Company Registration No. 03713964 (England and Wales)
RAYNOR FOODS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2023
31 March 2023
RAYNOR FOODS LIMITED
COMPANY INFORMATION
Directors
AS Raynor
Mrs RA Raynor
M Raynor
Mrs HA Bell
AP Newland
TÆM Hollands
Company number
03713964
Registered office
Unit 4
Farrow Road
Widford Industrial Estate
Chelmsford
Essex
CM1 3TH
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
Business address
Unit 4
Farrow Road
Widford Industrial Estate
Chelmsford
Essex
CM1 3TH
Bankers
Barclays Bank Plc - Brentwood
75 High Street
Brentwood
Essex
CM14 4RP
RAYNOR FOODS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
RAYNOR FOODS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
The principal activity of the company continued to be that of food manufacturers.
The year under review saw a return to more normal trading conditions, with restrictions in place during the pandemic having been lifted which resulted in increased levels of activity. Performance was further improved through new contract wins and retention of existing customers.
Principal risks and uncertainties
We are proud of our record on food safety and consider ourselves to be at the forefront of the UK food manufacturing industry with regards to eliminating as far as possible the risk of contamination at all points in our supply chain.
The business operates in a competitive environment and our customers demand value for money as well as a high-quality product. We have built long term partnerships with our key customers that run much deeper than a simple transactional relationship.
The costs of raw materials and other inputs (particularly energy) are driven by global commodity markets that are outside of our direct control. To manage and mitigate this risk we proactively seek efficiency and process improvements, as well as maintaining sound procurement disciplines. Where we cannot mitigate cost increases in full on the supply side, our partnership model with key customers enables us to adjust prices accordingly.
Continued availability of suitable labour is key to the business as we continue to grow. We saw a reduction in the availability of labour after the UK left the EU and have put in place a rigorous recruitment process and reward package that has enabled us to recruit and retain at the appropriate level. We will continue to invest in process efficiency in order to maximise productivity and mitigate the risk of rising wages in the current inflationary environment.
Key performance indicators
The key performance indicators used to review and monitor the company are shown below:-
2023 2022
Turnover £24,325,022 £16,826,605
Gross profit £6,271,594 £3,549,529
EBITDA £2,150,998 £787,039
Gross margin 25.8% 21.1%
EBITDA margin 8.8% 4.7%
The directors are very pleased with the results for the year under review. Turnover increased by 44.6% which drove improvements at both gross margin and EBITDA margin.
AP Newland
Director
10 October 2023
RAYNOR FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
AS Raynor
Mrs RA Raynor
M Raynor
Mrs HA Bell
AP Newland
TÆM Hollands
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Auditor
Rickard Luckin Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
RAYNOR FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
AP Newland
Director
10 October 2023
RAYNOR FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RAYNOR FOODS LIMITED
- 4 -
Opinion
We have audited the financial statements of Raynor Foods Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
RAYNOR FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RAYNOR FOODS LIMITED
- 5 -
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 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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Capability of the audit in detecting irregularity, including fraud
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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
RAYNOR FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RAYNOR FOODS LIMITED
- 6 -
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; food safety legislation; trade legislation; data protection legislation; anti-bribery and anti-corruption legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates, in particular the measurement of depreciation and the useful economic life of fixed assets;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting cash or any revenue account;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Discussions with management; and
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
RAYNOR FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RAYNOR FOODS LIMITED
- 7 -
Other matters which we are required to address
This is the first year that Raynor Foods Limited has required an audit, therefore the comparative figures are unaudited.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Paul Forster
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
10 October 2023
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
RAYNOR FOODS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
Year
Year
ended
ended
31 March
31 March
2023
2022
Unaudited restated
Notes
£
£
Turnover
3
24,325,022
16,826,605
Cost of sales
(18,053,428)
(13,277,076)
Gross profit
6,271,594
3,549,529
Administrative expenses
(4,486,009)
(3,367,046)
Other operating income
80,570
336,614
Operating profit
4
1,866,155
519,097
Interest receivable and similar income
-
419
Interest payable and similar expenses
7
(193,052)
(154,743)
Profit before taxation
1,673,103
364,773
Tax on profit
8
(251,827)
(127,927)
Profit for the financial year
1,421,276
236,846
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RAYNOR FOODS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Unaudited
Notes
£
£
£
£
Fixed assets
Tangible assets
9
2,943,149
2,560,454
Investments
10
1
1
2,943,150
2,560,455
Current assets
Stocks
12
725,938
477,285
Debtors
13
3,715,419
2,316,743
Cash at bank and in hand
723,297
266,017
5,164,654
3,060,045
Creditors: amounts falling due within one year
14
(5,468,803)
(4,384,497)
Net current liabilities
(304,149)
(1,324,452)
Total assets less current liabilities
2,639,001
1,236,003
Creditors: amounts falling due after more than one year
15
(230,465)
(398,243)
Provisions for liabilities
Deferred tax liability
17
390,000
240,500
(390,000)
(240,500)
Net assets
2,018,536
597,260
Capital and reserves
Called up share capital
20
104
104
Capital redemption reserve
21
1
1
Profit and loss reserves
22
2,018,431
597,155
Total equity
2,018,536
597,260
The financial statements were approved by the board of directors and authorised for issue on 10 October 2023 and are signed on its behalf by:
AP Newland
Director
Company Registration No. 03713964
RAYNOR FOODS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2021 (Unaudited)
104
1
360,309
360,414
Period ended 31 March 2022 (Unaudited)
Profit and total comprehensive income for the period
-
-
236,846
236,846
Balance at 31 March 2022 (Unaudited)
104
1
597,155
597,260
Period ended 31 March 2023:
Profit and total comprehensive income for the period
-
-
1,421,276
1,421,276
Balance at 31 March 2023
104
1
2,018,431
2,018,536
RAYNOR FOODS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,296,227
363,796
Interest paid
(190,811)
(141,569)
Income taxes refunded
32,694
89,644
Net cash inflow from operating activities
1,138,110
311,871
Investing activities
Purchase of tangible fixed assets
(415,249)
(129,738)
Proceeds from disposal of tangible fixed assets
4,000
Loans made to related parties
(466,473)
(9,587)
Repayment of loans to related parties
7,808
Interest received
419
Net cash used in investing activities
(877,722)
(131,098)
Financing activities
Proceeds from new bank loans
650,809
584,884
Repayment of bank loans
(168,171)
(134,752)
Payment of finance leases obligations
(285,746)
(355,468)
Net cash generated from financing activities
196,892
94,664
Net increase in cash and cash equivalents
457,280
275,437
Cash and cash equivalents at beginning of year
266,017
(9,420)
Cash and cash equivalents at end of year
723,297
266,017
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information
Raynor Foods Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 4, Farrow Road, Widford Industrial Estate, Chelmsford, Essex, CM1 3TH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 405 of the Companies Act 2006 not to prepare consolidated accounts on the basis that the subsidiary's inclusion in the consolidated accounts is not material for the purpose of giving a true and fair view. The financial statements present information about the company as an individual entity and not about its group.
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.2
Turnover
Turnover represents amounts receivable for goods net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Leasehold
Over the years remaining on the lease
Plant and machinery
10 - 33% on reducing balance and 10% straight line
Motor vehicles
33% on reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.13
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the earnings basis model to determine market value. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred.
1.17
Restatement of profit and loss account
The comparative results in the profit and loss account have been restated to reallocate sales rebates charged to cost of sales and administrative expenditure. The directors feel that this is necessary in order for the financial statements to show a true and fair view. The effect of these adjustment has been to reduce sales by £843,275, to reduce cost of sales by £752,215 and to reduce administrative expenditure by £99,864, for the year ended 31 March 2022.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation of tangible fixed assets
Depreciation is charged annually on relevant tangible fixed assets. The basis for the write down rate requires judgements to be made by the directors to estimate individual assets' expected useful economic lives.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Income from the sale of goods
24,325,022
16,826,605
2023
2022
£
£
Other revenue
Interest income
-
419
Grants received
80,570
336,614
4
Operating profit
2023
2022
Operating profit for the period is stated after charging/(crediting):
£
£
Research and development costs
500,411
564,823
Government grants
(80,570)
(336,614)
Fees payable to the company's auditor for the audit of the company's financial statements
25,500
Depreciation of owned tangible fixed assets
285,323
266,252
(Profit)/loss on disposal of tangible fixed assets
(480)
1,690
Operating lease charges
262,523
346,422
Government grants
Government grant income relates to various ongoing projects which relate to the development and commercialisation of new products, processes, and services.
There are no unfulfilled conditions or other contingencies attaching to grants that have been recognised in income and there have been no other forms of government assistance from which the entity has directly benefited.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
195
140
Sales and distribution
45
42
Administration
25
21
Directors
6
6
Total
271
209
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
6,613,461
4,894,896
Social security costs
582,921
406,523
Pension costs
118,758
88,688
7,315,140
5,390,107
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
619,500
396,377
Company pension contributions to defined contribution schemes
18,673
15,889
638,173
412,266
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2022 - 6).
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 2 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
204,545
89,351
Company pension contributions to defined contribution schemes
5,394
4,274
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
90,548
58,480
Other interest on financial liabilities
2,333
90,548
60,813
Other finance costs:
Interest on finance leases and hire purchase contracts
102,504
93,930
193,052
154,743
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
104,092
Adjustments in respect of prior periods
(1,765)
(50,573)
Total current tax
102,327
(50,573)
Deferred tax
Origination and reversal of timing differences
149,500
178,500
Total tax charge
251,827
127,927
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,673,103
364,773
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
317,890
69,307
Tax effect of expenses that are not deductible in determining taxable profit
10,360
295
Tax effect of income not taxable in determining taxable profit
(35,220)
(39,017)
Change in unrecognised deferred tax assets
(18,729)
84,822
Effect of change in corporation tax rate
40,375
52,679
Depreciation on assets not qualifying for tax allowances
7,170
10,414
Research and development tax credit
(68,254)
(30,929)
Under/(over) provided in prior years
(1,765)
(19,644)
Taxation charge for the period
251,827
127,927
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
9
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2022
2,395,856
1,360,846
442,703
4,199,405
Additions
43,256
424,971
203,311
671,538
Disposals
(7,460)
(79,899)
(87,359)
At 31 March 2023
2,439,112
1,778,357
566,115
4,783,584
Depreciation and impairment
At 1 April 2022
673,558
749,543
215,850
1,638,951
Depreciation charged in the year
132,278
78,288
74,757
285,323
Eliminated in respect of disposals
(6,576)
(77,263)
(83,839)
At 31 March 2023
805,836
821,255
213,344
1,840,435
Carrying amount
At 31 March 2023
1,633,276
957,102
352,771
2,943,149
At 31 March 2022
1,722,298
611,303
226,853
2,560,454
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
124,597
27,942
Motor vehicles
257,508
141,816
382,105
169,758
10
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
11
1
1
11
Subsidiaries
Details of the company's subsidiaries at 31 March 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Raynor Logistics Limited
United Kindgom
Ordinary
100.00
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
644,688
464,596
Finished goods and goods for resale
81,250
12,689
725,938
477,285
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,990,959
1,764,829
Corporation tax recoverable
30,929
Amounts owed by group undertakings
55,894
40,482
Other debtors
480,233
303,349
Prepayments and accrued income
188,333
177,154
3,715,419
2,316,743
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
2,171,952
1,443,664
Obligations under hire purchase and finance leases
16
103,919
211,248
Trade creditors
1,974,306
1,793,497
Corporation tax
104,092
Other taxation and social security
128,553
112,070
Other creditors
22,302
291,160
Accruals and deferred income
963,679
532,858
5,468,803
4,384,497
The hire purchase and finance lease liabilities totalling £103,919 (2022: £211,248) are secured against the relevant assets they are financing.
Included within bank loans and overdrafts is a confidential invoice discounting scheme totalling £2,171,952 (2022: £1,366,050) which is secured against the corresponding sales invoices.
Included within bank loans and overdrafts are bank loans of £Nil (2022: £17,658), previously secured with a fixed charge over the companies assets.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
245,650
Obligations under hire purchase and finance leases
16
230,465
152,593
230,465
398,243
The hire purchase and finance lease liabilities totalling £230,465 (2022: £152,593) are secured against the relevant assets they are financing.
Included within bank loans and overdrafts are bank loans of £Nil (2022: £155,093), previously secured with a fixed charge over the companies assets.
16
Hire purchase and finance lease obligations
2023
2022
Future minimum lease payments due under hire purchase and finance leases:
£
£
Within one year
103,919
211,249
In two to five years
230,465
152,592
334,384
363,841
Hire purchase and finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
390,000
240,500
2023
Movements in the year:
£
Liability at 1 April 2022
240,500
Charge to profit or loss
149,500
Liability at 31 March 2023
390,000
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
17
Deferred taxation
(Continued)
- 22 -
The deferred tax liability set out above is expected to reverse after more than 12 months and relates to accelerated capital allowances.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
118,758
88,688
The company operates defined contribution pension schemes for all qualifying employees. The assets of the schemes are held separately from those of the company in independently administered funds.
19
Share-based payment transactions
The following summarises the number and weighted average exercise price for share options:
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 April 2022
544
544
11.50
11.50
Granted
931
5.65
Outstanding at 31 March 2023
1,475
544
7.81
11.50
Exercisable at 31 March 2023
Accumulated Enterprise Management Incentive share options have been granted to two of the directors on Ordinary £0.01 shares.
Share options will vest and become exercisable in event of the sale of the business, or by the tenth anniversary of the grant date.
The fair value of options granted during the year has been calculated using the earnings basis model on the basis of being the most appropriate method for the company. Non-vesting conditions and market conditions are taken into account when estimating the fair value of the option at grant date. The market value determined thereon has been approved by HMRC.
Modification
During the year, a special resolution was passed to approve and adopt revised share option scheme rules to apply to both new share options granted and revoke previously adopted rules applying to existing options. The changes relate to vesting conditions being amended from applying on the fifth anniversary of the grant date. Share options will all now vest and become exercisable in event of the sale of the business, or by the tenth anniversary of the grant date.
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
20
Share capital
2023
2022
£
£
Ordinary share capital
Allotted, issued and fully paid
10,000 Ordinary shares of 1p each
100
100
4 Redeemable shares of £1 each
4
4
104
104
The company has one class of ordinary shares which carry one voting right and no right to fixed income.
Additionally, the company has two classes of redeemable shares which carry no voting rights and no right to fixed income.
1,475 Ordinary £0.01 shares are reserved for issue under options as detailed in note 19.
21
Capital redemption reserve
The capital redemption reserve relates to a share that the company bought back in previous years.
22
Profit and loss reserves
All profit and loss reserves are distributable in both the current and preceding year.
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
313,595
254,319
Between two and five years
691,332
704,519
In over five years
960,260
1,097,440
1,965,187
2,056,278
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
24
Directors' transactions
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
A Raynor and Mrs R Raynor -
-
-
40,000
40,000
Mrs HA Bell -
-
-
128,013
128,013
M Raynor -
-
-
81,990
81,990
AP Newland -
-
-
20,000
20,000
-
270,003
270,003
25
Ultimate controlling party
There is no ultimate controlling party, for this and the prior year.
26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,421,276
236,846
Adjustments for:
Taxation charged
251,827
127,927
Finance costs
193,052
154,743
Investment income
(419)
(Gain)/loss on disposal of tangible fixed assets
(480)
1,690
Depreciation and impairment of tangible fixed assets
285,323
266,252
Movements in working capital:
Increase in stocks
(248,653)
(43,348)
Increase in debtors
(1,159,602)
(578,997)
Increase in creditors
553,484
199,102
Cash generated from operations
1,296,227
363,796
RAYNOR FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
27
Analysis of changes in net debt
1 April 2022
Cash flows
New finance leases
31 March 2023
£
£
£
£
Cash at bank and in hand
266,017
457,280
-
723,297
Borrowings excluding overdrafts
(1,689,314)
(482,638)
-
(2,171,952)
Obligations under finance leases
(363,841)
285,746
(256,289)
(334,384)
(1,787,138)
260,388
(256,289)
(1,783,039)
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