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REGISTERED NUMBER: 00605246 (England and Wales)















Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 May 2023

for

Bates Farms & Dairy Limited

Bates Farms & Dairy Limited (Registered number: 00605246)






Contents of the Financial Statements
for the Year Ended 31 May 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Income Statement 9

Other Comprehensive Income 10

Balance Sheet 11

Statement of Changes in Equity 12

Cash Flow Statement 13

Notes to the Cash Flow Statement 14

Notes to the Financial Statements 15


Bates Farms & Dairy Limited

Company Information
for the Year Ended 31 May 2023







DIRECTORS: C Bates
S M Bates
C E Bates





REGISTERED OFFICE: 21 Stamford Road
Birkdale
Southport
Merseyside
PR8 4ES





REGISTERED NUMBER: 00605246 (England and Wales)





AUDITORS: Topping & Company
Chartered Accountants & Statutory Auditors
209 Liverpool Road
Birkdale
Southport
Merseyside
PR8 4PH

Bates Farms & Dairy Limited (Registered number: 00605246)

Strategic Report
for the Year Ended 31 May 2023

The directors present their strategic report for the year ended 31 May 2023.

REVIEW OF BUSINESS
The accounting year ended 31 May 2023 has seen the Company continue to trade profitably within a highly competitive market.

The Company's turnover has increased from £20,658,268 (2022) to £26,226,461 (2023). The Company has not acquired additional rounds in the year under review. The Company's gross profit margin and ultimately the Company's profitability for the year ended 31 May 2023 have both fallen on the prior year. The company's gross profit margin has fallen from 13.2% (2022) to 11.4% (2023). The price per litre of unpasturised "raw milk" purchased from the Company's farmer suppliers have increased in the year under review on the prior year, as has the price per litre of diesel which ultimately have impacted on the profitability of the company with such costs not largely being passed onto the company's customers. The Company's profit for the year ended 31 May 2023 amounted to £322,829 (2022 £405,807).

In light of the above the Directors are pleased with the results of the Company for the year and look forward to the following financial year with optimism.

PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties which the Company faces is the increased competition within the industry and the fluctuating cost of raw milk.

The Directors continue to monitor the economic conditions and their business strategies will be modified to reflect the changes in market conditions.

FINANCIAL KEY PERFORMANCE INDICATORS
The key Company performance indicators utilised by the Company are sales, profits and cash flows which are regularly monitored throughout the year by the Directors.

Revenue: Year ended 31 May 2023 £26,226,461 (2022: £20,658,268).

Operating profit: Year ended 31 May 2023 £441,271 (2022: £493,374).

Decrease in cash and cash equivalents in the year ended 31 May 2023 amounted to £174,746 (2022 increase: £103,551) and are as given by the Company's cash flow statement on page 13, and related notes.

ON BEHALF OF THE BOARD:





C E Bates - Director


18 December 2023

Bates Farms & Dairy Limited (Registered number: 00605246)

Report of the Directors
for the Year Ended 31 May 2023

The directors present their report with the financial statements of the company for the year ended 31 May 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of the sale of milk and other related products.

DIVIDENDS
Interim dividends paid during the year ended 31 May 2023 were £308 on Ordinary shares of £1 each.

The directors recommend that no final dividend be paid on these shares.

Interim dividends paid during the year ended 31 May 2023 were £399,692 on Alphabet shares of £1 each.

The directors recommend that no final dividend be paid on these shares.

The total distribution of dividends for the year ended 31 May 2023 will be £400,000.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 June 2022 to the date of this report.

C Bates
S M Bates
C E Bates

POLITICAL DONATIONS AND EXPENDITURE
Charitable donations made by the company in the year ended 31 May 2023 collectively amounted to £585 (2022: £558).

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 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.

Bates Farms & Dairy Limited (Registered number: 00605246)

Report of the Directors
for the Year Ended 31 May 2023


AUDITORS
The auditors, Topping & Company, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





S M Bates - Director


18 December 2023

Report of the Independent Auditors to the Members of
Bates Farms & Dairy Limited

Opinion
We have audited the financial statements of Bates Farms & Dairy Limited (the 'company') for the year ended 31 May 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 31 May 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 Report of the Directors, 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Bates Farms & Dairy Limited


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 Report of the Directors.

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.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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.

Report of the Independent Auditors to the Members of
Bates Farms & Dairy Limited


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:

As part of our planning process:
- We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
- We obtained an understanding of the legal and regulatory frameworks applicable to the company.
- We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
- Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
- Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to depreciation, accruals and prepayments.
- Assessing the extent of compliance, or lack of, with the relevant laws and regulations in particular those that are central to the entities ability to continue in operation.
- Testing key revenue lines, in particular cut-off, for evidence of management bias.
- Performing a physical verification of key assets.
- Obtaining third-party confirmation of material bank balances.
- Documenting and verifying all significant related party balances and transactions.

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 auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

Report of the Independent Auditors to the Members of
Bates Farms & Dairy Limited


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.




Janet Topping (Senior Statutory Auditor)
for and on behalf of Topping & Company
Chartered Accountants & Statutory Auditors
209 Liverpool Road
Birkdale
Southport
Merseyside
PR8 4PH

18 December 2023

Bates Farms & Dairy Limited (Registered number: 00605246)

Income Statement
for the Year Ended 31 May 2023

31.5.23 31.5.22
Notes £    £   

TURNOVER 3 26,226,461 20,658,268

Cost of sales 23,226,126 17,928,197
GROSS PROFIT 3,000,335 2,730,071

Administrative expenses 2,574,064 2,257,826
426,271 472,245

Other operating income 15,000 21,129
OPERATING PROFIT 6 441,271 493,374

Interest receivable and similar income 3,327 154
PROFIT BEFORE TAXATION 444,598 493,528

Tax on profit 7 121,769 87,721
PROFIT FOR THE FINANCIAL YEAR 322,829 405,807

Bates Farms & Dairy Limited (Registered number: 00605246)

Other Comprehensive Income
for the Year Ended 31 May 2023

31.5.23 31.5.22
Notes £    £   

PROFIT FOR THE YEAR 322,829 405,807


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

322,829

405,807

Bates Farms & Dairy Limited (Registered number: 00605246)

Balance Sheet
31 May 2023

31.5.23 31.5.22
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 - -
Tangible assets 11 1,437,644 1,157,031
Investment property 12 385,341 385,341
1,822,985 1,542,372

CURRENT ASSETS
Stocks 13 97,126 84,073
Debtors 14 1,792,702 1,667,139
Cash at bank 892,444 1,067,190
2,782,272 2,818,402
CREDITORS
Amounts falling due within one year 15 2,109,475 1,827,182
NET CURRENT ASSETS 672,797 991,220
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,495,782

2,533,592

PROVISIONS FOR LIABILITIES 17 147,549 108,188
NET ASSETS 2,348,233 2,425,404

CAPITAL AND RESERVES
Called up share capital 18 867 867
Capital redemption reserve 19 433 433
Retained earnings 19 2,346,933 2,424,104
SHAREHOLDERS' FUNDS 2,348,233 2,425,404

The financial statements were approved by the Board of Directors and authorised for issue on 18 December 2023 and were signed on its behalf by:





C E Bates - Director


Bates Farms & Dairy Limited (Registered number: 00605246)

Statement of Changes in Equity
for the Year Ended 31 May 2023

Called up Capital
share Retained redemption Total
capital earnings reserve equity
£    £    £    £   
Balance at 1 June 2021 867 2,368,297 433 2,369,597

Changes in equity
Dividends - (350,000 ) - (350,000 )
Total comprehensive income - 405,807 - 405,807
Balance at 31 May 2022 867 2,424,104 433 2,425,404

Changes in equity
Dividends - (400,000 ) - (400,000 )
Total comprehensive income - 322,829 - 322,829
Balance at 31 May 2023 867 2,346,933 433 2,348,233

Bates Farms & Dairy Limited (Registered number: 00605246)

Cash Flow Statement
for the Year Ended 31 May 2023

31.5.23 31.5.22
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 722,336 699,829
Tax paid (89,874 ) (96,450 )
Net cash from operating activities 632,462 603,379

Cash flows from investing activities
Purchase of tangible fixed assets (465,573 ) (153,582 )
Sale of tangible fixed assets - 3,600
Interest received 3,327 154
Net cash from investing activities (462,246 ) (149,828 )

Cash flows from financing activities
Amount introduced by directors 205,038 -
Amount withdrawn by directors (150,000 ) -
Equity dividends paid (400,000 ) (350,000 )
Net cash from financing activities (344,962 ) (350,000 )

(Decrease)/increase in cash and cash equivalents (174,746 ) 103,551
Cash and cash equivalents at beginning of
year

2

1,067,190

963,639

Cash and cash equivalents at end of year 2 892,444 1,067,190

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Cash Flow Statement
for the Year Ended 31 May 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
31.5.23 31.5.22
£    £   
Profit before taxation 444,598 493,528
Depreciation charges 184,961 171,810
Profit on disposal of fixed assets - (128 )
Finance income (3,327 ) (154 )
626,232 665,056
Increase in stocks (13,053 ) (37,234 )
Increase in trade and other debtors (125,447 ) (424,722 )
Increase in trade and other creditors 234,604 496,729
Cash generated from operations 722,336 699,829

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 May 2023
31.5.23 1.6.22
£    £   
Cash and cash equivalents 892,444 1,067,190
Year ended 31 May 2022
31.5.22 1.6.21
£    £   
Cash and cash equivalents 1,067,190 963,639


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.6.22 Cash flow At 31.5.23
£    £    £   
Net cash
Cash at bank 1,067,190 (174,746 ) 892,444
1,067,190 (174,746 ) 892,444
Total 1,067,190 (174,746 ) 892,444

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements
for the Year Ended 31 May 2023

1. STATUTORY INFORMATION

Bates Farms & Dairy Limited is a private limited company, incorporated and registered in England and Wales (registered number 00605246). The address of the registered office is 21, Stamford Road, Birkdale, Southport, Merseyside, PR8 4ES.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 ('FRS 102') "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention except for the modification to a fair value basis for investment property.

The principle accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

The company's functional and presentational currency is GBP.

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Income and revenue recognition
Turnover represents net invoiced sales of goods, excluding value added tax and trade discounts, derived from ordinary activities. The principal activity of the company in the year under review was that of the sale of milk and other related products. The company recognises revenue when the amount of revenue can be measured reliably and when it is probable that future economic benefits will flow to the company. The company has processes in place to ensure that the recognition of revenue streams is in the correct accounting period which is usually when the customer has signed for the delivery of the goods. Cash sales are recognised at the point of sale.

Other operating income is accounted for on a receivable basis.

Tangible fixed assets
All tangible fixed assets are initially recorded at cost. Cost includes all expenditure directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is provided at the following annual rates in order to write off the cost of each asset less its residual amount over its estimated useful life:

Buildings - at varying rates on cost (between 13 years and 44 years)
Plant and machinery - 10% on cost
Fixtures and fittings - 20% on cost
Motor vehicles - 20% on cost
Computer equipment - 33 1/3% on cost

Land is not depreciated.

At each reporting date the carrying values of the company's tangible fixed assets are reviewed to determine whether there is an indication that an asset may be impaired (accounting policy: impairment of non-financial assets and financial assets).

Investment property
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

2. ACCOUNTING POLICIES - continued

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is calculated on a first in, first out basis and includes all costs of purchase consistently applied from year to year.

At each reporting date the carrying value of the company's stocks are reviewed to determine whether there is an indication that the carrying value of the company's stocks may be impaired (accounting policy: impairment of non-financial and financial assets).

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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 or other future taxable profits.

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.

Cash and cash equivalents
Cash is valued in the balance sheet at cost. For the purpose of the cash flow statement, cash and cash equivalents comprise cash on hand and is subject to insignificant risk of changes in value.

Goodwill
Goodwill, being the amount paid in connection with the acquisition of businesses in 2010, 2012 and 2014, is amortised over its estimated useful life of four years on a straight line basis.

At each reporting date the carrying value of the company's goodwill is reviewed to determine whether there is an indication that the carrying value of the company's goodwill may be impaired (accounting policy: impairment of non-financial assets and financial assets).

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

2. ACCOUNTING POLICIES - continued

Financial instruments
Financial instruments recognised in the balance sheet include cash, trade and other receivables and trade and other payables.

Debt instruments that are payable or receivable within one year are measured at the undiscounted amount of the cash expected to be paid or received.

Financial assets are derecognised when the rights to receive cash flows from the asset have expired. Provision is made when there is objective evidence that the company will not be able to collect certain debts. Bad debts are written off when identified. Financial liabilities are derecognised when the obligations under the liability is discharged, cancelled or expires.

Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

Impairment of non-financial assets and financial assets
At each reporting date financial assets and non-financial assets not carried at fair value, like investment property and tangible fixed assets and goodwill, are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less cost to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.

Stocks are also reviewed for impairment at each reporting date. The carrying value of each item of stock, or group of similar items, is compared with its selling price less costs to complete and sell. If an item of stock or group of similar items is impaired, its carrying amount is reduced to its selling price less costs to complete and sell, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss is subsequently reversed, the carrying amount of an asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

4. EMPLOYEES AND DIRECTORS
31.5.23 31.5.22
£    £   
Wages and salaries 3,487,460 3,091,076
Social security costs 347,093 297,007
Other pension costs 75,690 93,234
3,910,243 3,481,317

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

4. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
31.5.23 31.5.22

Office staff 14 16
Dairy staff 20 21
Rounds persons staff 20 20
Mechanics staff 3 3
Depot staff 30 23
Van sales staff 30 29
117 112

5. DIRECTORS' EMOLUMENTS
31.5.23 31.5.22
£    £   
Directors' remuneration 147,150 135,630
Directors' pension contributions to money purchase schemes 1,313 15,245

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 2 2

6. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.5.23 31.5.22
£    £   
Depreciation - owned assets 184,960 171,810
Profit on disposal of fixed assets - (128 )
Auditors' remuneration 9,325 8,275

In addition to auditors' remuneration payable by the company to the auditor in the year ended 31 May 2023 of £9,325 (2022: £8,275) further amounts were payable by the company to the auditor in the year ended 31 May 2023 for accountancy and tax advisory services collectively in the amount of £3,000 (2022: £3,000).

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
31.5.23 31.5.22
£    £   
Current tax:
UK corporation tax 82,408 89,874

Deferred tax 39,361 (2,153 )
Tax on profit 121,769 87,721

UK corporation tax has been charged at 25% (2022 - 19%).

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

7. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.5.23 31.5.22
£    £   
Profit before tax 444,598 493,528
Profit multiplied by the standard rate of corporation tax in the UK of
19.895% (2022 - 19%)

88,453

93,770

Effects of:
Expenses not deductible for tax purposes - (24 )
Capital allowances in excess of depreciation (6,045 ) (3,872 )

Deferred taxation 39,361 (2,153 )
Total tax charge 121,769 87,721

UK Corporation Tax has been charged at 25% (FY23)/ 19% (FY22) (2022 - 19%)

8. DIVIDENDS
31.5.23 31.5.22
£    £   
Ordinary share of £1
Interim 308 231
Alphabet shares of £1 each
Interim 399,692 349,769
400,000 350,000

The following dividends were paid to the company's Alphabet shareholders in the year ended 31 May 2023 in respect of A Ordinary shares of £1 each: £NIL (2022: £NIL), B Ordinary shares of £1 each: £74,942 (2022: £74,884), C Ordinary shares of £1 each: £55,154 (2022: £62,615), D Ordinary shares of £1 each: £24,923 (2022: £18,692), E Ordinary shares of £1 each: £19,846 (2022: £14,885), F Ordinary shares of £1 each: £74,942 (2022: £75,000), G Ordinary shares of £1 each: £75,000 (2022: £85,000) and H Ordinary shares of £1 each: £24,923 (2022: £18,693).

9. JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of financial statements, in conformity with generally accepted accounting principles, requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the directors' best knowledge of current events and actions, actual results ultimately may differ from those estimates.

The directors do not consider there to be any estimates and assumptions in connection with the preparation of the Company's year ended 31 May 2023 financial statements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities at the balance sheet date of 31 May 2023.

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

10. INTANGIBLE FIXED ASSETS
Goodwill
£   
COST
At 1 June 2022
and 31 May 2023 219,001
AMORTISATION
At 1 June 2022
and 31 May 2023 219,001
NET BOOK VALUE
At 31 May 2023 -
At 31 May 2022 -

11. TANGIBLE FIXED ASSETS
Fixtures
Land & Plant and and
buildings machinery fittings
£    £    £   
COST
At 1 June 2022 837,377 2,031,104 5,605
Additions 290,117 30,480 4,016
At 31 May 2023 1,127,494 2,061,584 9,621
DEPRECIATION
At 1 June 2022 280,589 1,537,479 5,351
Charge for year 4,948 102,978 1,057
At 31 May 2023 285,537 1,640,457 6,408
NET BOOK VALUE
At 31 May 2023 841,957 421,127 3,213
At 31 May 2022 556,788 493,625 254

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

11. TANGIBLE FIXED ASSETS - continued

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 June 2022 531,547 55,068 3,460,701
Additions 124,900 16,060 465,573
At 31 May 2023 656,447 71,128 3,926,274
DEPRECIATION
At 1 June 2022 460,787 19,464 2,303,670
Charge for year 52,270 23,707 184,960
At 31 May 2023 513,057 43,171 2,488,630
NET BOOK VALUE
At 31 May 2023 143,390 27,957 1,437,644
At 31 May 2022 70,760 35,604 1,157,031

The net book value of short leasehold land and buildings at 31 May 2023 amounted to £224,256 (2022: £224,256) and the net book value of freehold land and buildings at 31 May 2023 amounted to £617,701 (2022: £332,532).

Included in cost of land and buildings is freehold land of £532,703 (2022: £302,570) which is not depreciated. No depreciation has been charged in the year ended 31 May 2023 (2022: £NIL) against buildings because in the opinion of the directors there is no depreciable amount.

12. INVESTMENT PROPERTY
Total
£   
FAIR VALUE
At 1 June 2022
and 31 May 2023 385,341
NET BOOK VALUE
At 31 May 2023 385,341
At 31 May 2022 385,341

The fair value of the Company's investment properties at 31 May 2023 and 31 May 2022 is directors' valuation.

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

13. STOCKS
31.5.23 31.5.22
£    £   
Raw materials 61,506 55,378
Work-in-progress 35,620 -
Finished goods - 28,695
97,126 84,073

The amount of stocks recognised as an expense during the year ended 31 May 2023 amounted to £19,485,563 (2022: £14,643,177). An impairment loss of £NIL for the year ended 31 May 2023 (2022: £NIL) was recognised in cost of sales against stocks during the year due to slow moving and obsolete stocks.

14. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.5.23 31.5.22
£    £   
Trade debtors 1,713,933 1,562,715
Bad Debt Provision (32,364 ) -
Other debtors 16,919 1,000
Directors' current accounts 116 -
VAT 81,337 78,850
Prepayments and accrued income 12,761 24,574
1,792,702 1,667,139

The amount of bad and doubtful trade debtors recognised as an expense during the year ended 31 May 2023 amounted to £32,364 (2022: £NIL).

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.5.23 31.5.22
£    £   
Trade creditors 1,615,246 1,485,048
Tax 82,408 89,874
Social security and other taxes 108,696 101,342
Other creditors - 16,540
Shareholders Loan Accounts 75,116 -
Directors' current accounts 56,447 1,293
Accrued expenses 171,562 133,085
2,109,475 1,827,182

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

16. FINANCIAL INSTRUMENTS

2023 2022
£ £
Financial assets: Financial assets that are equity instruments measured at
cost less impairment

2,590,932


2,630,905

2023 2022
£ £
Financial liabilities: Financial liabilities measured at amortised cost 1,843,255 1,635,966

Financial assets measured at amortised cost comprise cash and cash equivalents and trade and other debtors.

Financial liabilities measured at amortised cost comprise trade and other creditors and accruals.

17. PROVISIONS FOR LIABILITIES
31.5.23 31.5.22
£    £   
Deferred tax 147,549 108,188

Deferred
tax
£   
Balance at 1 June 2022 108,188
Charge to Income Statement during year 39,361
Balance at 31 May 2023 147,549

The deferred tax liability is comprised solely of Accelerated Capital Allowances.

18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.5.23 31.5.22
value: £    £   
1 Ordinary £1 1 1
866 Alphabet £1 866 866
867 867

At an Extraordinary General Meeting held on 10 May 2018 the shareholders unanimously resolved that 866 of the company's issued share capital of £1 Ordinary shares be reclassified into alphabet shares.

Alphabet shares of the company at 31 May 2023 and at 31 May 2022 comprised 135 A Ordinary shares of £1 each, 297 B Ordinary shares of £1 each, 281 C Ordinary shares of £1 each, 107 D Ordinary shares of £1 each, 43 E Ordinary shares of £1 each, 1 F Ordinary share of £1, 1 G Ordinary share of £1 and 1 H Ordinary share of £1.

Bates Farms & Dairy Limited (Registered number: 00605246)

Notes to the Financial Statements - continued
for the Year Ended 31 May 2023

19. RESERVES
Capital
Retained redemption
earnings reserve Totals
£    £    £   

At 1 June 2022 2,424,104 433 2,424,537
Profit for the year 322,829 322,829
Dividends (400,000 ) (400,000 )
At 31 May 2023 2,346,933 433 2,347,366

20. PENSION COMMITMENTS

The pension charge in respect of the Company's year ended 31 May 2023 collectively amounted to £75,690 (2022: £93,234). Amounts receivable as at 31 May 2023 amounted to £3,707 (2022 payable : £14,675).

21. RELATED PARTY DISCLOSURES

At 31 May 2023 the Company owed a Company director £55,154 (2022: £1,293). Also at the year end, the Company owed Shareholders of the Company £75,000 (2022:NIL).

22. ULTIMATE CONTROLLING PARTY

The Company is under the control of the directors.