,633
770

Capital allowances for year in excess of depreciation
7,373
(979)

Utilisation of tax losses
(1,130)
-

Other timing differences leading to an increase (decrease) in taxation
(12,068)
65,025

Total tax charge for the year
20,718
212,977


Factors that may affect future tax charges

During March 2021 the UK chancellor announced an expected change to the UK’s main corporation tax
rates from 19% to 25% which was subsequently enacted into the Finance Act in June 2021. The main rate
will increase to 25% from 1 April 2023 and will impact the corporation tax provision of the Company from
that date. The deferred tax provision has been adjusted in these financial statements in recognition of this
change.

Page 25

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Intangible assets




Licenses
Goodwill
Total

£
£
£



Cost


At 1 January 2022
266,030
1,258,387
1,524,417


Additions
165,260
-
165,260



At 31 December 2022

431,290
1,258,387
1,689,677



Amortisation


At 1 January 2022
199,866
1,258,387
1,458,253


Charge for the year on owned assets
31,839
-
31,839



At 31 December 2022

231,705
1,258,387
1,490,092



Net book value



At 31 December 2022
199,585
-
199,585



At 31 December 2021
66,163
-
66,163



Page 26

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

14.


Tangible fixed assets





Short-term leasehold property
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost or valuation


At 1 January 2022
523,951
16,149
4,615,595
5,155,695


Additions
-
-
555,670
555,670



At 31 December 2022

523,951
16,149
5,171,265
5,711,365



Depreciation


At 1 January 2022
518,387
16,149
3,010,000
3,544,536


Charge for the year on owned assets
849
-
190,556
191,405



At 31 December 2022

519,236
16,149
3,200,556
3,735,941



Net book value



At 31 December 2022
4,715
-
1,970,709
1,975,424



At 31 December 2021
5,564
-
1,605,595
1,611,159




The net book value of land and buildings may be further analysed as follows:


2022
2021
£
£

Short leasehold
4,715
5,564

4,715
5,564


The net book value of motor vehicles held under finance leases or hire purchase contracts, included above, were £Nil (2021: £Nil).

Page 27

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Stocks

2022
2021
£
£

Raw materials and consumables
72,670
59,087

72,670
59,087



16.


Debtors

2022
2021
£
£

Due after more than one year

Other debtors
78,845
-

78,845
-


2022
2021
£
£

Due within one year

Other debtors
4,963,553
4,305,189

Prepayments and accrued income
174,160
83,395

5,137,713
4,388,584



17.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
291,808
1,383,744

291,808
1,383,744


Page 28

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

18.


Creditors: Amounts falling due within one year

2022
2021
£
£

Bank loans
-
597,264

Trade creditors
1,269,706
896,693

Corporation tax
208,257
77,708

Other taxation and social security
716,110
207,689

Obligations under finance lease and hire purchase contracts
66,102
88,581

Other creditors
156,950
913,526

Accruals and deferred income
225,116
454,670

2,642,241
3,236,131



19.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Bank loans
-
2,447,048

Net obligations under finance leases and hire purchase contracts
13,221
80,994

Other creditors
3,261,566
-

3,274,787
2,528,042



Page 29

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

20.


Loans


Analysis of the maturity of loans is given below:


2022
2021
£
£

Amounts falling due within one year

Bank loans
-
597,264


-
597,264

Amounts falling due 1-2 years

Bank loans
-
624,141


-
624,141

Amounts falling due 2-5 years

Bank loans
-
1,822,908


-
1,822,908


-
3,044,313



21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2022
2021
£
£


Within one year
66,102
89,326

Between 1-5 years
13,221
80,994

79,323
170,320

Page 30

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022


22.
Other Reserves


2022

£

Reserve for investment in own shares

Opening balance at 1 January 2022
(1,219,639)

Transfer excess cost of shares awarded to profit and loss reserve 
-

Balance at 31 December 2022 & 31 December 2021
(1,219,639)



2022

£

Reserve for deferred tax on investment  in own shares
-

Opening balance - at 1 January 2022
(433,362)

Deferred tax released on share award
-

Transfer of deferred tax on above excess cost
-

Balance at 31 December 2022 & 31 December 2021
(433,362)


2022

£

Other reserves as at 31 December 2022
(786,277)

(786,277)


Other Reserves

Shares held in trust Number
Cost
2022
2021

£
£
£
£

At 1 January 2022
834
834
1,219,639
1,219,639

Transfer excess cost of shares awarded to profit and loss reserve

Total
834
834
1,219,639
1,219,639

TAFS Foods Limited established a Share Incentive Plan (SIP) to purchase shares in the company for the benefit of employees. The precise method of distribution of shares to employees has not yet been decided by the trustees.
 
Page 31

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

22.Other Reserves (continued)


The value of the shares at the grant date was £100,080. As TAFS Foods Limited is a private company, there is no observable market price for the shares granted. Therefore, the value of the shares was measured using generally accepted valuation methodology which allowed for this. As the value of the shares is less than the cost of shares, the difference is being transferred from the SIP reserve to the profit and loss reserve over the grant period.



23.


Deferred taxation




2022


£






At beginning of year
(260,497)


Charged to profit or loss
10,674



At end of year
(249,823)

The provision for deferred taxation is made up as follows:

2022
2021
£
£


Accelerated capital allowances
(249,823)
(260,497)

(249,823)
(260,497)



24.


Contingent liabilities

During the year FT Foods Limited, an entity under common control, refinanced their loan facilities. The new loan facilities are secured via a debenture which contains a fixed charge over the assets of TAFS Foods Limited, MFT Restaurants Limited, FT Foods Limited and its subsidiaries.


25.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £21,282 (2021: £26,048). The amount due to the pension scheme was £8,170 (2021: £13,428).

Page 32

 
TAFS FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

26.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
252,692
224,000

Later than 1 year and not later than 5 years
1,010,768
896,000

Later than 5 years
1,257,785
1,373,417

2,521,245
2,493,417

During the year some leases relating to rents expired. These remain under negotiation at the date these accounts were signed.


27.


Transactions with directors

At the year end, £259,070 was due from the directors of the company (2021: £53,868). Interest of £5,947 (2021: £Nil) has been charged on the loan. 


28.


Related party transactions

During the year management charge income was charged to entities under common control totalling £100,000 (2021: £Nil). 
At the year-end the following amounts were due from/(to) the related parties:


2022
2021
£
£

Entities under common control
4,304,950
3,218,527
4,304,950
3,218,527

 
Page 33