REGISTERED NUMBER: |
Kestrel Foods Limited |
Strategic Report, Directors' Report and |
Financial Statements |
for the Year Ended 30 April 2023 |
REGISTERED NUMBER: |
Kestrel Foods Limited |
Strategic Report, Directors' Report and |
Financial Statements |
for the Year Ended 30 April 2023 |
Kestrel Foods Limited (Registered number: NI031111) |
Contents of the Financial Statements |
for the Year Ended 30 April 2023 |
Page |
Company information | 1 |
Strategic report | 2 | to | 3 |
Directors' report | 4 | to | 5 |
Report of the independent auditors | 6 | to | 7 |
Statement of comprehensive income | 8 |
Statement of financial position | 9 |
Statement of changes in equity | 10 |
Statement of cash flows | 11 |
Notes to the financial statements | 12 | to | 25 |
Kestrel Foods Limited |
Company Information |
for the Year Ended 30 April 2023 |
Directors: |
Registered office: |
Registered number: |
Auditors: |
Statutory Auditor |
Chartered Accountants |
Armagh Business Centre |
2 Loughgall Road |
Armagh |
BT61 7NH |
Solicitors: |
22 Callender Street |
Belfast |
Antrim |
BT1 5BU |
Kestrel Foods Limited (Registered number: NI031111) |
Strategic Report |
for the Year Ended 30 April 2023 |
The directors present their strategic report for the year ended 30 April 2023. |
Review of business |
The principal activities of the Company during the year were the manufacture and sale of premium snacks, primarily chocolate, nuts & dried fruit and granola under the Forest Feast, ACTI-SNACK and Just Live a Little brands as well as key private labels. |
Development and performance |
The Company continues to perform strongly with turnover increasing by 20.4% in the year to 30 April 2023. This growth was achieved by expanding the number of distribution points within the GB market alongside increasing the portfolio of newly developed products. |
Development of the Company's portfolio of branded products has been rewarded with a 36.3% growth in branded business during the year. It remains on course to reach its future growth targets with focus on continuing geographic expansion. Fitting with the overall business strategy the Company acquired the Just Live a Little brand in December 2021, allowing growth going forwards in the breakfast category. |
Key Performance Indicators |
The Board monitors the progress of the Company by reference to the following KPIs |
Turnover | £23,166,719 (2022: £19,244,185) |
Gross profit % | 27.0% (2022: 25.9%) |
Operating profit/(loss) | £559,038 (2022: £531,674) |
Net debt | £2,206,288 (2022: £1,886,459) |
The directors have been encouraged in the new financial year with continued year on year growth in branded sales. They are committed to long-term success and profitability of the Company through a combination of product development, building brand awareness, increasing distribution and operational efficiency. |
Business environment |
The snacking and breakfast sectors continue to grow but remain highly competitive, with more entrants competing for space, combined with more aggressive pricing of supermarket own brand products. This has emphasised the need for differentiated products and continued brand development to grow market share. |
Strategy |
The Company strategy is to continue to carve out space within the snacking market, building brand awareness, distribution, and sales of both the Forest Feast and ACTI-SNACK brands. Innovation remains central to this growth, by continuing to broaden the product range with revolutionary and on-trend products that delight consumers and add category value. The Company also continues to grow its presence in the breakfast category, following the acquisition of the Just Live a Little brand. Further growth will come from new product development, building brand awareness and distribution points. The business will also continue developing manufacturing capability through key investments in infrastructure and people. |
Principal risks and uncertainties |
The Board of Directors convene monthly to review the Company's financial and operational performance. Annual forecasts and formal business plans are prepared and variances against these forecasts are measured on a monthly basis to ensure their effects can be accurately estimated and reacted to. |
Performance in the sector is affected by consumer buying behaviour and general economic conditions. Specific sectoral factors such as seasonal buying of dried fruit and nuts can determine sales performance. Product availability and price fluctuations are other sectoral risks and the directors counter this through forward buying commodities on contract with reliable suppliers. Global weather conditions can have an adverse effect on the commodities we buy. The directors have a policy that a minimum of two suppliers are contracted where possible per commodity. All suppliers are regularly audited, performance monitored and reviewed on a regular basis. |
The Company is exposed to foreign exchange risk in the normal course of business, principally on purchase of product denominated in other currencies from the business base currency. Forward contracts are utilised to limit exposure. |
Kestrel Foods Limited (Registered number: NI031111) |
Strategic Report |
for the Year Ended 30 April 2023 |
Future developments |
Forest Feast and ACTI-SNACK brands have an exciting pipeline of innovation with the objective to continue to build distribution. Just Live a Little brand is being re-launched centred around a gluten free proposition. |
To support the Company's growth plans an additional site which included both a factory facility and warehouse is now fully operational, and an extensive capital investment program has been completed to enhance manufacturing capability and to increase output capacities. With inflationary pressures driving costs upwards the Company is focused on improving operational efficiencies. The Company has embarked on a Lean Manufacturing program with key objectives of continuous improvement, cost reduction, production agility and elimination of waste. Integral to the Company's ethos is to strive to use the business as a force for good by sourcing sustainably, reducing environmental footprint and giving back to the community. |
The Company's vision, purpose and values are set out below. |
Our Vision |
To become a leading powerhouse of better snacks for all occasions. |
Our Purpose |
To make innovative and award-winning premium snacks & granola that delight our consumers and customers in our world class manufacturing environment, with an ongoing commitment to ethical trading and sustainable sourcing. |
Our Values |
Trailblazing. We have an entrepreneurial spirit. We are curious about the world, trends and consumers. We look ahead always searching for the new, the better, the brave and the bold, acting quickly to adapt to changing markets. |
Excellence. We do business the right way. We source sustainably. We treat suppliers, customers & each other with respect and we give back to the community. We put the safety of our team and products first. We are passionate about our brands and products, and we are encouraged to improve our products, our processes and to deliver better performance and superior quality. |
Ownership. We treat the business as if it is our own. We embrace every challenge and opportunity. We are empowered to take initiative; we own it and get on with it. |
Teamplay. We value and respect each other, and wholeheartedly believe in working together to achieve a common goal. |
On behalf of the board: |
Kestrel Foods Limited (Registered number: NI031111) |
Directors' Report |
for the Year Ended 30 April 2023 |
The directors present their report with the financial statements of the company for the year ended 30 April 2023. |
Principal activity |
The principal activity of the company in the year under review was that of the manufacture and sale of premium snacks primarily chocolate, nuts & dried fruit and granola. |
Dividends |
The profit for the year after providing for depreciation and taxation amounted to £318,966 (2022: £450,222). The directors have not paid an interim dividend and do not recommend payment of a final dividend (2022: £nil). |
Directors |
The directors shown below have held office during the whole of the period from 1 May 2022 to the date of this report. |
Mr M R Palmer is a Non-Executive Director. |
Political donations and expenditure |
The company did not make any disclosable political donations in the current year. |
Post events |
There have been no significant events affecting the company since the year-end. |
Financial risk management |
The company is exposed to financial risk in the normal course of business, however the directors have implemented effective risk management systems within the business with the implementation of credit limits on customers, virtual cash-free environment, effective insurance, signature policy on all financial transactions and bank reconciliation procedures. |
Price risk |
The company is exposed to commodity price risk as a result of its operations. This is countered through forward buying contracts with approved suppliers. |
Foreign exchange risk |
The company has its principal operations in the United Kingdom and Ireland and therefore fluctuations in currency exchange rates may affect reported operating results and financial position. The company is exposed to some foreign exchange risk in the normal course of business, principally on purchases of product denominated in other currencies from the business units' base currency. Forward contracts are utilised to limit exposure. |
Credit risk |
Policies and procedures exist to ensure that customers have an appropriate credit history. All customers are allocated a credit limit which is regularly monitored. Accounts that exceed their credit limit or have debts exceeding agreed terms are put on automatic stop until the directors are satisfied that the account has been brought up to date and payment made. |
Liquidity risk |
The company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the company has sufficient available funds for operations and planned expansions. |
Interest rate cash flow risk |
The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances, which earn interest at variable rates. The company has a policy of maintaining debt at variable rates. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. |
Disclosures required under schedule 7 |
Likely future developments in the business of the company are discussed in the strategic report. |
Kestrel Foods Limited (Registered number: NI031111) |
Directors' Report |
for the Year Ended 30 April 2023 |
Statement of directors' responsibilities |
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies 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 as to disclosure of information to auditors |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Auditors |
The auditors, Wylie Ruddell, (Statutory Auditors), have indicated their willingness to continue in office in accordance with the provisions of Section 485 of the Companies Act 2006. |
On behalf of the board: |
Report of the Independent Auditors to the Members of |
Kestrel Foods Limited |
Opinion |
We have audited the financial statements of Kestrel Foods Limited (the 'company') for the year ended 30 April 2023 which comprise the Statement of comprehensive income, Statement of financial position, Statement of changes in equity, Statement of cash flows and Notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 30 April 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. |
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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic report and the Directors' report, but does not include the financial statements and our Report of the auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit: |
- | the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Report of the Independent Auditors to the Members of |
Kestrel Foods Limited |
Responsibilities of directors |
As explained more fully in the Statement of directors' responsibilities set out on page five, 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 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. |
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 a Report of the auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to failure to comply with tax legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting journal entries to manipulate the financial statements, inappropriate revenue recognition and management bias in determining accounting estimates. Audit procedures performed by the engagement team included: |
- | Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation (including data protection legislation) and fraud; |
- | Identification and testing of significant journal entries; and |
- | Evaluation and, where appropriate, challenging assumptions and judgements made by management in determining significant accounting estimates. |
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
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 Report of the auditors. |
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 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 a Report of the auditors 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. |
for and on behalf of |
Statutory Auditor |
Chartered Accountants |
Armagh Business Centre |
2 Loughgall Road |
Armagh |
BT61 7NH |
Kestrel Foods Limited (Registered number: NI031111) |
Statement of Comprehensive Income |
for the Year Ended 30 April 2023 |
2023 | 2022 |
Notes | £ | £ |
Revenue | 4 |
Cost of sales | ( |
) | ( |
) |
Gross profit |
Distribution costs | ( |
) | ( |
) |
Administrative expenses | ( |
) | ( |
) |
474,459 | 346,106 |
Other operating income |
Operating profit | 6 |
Interest receivable and similar income |
559,038 | 532,857 |
Interest payable and similar expenses | 7 | ( |
) | ( |
) |
Profit before taxation |
Tax on profit | 8 | ( |
) |
Profit for the financial year |
Other comprehensive income |
Share option reserve |
Income tax relating to other comprehensive income |
Other comprehensive income for the year, net of income tax |
Total comprehensive income for the year |
Kestrel Foods Limited (Registered number: NI031111) |
Statement of Financial Position |
30 April 2023 |
2023 | 2022 |
Notes | £ | £ |
Fixed assets |
Intangible assets | 9 |
Property, plant and equipment | 10 |
Investments | 11 |
Current assets |
Inventories | 12 |
Receivables | 13 |
Cash at bank | 14 |
Payables |
Amounts falling due within one year | 15 | ( |
) | ( |
) |
Net current assets |
Total assets less current liabilities |
Payables |
Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
Provisions for liabilities | 19 | ( |
) | ( |
) |
Accruals and deferred income | 20 | ( |
) | ( |
) |
Net assets |
Capital and reserves |
Called up share capital | 21 |
Share premium | 22 |
Share option reserve | 22 |
Retained earnings | 22 |
Shareholders' funds |
The financial statements were approved by the Board of Directors and authorised for issue on |
Kestrel Foods Limited (Registered number: NI031111) |
Statement of Changes in Equity |
for the Year Ended 30 April 2023 |
Called up | Share |
share | Retained | Share | option | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 May 2021 |
Changes in equity |
Total comprehensive income | - | - |
Balance at 30 April 2022 |
Changes in equity |
Total comprehensive income | - | - |
Balance at 30 April 2023 |
Kestrel Foods Limited (Registered number: NI031111) |
Statement of Cash Flows |
for the Year Ended 30 April 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 26 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase payments paid |
( |
) |
( |
) |
Tax paid |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New stockline loan |
Movement in commercial finance | ( |
) |
Capital repayments on term loans | (297,985 | ) | (149,429 | ) |
New HP agreements | 546,400 | 25,500 |
Capital repayments on HP contracts | ( |
) | ( |
) |
New capital grants |
Net cash from financing activities |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
27 |
1,861,388 |
Cash and cash equivalents at end of year | 27 | 464,933 | 631,903 |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements |
for the Year Ended 30 April 2023 |
1. | Statutory information |
Kestrel Foods Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | Accounting policies |
Basis of preparing the financial statements |
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared on a going concern basis and under the historical cost convention. |
Preparation of consolidated financial statements |
The company has claimed exemption from preparing consolidated accounts on the basis that the subsidiary company Kestrel Foods (Ireland) Limited is dormant and is not material for the purpose of giving a true and fair view. |
Revenue |
Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Goodwill |
Goodwill, being the amount paid in connection with the acquisition of a brand in 2021, is being amortised evenly over its estimated useful life of five years. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Other intangibles and website development costs are being amortised evenly over their estimated useful life of 5 years. |
Property, plant and equipment |
Long leasehold property | - |
Plant and machinery | - |
Office equipment | - |
Motor vehicles | - |
Government grants |
Grants that relate to a specific capital expenditure are treated as deferred income and credited to the Income Statement over the related asset's useful economic life, until all performance conditions are met at which point the grant in total is credited to reserves. Grants that relate to revenue expenditure are credited to the Income Statement over the period that the revenue expenditure relates to. |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
Inventories |
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
2. | Accounting policies - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
2. | Accounting policies - continued |
Share option scheme |
The fair value of the share options granted by the company is determined using the market valuation approach. This fair value is measured at the date of the grant and charged to the profit and loss over the vesting period. |
Deferred tax during the vesting period is calculated to indicate the potential tax deduction the company will receive on the exercise of the share options. |
Financial instruments |
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments: |
(i) Financial assets |
Basic financial assets, including trade and other receivables, cash and and bank balances and amounts owed by related parties are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method. |
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss. |
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. |
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. |
(ii) Financial liabilities |
Basic financial liabilities, including trade and other payables, bank loans and overdrafts and amounts owed to related parties 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. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
(iii) Offsetting |
Financial assets and liabilities are offset and 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 lability simultaneously. |
Receivables |
Short term receivables 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. |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
2. | Accounting policies - continued |
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. |
Payables |
Short term payables 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. |
Dividends |
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable. |
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 the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position 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 Statement of Financial Position. |
3. | Critical accounting judgements and key sources of estimation uncertainty |
Estimates and judgements are required when applying accounting policies. These are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The company makes estimates and assumptions concerning the future, which can involve a high degree of judgement or complexity. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below: |
Useful economic lives of intangible and tangible assets |
The annual depreciation and amortisation charges for intangible and tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 10 for the carrying amount of the assets, and note 2 for the useful economic lives for each class of assets. |
Inventories |
The inventory figure on the statement of financial position is subject to judgement and estimate around the overhead absorption applied to the year end stock figure as well as an estimate for any provision for impairment. The company utilises a consistent and reasonable basis in estimating this absorption rate and provision amount, with suitable logical calculations applied to arrive at a total stock figure after impairment for the year end. See note 12 for the split by category and stated after any provision for impairment. |
Promotions and rebates |
Included within accruals are provisions for sales promotions and rebates. The provisions have been calculated based on agreements entered into with customers and based on the expectations of the sales team. |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
4. | Revenue |
The revenue and profit before taxation are attributable to the one principal activity of the company. |
An analysis of revenue by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
Rest of the world | 141,248 | 37,914 |
5. | Employees and directors |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production (including management) | 85 | 80 |
Administration | 32 | 28 |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
The directors are deemed to be the key management of the company. |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
6. | Operating profit |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Share options provision |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) |
Goodwill amortisation |
Other intangibles amortisation |
Website development costs amortisation |
Auditor's remuneration - audit |
Auditor's remuneration - taxation service |
7. | Interest payable and similar expenses |
2023 | 2022 |
£ | £ |
Bank interest and fees |
Factoring interest |
Other interest |
Hire purchase |
8. | Taxation |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
Over provision in prior year | (24,745 | ) | (5,691 | ) |
Deferred tax | ( |
) |
Tax on profit | ( |
) |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
8. | Taxation - continued |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Adjustment in relation to R&D tax credits | (60,436 | ) | (35,691 | ) |
Increase in tax losses carried forward due to super deduction claim | (32,931 | ) | (71,791 | ) |
Effect of change in tax rate on deferred tax | 152,938 | - |
Effect of change in tax rate on losses carried forward | (87,576 | ) | - |
Total tax charge/(credit) | 61,735 | (20,198 | ) |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Share option reserve | 25,864 | 62,390 |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Share option reserve | - | 19,026 |
9. | Intangible fixed assets |
Website |
Other | development |
Goodwill | intangibles | costs | Totals |
£ | £ | £ | £ |
Cost |
At 1 May 2022 |
Additions |
At 30 April 2023 |
Amortisation |
At 1 May 2022 |
Amortisation for year |
At 30 April 2023 |
Net book value |
At 30 April 2023 |
At 30 April 2022 |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
10. | Property, plant and equipment |
Long |
leasehold | Plant and | Office | Motor |
property | machinery | equipment | vehicles | Totals |
£ | £ | £ | £ | £ |
Cost |
At 1 May 2022 |
Additions |
At 30 April 2023 |
Depreciation |
At 1 May 2022 |
Charge for year |
At 30 April 2023 |
Net book value |
At 30 April 2023 |
At 30 April 2022 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and | Motor |
machinery | vehicles | Totals |
£ | £ | £ |
Cost |
At 1 May 2022 |
Additions |
Reclassification/transfer |
At 30 April 2023 |
Depreciation |
At 1 May 2022 |
Charge for year |
Reclassification/transfer | ( |
) | ( |
) |
At 30 April 2023 |
Net book value |
At 30 April 2023 |
At 30 April 2022 |
11. | Investments in subsidiaries |
Shares in |
group |
undertakings |
£ |
Cost |
At 1 May 2022 |
and 30 April 2023 |
Net book value |
At 30 April 2023 |
At 30 April 2022 |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
11. | Investments in subsidiaries - continued |
The company's investments at the Statement of financial position date in the share capital of companies include the following: |
Registered office: 3rd Floor Quayside Business Park, Mill Street, Dundalk, Co Louth |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
12. | Inventories |
2023 | 2022 |
£ | £ |
Raw materials |
Finished goods |
13. | Receivables: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Trade receivables |
Other receivables |
VAT |
Prepayments and accrued income |
14. | Cash at bank |
2023 | 2022 |
£ | £ |
Cash and bank balances | 464,933 | 631,903 |
15. | Payables: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Commercial finance (see note 17) |
Hire purchase contracts (see note 18) |
Trade payables |
PAYE / NI | 76,399 | 84,472 |
VAT | 117,074 | - |
Other creditors |
Accruals |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
15. | Payables: amounts falling due within one year - continued |
The bank loans and commercial finance liabilities are secure by the following:- |
a) A First Legal Mortgage/Charge over the factory and warehouse at 7 Diviny Drive, Carn Industrial Estate, Portadown. |
b) A Debenture over the assets and undertakings of Kestrel Foods Limited. |
c) A First Ranking Chattels Mortgage in favour of the Bank over Martini 3 Bagger. |
d) A commercial finance agreement executed between the parties together with a debenture both dated 5 November 1999. |
16. | Payables: amounts falling due after more than one year |
2023 | 2022 |
£ | £ |
Bank loans (see note 17) |
Hire purchase contracts (see note 18) |
17. | Loans |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Commercial finance |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
18. | Leasing agreements |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
In more than five years |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
18. | Leasing agreements - continued |
Non-cancellable |
operating leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
19. | Provisions for liabilities |
2023 | 2022 |
£ | £ |
Deferred tax |
Tax losses carried forward | ( |
) | ( |
) |
Share options | (25,864 | ) | - |
Accelerated capital allowances | 637,241 | 470,400 |
246,477 | 210,606 |
Deferred tax |
£ |
Balance at 1 May 2022 |
Charge to Statement of comprehensive income during year |
Balance at 30 April 2023 |
20. | Accruals and deferred income |
2023 | 2022 |
£ | £ |
Deferred government grants | 429,512 | 268,982 |
21. | Called up share capital |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | 1 | 55,556 | 55,556 |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
21. | Called up share capital - continued |
Share based payment |
During the year ended 30 April 2023, the company had one share based payment arrangement which is described below. |
Date of grant | 26 November 2019, 9 September 2021 and 11 November 2021 |
Number of share options granted | 3,546 |
Contractual life | 10 years |
Vesting conditions | Fifth anniversary of grant date |
The exercise price of the options were set at £57.48 and £44.76 per share which was formally agreed with HMRC. |
2023 | 2023 | 2022 | 2022 |
Number of options | Weighted average exercise price | Number of options | Weighted average exerciseprice |
£ | £ |
Outstanding at 1 May | 3,546 | 54.65 | 2,758 | 57.48 |
Granted | 0 | - | 788 | 44.76 |
Forfeited | 0 | - | 0 | - |
Exercised | 0 | - | 0 | - |
Expired | 0 | - | 0 | - |
Outstanding at 30 April | 3,546 | 54.65 | 3,546 | 54.65 |
Exercisable at 30 April | 0 | - | 0 | - |
The company is unable to directly measure the fair value of employee services received. Instead the fair value of the share options granted is determined using the market valuation approach. |
The expense arising from share-based payment transactions in the year is £36,526 (2022: £19,026). |
22. | Reserves |
Share |
Retained | Share | option |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 May 2022 | 7,808,546 |
Profit for the year |
Cash share issue | - | - | 36,526 | 36,526 |
Deferred tax on share options | - | - | 25,864 | 25,864 |
At 30 April 2023 | 8,189,902 |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
23. | Capital commitments |
2023 | 2022 |
£ | £ |
Contracted but not provided for in the |
financial statements |
There is a capital commitment of £nil at year-end in relation to the acquisition of tangible fixed assets (2022: £38,853). |
24. | Related party transactions |
The Kestrel Foods Special Pension Fund is considered to be a related party by virtue of Mr M Hall (director) being trustee of the pension fund. Transactions with the pension fund during the year include £127,500 (2022: £105,500) rent payable. |
25. | Ultimate controlling party |
Mr Michael Hall is the ultimate controlling party by virtue of his shareholding in the company. |
26. | Reconciliation of profit for the financial year to cash generated from operations |
2023 | 2022 |
£ | £ |
Profit for the financial year |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) |
Share option reserve | 36,526 | 19,026 |
Release of capital grants | ( |
) | ( |
) |
Finance costs | 178,337 | 102,833 |
Finance income | - | (1,183 | ) |
Taxation | ( |
) |
1,233,680 | 1,115,047 |
Increase in inventories | ( |
) | ( |
) |
Increase in trade and other debtors | ( |
) | ( |
) |
Increase in trade and other creditors |
Cash generated from operations |
27. | Cash and cash equivalents |
The amounts disclosed on the Statement of cash flows in respect of cash and cash equivalents are in respect of these Statement of financial position amounts: |
Year ended 30 April 2023 |
30.4.23 | 1.5.22 |
£ | £ |
Cash and cash equivalents | 464,933 | 631,903 |
Year ended 30 April 2022 |
30.4.22 | 1.5.21 |
£ | £ |
Cash and cash equivalents | 631,903 | 1,861,388 |
Kestrel Foods Limited (Registered number: NI031111) |
Notes to the Financial Statements - continued |
for the Year Ended 30 April 2023 |
28. | Analysis of changes in net debt |
At 1.5.22 | Cash flow | At 30.4.23 |
£ | £ | £ |
Net cash |
Cash at bank | 631,903 | (166,970 | ) | 464,933 |
631,903 | ( |
) | 464,933 |
Debt |
Finance leases | (47,222 | ) | (478,951 | ) | (526,173 | ) |
Debts falling due within 1 year | (1,602,765 | ) | 30,355 | (1,572,410 | ) |
Debts falling due after 1 year | (868,375 | ) | 295,737 | (572,638 | ) |
(2,518,362 | ) | (152,859 | ) | (2,671,221 | ) |
Total | (1,886,459 | ) | (319,829 | ) | (2,206,288 | ) |