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Registered number: 09556834









FT FOODS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 21 DECEMBER 2022

 
FT FOODS LIMITED
 
 
COMPANY INFORMATION


Director
M F Tahir 




Registered number
09556834



Registered office
236 High Street

London

E15 2JA




Independent auditors
Haslers
Chartered Accountants & Statutory Auditor

Old Station Road

Loughton

Essex

IG10 4PL





 
FT FOODS LIMITED
 

CONTENTS



Page
Strategic Report
 
1
Director's Report
 
2 - 3
Director's Responsibilities Statement
 
4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10 - 11
Statement of Changes in Equity
 
12
Statement of Cash Flows
 
13 - 14
Analysis of Net Debt
 
15
Notes to the Financial Statements
 
16 - 31

 
FT FOODS LIMITED
 
 
STRATEGIC REPORT
FOR THE PERIOD ENDED 21 DECEMBER 2022

Introduction
 
The principal activity of the company during the period 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 period.
The financial position of the Company is presented in the Balance Sheet.  The total shareholders’ funds at 21 December 2022 show a strong position of £1,095,724 (2021 : £1,087,468).
Cash balance at the end of the period totalled £711,252 (2021: £2,235,906).

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 period under review was £22,735,604 (2021: £20,867,259), profit/(loss) before tax was £63,931 (2021: £634,863) and EBITDA was £1,187,101 (2021: £2,235,906).

Directors Statement of compliance with duty to promote the success of the company
 
The Board of Directors considers that it has complied in all material respect with their s172(1) duties.


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



M F Tahir
Director
Page 1

 
FT FOODS LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE PERIOD ENDED 21 DECEMBER 2022

The director presents his report and the financial statements for the period ended 21 December 2022.

Results and dividends

The profit for the period, after taxation, amounted to £8,256 (2021 - £352,969).

No dividends have been proposed for the current or previous financial periods.


Directors

The directors who served during the period were:

M F Tahir 
M Tahir (appointed 9 December 2022, resigned 9 December 2022)

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

 
FT FOODS LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE PERIOD ENDED 21 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
period in order to create value for shareholders.

Disclosure of information to auditors

The director at the time when this Director's 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

 
FT FOODS LIMITED
 
 
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 21 DECEMBER 2022

The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006He is 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

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

Opinion


We have audited the financial statements of FT Foods Limited (the 'Company') for the period ended 21 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 21 December 2022 and of its profit for the period 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 director's 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 director with respect to going concern are described in the relevant sections of this report.


Page 5

 
FT FOODS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FT 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 director is 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 Director's Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's 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 Director's 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 director's 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 Director's Responsibilities Statement set out on page 4, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
FT FOODS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FT 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 period 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,

 
Page 7

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


• Incorporating testing of manual journal entries that were posted throughout the period. 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,

• Considering any changes to the control environment.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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

 
FT FOODS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 21 DECEMBER 2022

2022
2021
Note
£
£

  

Turnover
 4 
22,735,604
20,867,259

Cost of sales
  
(10,278,435)
(8,507,932)

Gross profit
  
12,457,169
12,359,327

Administrative expenses
  
(12,132,830)
(11,605,630)

Other operating income
 5 
-
114,031

Operating profit
  
324,339
867,728

Interest receivable and similar income
  
5,566
-

Interest payable and similar expenses
 9 
(265,974)
(232,865)

Profit before tax
  
63,931
634,863

Tax on profit
 10 
(55,675)
(281,894)

Profit for the financial period
  
8,256
352,969

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 31 form part of these financial statements.
Page 9

 
FT FOODS LIMITED
REGISTERED NUMBER: 09556834

BALANCE SHEET
AS AT 21 DECEMBER 2022

21 December
21 December
31 December
31 December
2022
2022
2021
2021
Note
£
£
£
£

Fixed assets
  

Intangible assets
 11 
3,081,914
4,194,374

Tangible assets
 12 
5,996,683
3,634,418

  
9,078,597
7,828,792

Current assets
  

Stocks
 13 
153,672
98,918

Debtors: amounts falling due after more than one year
 14 
3,278,378
-

Debtors: amounts falling due within one year
 14 
16,011,213
4,369,036

Cash at bank and in hand
 15 
891,763
234,734

  
20,335,026
4,702,688

Creditors: amounts falling due within one year
 16 
(7,214,555)
(4,817,574)

Net current assets/(liabilities)
  
 
 
13,120,471
 
 
(114,886)

Total assets less current liabilities
  
22,199,068
7,713,906

Creditors: amounts falling due after more than one year
 17 
(20,678,576)
(6,224,583)

Provisions for liabilities
  

Deferred tax
 19 
(424,768)
(401,855)

  
 
 
(424,768)
 
 
(401,855)

Net assets
  
1,095,724
1,087,468


Capital and reserves
  

Called up share capital 
 20 
10
10

Profit and loss account
  
1,095,714
1,087,458

  
1,095,724
1,087,468


Page 10

 
FT FOODS LIMITED
REGISTERED NUMBER: 09556834
    
BALANCE SHEET (CONTINUED)
AS AT 21 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 31 form part of these financial statements.

Page 11

 
FT FOODS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 21 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2022
10
1,087,458
1,087,468


Comprehensive income for the period

Profit for the period
-
8,256
8,256


At 21 December 2022
10
1,095,714
1,095,724



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


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2021
10
734,489
734,499


Comprehensive income for the year

Profit for the year
-
352,969
352,969


At 31 December 2021
10
1,087,458
1,087,468


The notes on pages 16 to 31 form part of these financial statements.
Page 12

 
FT FOODS LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 21 DECEMBER 2022

21 December
31 December
2022
2021
£
£

Cash flows from operating activities

Profit for the financial period
8,256
352,969

Adjustments for:

Amortisation of intangible assets
425,114
899,802

Depreciation of tangible assets
437,648
468,375

Government grants
-
(69,125)

Interest paid
265,974
232,865

Interest received
(5,566)
-

Taxation charge
32,294
281,894

(Increase)/decrease in stocks
(54,754)
1,203

(Increase) in debtors
(14,920,558)
(2,586,794)

Increase in creditors
3,796,995
337,236

Corporation tax (paid)
(4,573)
(282,628)

Net cash generated from operating activities

(10,019,170)
(364,203)


Cash flows from investing activities

Purchase of intangible fixed assets
(185,349)
-

Purchase of tangible fixed assets
(2,799,913)
(633,879)

Government grants received
-
69,125

Interest received
5,566
-

Net cash from investing activities

(2,979,696)
(564,754)
Page 13

 
FT FOODS LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 21 DECEMBER 2022

21 December
31 December

2022
2021

£
£



Cash flows from financing activities

New secured loans
20,608,435
-

Repayment of loans
(6,930,613)
(1,261,777)

Other new loans
244,047
-

Interest paid
(265,974)
(232,865)

Net cash used in financing activities
13,655,895
(1,494,642)

Net increase in cash and cash equivalents
657,029
(2,423,599)

Cash and cash equivalents at beginning of period
234,734
2,658,333

Cash and cash equivalents at the end of period
891,763
234,734


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
891,763
234,734

891,763
234,734


The notes on pages 16 to 31 form part of these financial statements.

Page 14

 
FT FOODS LIMITED
 

ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 21 DECEMBER 2022




At 1 January 2022
Cash flows
At 21 December 2022
£

£

£

Cash at bank and in hand

234,734

657,029

891,763

Debt due after 1 year

(5,351,888)

(15,326,688)

(20,678,576)

Debt due within 1 year

(1,579,656)

1,405,749

(173,907)


(6,696,810)
(13,263,910)
(19,960,720)

The notes on pages 16 to 31 form part of these financial statements.
Page 15

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

1.


General information

FT Foods Limited is a private company, limited by shares and incorporated in England and Wales, United
Kingdom, with a registration number 09556834. The address of the registered office is 236 High Street,
London, E15 2JA.

The company's principal activity during the period continued to be that of 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 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.

 
2.5

Interest income

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

Page 16

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

2.Accounting policies (continued)

 
2.6

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.

 
2.7

Borrowing costs

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

 
2.8

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.

 
2.9

Current and deferred taxation

The tax expense for the period 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.

Page 17

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

2.Accounting policies (continued)

 
2.10

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.

Other 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.

 
2.11

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.

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.

Page 18

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

2.Accounting policies (continued)

 
2.12

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.13

Stocks

Stocks are stated at the lower of cost and net realisable value.



 
2.14

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.

 
2.15

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.

 
2.16

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.

 
2.17

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.

Page 19

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

2.Accounting policies (continued)

 
2.18

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 instrument.
 
Page 20

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

2.Accounting policies (continued)


2.18
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.


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 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

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

4.


Turnover

2022
2021
£
£

Sales
22,735,604
20,867,259

22,735,604
20,867,259


All turnover arose within the United Kingdom.


5.


Other operating income

2022
2021
£
£

Other operating income
-
44,906

Government grants receivable
-
69,125

-
114,031



6.


Auditors' remuneration

During the period, 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
24,500
Page 22

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

7.


Employees

Staff costs were as follows:


2022
2021
£
£

Wages and salaries
5,838,800
4,910,198

Social security costs
420,395
341,132

Cost of defined contribution scheme
42,779
47,028

6,301,974
5,298,358


The average monthly number of employees, including the director, during the period was as follows:


        2022
        2021
            No.
            No.







Staff
537
334


8.


Interest receivable

2022
2021
£
£


Other interest receivable
5,566
-

5,566
-


9.


Interest payable and similar expenses

2022
2021
£
£


Bank interest payable
256,977
213,196

Other loan interest payable
8,997
3,046

Other interest payable
-
16,623

265,974
232,865

Page 23

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

10.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
32,294
262,444

Adjustments in respect of previous periods
-
(2,836)


32,294
259,608


Total current tax
32,294
259,608

Deferred tax


Origination and reversal of timing differences
23,381
22,286

Total deferred tax
23,381
22,286


Tax on profit
55,675
281,894

Factors affecting tax charge for the period/year

The tax assessed for the period/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
63,930
634,862


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
12,147
120,624

Effects of:


Non-tax deductible amortisation of goodwill and impairment
75,671
165,309

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,042
-

Capital allowances for period/year in excess of depreciation
(59,030)
(12,554)

Adjustments to tax charge in respect of prior periods
-
(2,836)

Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax
360
(11,596)

Other timing differences leading to an increase (decrease) in taxation
25,485
22,947

Total tax charge for the period/year
55,675
281,894

Page 24

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022
 
10.Taxation (continued)


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.


11.


Intangible assets






Licences
Goodwill
Total

£
£
£



Cost


At 1 January 2022
260,776
7,037,150
7,297,926


Additions
185,349
-
185,349


Reduction in goodwill
-
(872,695)
(872,695)



At 21 December 2022

446,125
6,164,455
6,610,580



Amortisation


At 1 January 2022
130,878
2,972,674
3,103,552


Charge for the period on owned assets
26,845
398,269
425,114



At 21 December 2022

157,723
3,370,943
3,528,666



Net book value



At 21 December 2022
288,402
2,793,512
3,081,914



At 31 December 2021
129,898
4,064,476
4,194,374



Page 25

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

12.


Tangible fixed assets







Short-term leasehold property
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost or valuation


At 1 January 2022
691,551
15,058
4,688,009
5,394,618


Additions
-
-
2,799,913
2,799,913



At 21 December 2022

691,551
15,058
7,487,922
8,194,531



Depreciation


At 1 January 2022
177,769
8,471
1,573,960
1,760,200


Charge for the period on owned assets
48,920
3,765
384,963
437,648



At 21 December 2022

226,689
12,236
1,958,923
2,197,848



Net book value



At 21 December 2022
464,862
2,822
5,528,999
5,996,683



At 31 December 2021
513,782
6,587
3,114,049
3,634,418




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


21 December
31 December
2022
2021
£
£

Short leasehold
464,862
513,782

464,862
513,782


Page 26

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

13.


Stocks

21 December
31 December
2022
2021
£
£

Raw materials and consumables
153,672
98,918

153,672
98,918



14.


Debtors

21 December
31 December
2022
2021
£
£

Due after more than one year

Other debtors
3,278,378
-

3,278,378
-


21 December
31 December
2022
2021
£
£

Due within one year

Other debtors
14,668,734
4,142,160

Prepayments and accrued income
1,342,479
226,876

16,011,213
4,369,036



15.


Cash and cash equivalents

21 December
31 December
2022
2021
£
£

Cash at bank and in hand
891,763
234,734

891,763
234,734


Page 27

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

16.


Creditors: Amounts falling due within one year

21 December
31 December
2022
2021
£
£

Bank loans
-
1,578,725

Other loans
173,907
-

Trade creditors
3,766,302
1,601,887

Corporation tax
602,716
597,909

Other taxation and social security
956,141
320,242

Other creditors
764,856
155,692

Accruals and deferred income
950,633
563,119

7,214,555
4,817,574



17.


Creditors: Amounts falling due after more than one year

21 December
31 December
2022
2021
£
£

Bank loans
20,608,435
5,351,888

Other loans
70,141
-

Other creditors
-
872,695

20,678,576
6,224,583


The aggregated bank loans and overdrafts of £20,608,435 (2021: £6,930,612), are secured by a fixed charge over all assets of the company. In addition to this, the loans are secured via a debenture which contains a fixed charge over the assets of TAFS Foods Limited, MFT Restaurants Limited and the subsidiaries of the entity.

Page 28

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

18.


Loans


Analysis of the maturity of loans is given below:


21 December
31 December
2022
2021
£
£

Amounts falling due within one year

Bank loans
-
1,578,725

Other loans
173,907
-


173,907
1,578,725

Amounts falling due 1-2 years

Bank loans
1,462,673
1,096,693

Other loans
70,141
-


1,532,814
1,096,693

Amounts falling due 2-5 years

Bank loans
19,145,762
2,979,728


19,145,762
2,979,728

Amounts falling due after more than 5 years

Bank loans
-
1,275,466

-
1,275,466

20,852,483
6,930,612


Page 29

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

19.


Deferred taxation






2022


£






At beginning of year
(401,855)


Charged to profit or loss
(22,913)



At end of year
(424,768)

The provision for deferred taxation is made up as follows:

21 December
31 December
2022
2021
£
£


Accelerated capital allowances
(424,768)
(401,855)

(424,768)
(401,855)


20.


Share capital

21 December
31 December
2022
2021
£
£
Allotted, called up and fully paid



1,000 (2021 - 1,000) Ordinary shares of £0.01 each
10
10



21.


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 £43,984 (2021: £47,028). Contributions totalling £24,505 (2021: £23,611) were payable to the fund at the balance sheet date and are included in creditors

Page 30

 
FT FOODS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 21 DECEMBER 2022

22.


Commitments under operating leases

At 21 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

21 December
31 December
2022
2021
£
£


Not later than 1 year
777,000
554,500

Later than 1 year and not later than 5 years
2,656,708
1,913,625

Later than 5 years
6,198,875
3,365,000

9,632,583
5,833,125


23.


Transactions with directors

At the period end, £55,593 was due from the directors of the company (2021: £Nil). Interest of £5,566 (2021: £Nil) has been charged on the loan. 


24.


Related party transactions

During the period management charge income was charged to entities under common control totalling £450,000 (2021: £Nil).
At the period end, the following amounts were due from/(to) the related parties:


21 December
31 December
2022
2021
£
£

Entities under common control
9,425,526
3,942,068
9,425,526
3,942,068


25.


Controlling party

The ultimate controlling party is M F Tahir.
 
Page 31