Company registration number 00475661 (England and Wales)
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
COMPANY INFORMATION
Directors
Mr J J A Clayton
Mr I J Larkins
Mr W J J Clayton
Mrs J J V Morrison
Company number
00475661
Registered office
Bury Lane
A10 Bypass
Melbourn
Royston
SG8 6GT
Auditor
Ensors Accountants LLP
Incubator 2
The Boulevard, Enterprise Campus
Alconbury Weald
Huntingdon
PE28 4XA
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 36
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The directors present the strategic report and financial statements for the year ended 30 June 2023.

Review of the business

The directors are pleased with the trading performance of the group, before any changes in property valuations ie at an operating profit level, for the year ended 30 June 2023 given the continuing extremely challenging economic environment.

Again, given the current and future expected economic uncertainty currently facing the UK and wider, we have not undertaken any significant investment in new properties or sites in the year. However, given the group's excellent liquidity, we will continue to look for investment opportunities as they arise. In addition, we are hopeful that our retail performance will remain robust, by continuing to look for opportunities to expand our retail offering, enhancing our customers experience at our locations and other opportunities for profitable growth. The group policies continue to embrace green technology where possible so long as it is financially viable.

Financially the group remains in a very strong position with a very strong balance sheet. The aim is to continue to invest a proportion of cash generated, as well as keeping enough in reserve for opportunities that arise, whilst ensuring liquidity is maintained. The group refinanced its banking facilities during the year, with new facilities in place until 2028.

Principal risks and uncertainties

The key business risk affecting the group is perceived to be the present UK economic situation and in particular the impact of consumer spending across all of it's various activities. The UK economy had suffered significant shocks over the past few years. How consumer spending will be impacted on is hard to forecast both in the medium and longer term. However, we believe the group to be well placed to manage its expenditure and its working capital requirements as it has done so over the past 12 months.

 

The group manages to identify risk by actively monitoring cash flow through the various business cycles and keeping an open dialogue with its suppliers and customers alike. The group also has long standing relationships with its key supply chain, as well as maintaining its ability to manufacture several product lines itself. It strives to manage its borrowings carefully and responsibly, and this measured approach ensures that an appropriate amount of financial facilities are available to the group in order to maintain current activities as well as finance future growth plans adequately.

 

Key performance indicators

The board uses a number of financial and non-financial key performance indicators (KPI's) to monitor the success of the business. All KPI's are monitored on a regular basis and compared to budget when applicable. The principal KPI's are:

 

Financial

On behalf of the board

Mr W J J Clayton
Director
22 February 2024
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -

The directors present their annual report and financial statements for the year ended 30 June 2023.

Principal activities

The principal activities of the company and its subsidiary were that of retailing, farming, flower growing, property management and bakery. The subsidiary Bury Lane Bakery ceased trading on 12 May 2023.

Results and dividends

The results for the year are set out on page 8.

Dividends of £nil (2022 - £0.8) per ordinary share were declared in the year.

Preference dividends were paid amounting to £300000.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J J A Clayton
Mrs J J Clayton
(Resigned 13 July 2022)
Mr I J Larkins
Mr S D Ward
(Resigned 30 November 2022)
Mr W J J Clayton
Mrs J J V Morrison
Financial instruments
Treasury operations and financial instruments

The group uses various financial instruments; these include cash, bank overdrafts, loans and various items such as trade debtors and trade creditors that arise directly from its operations.

 

The existence of these financial instruments exposes the group to a number of financial risks, with the main risks being liquidity risk, interest rate risk and credit risk. The directors review and agree policies for managing these risks, which are summarised below.

Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the businesses.

Interest rate risk

The group uses significant insurance to manage its exposure to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must be approved by the Board.

 

The principle credit risk lies within trade debtors. In order to manage credit risk the directors set limits for major customers based on a combination of payment history and references.Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Auditor

In accordance with the company's articles, a resolution proposing that Ensors Accountants LLP be reappointed as auditor of the group will be put at a General Meeting.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
Mr W J J Clayton
Director
22 February 2024
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
- 5 -
Opinion

We have audited the financial statements of E W Pepper Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent 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 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:

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

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 parent 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 parent 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

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.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
- 7 -

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 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.

James Francis (Senior Statutory Auditor)
For and on behalf of Ensors Accountants LLP
22 February 2024
Chartered Accountants
Statutory Auditor
Incubator 2
The Boulevard, Enterprise Campus
Alconbury Weald
Huntingdon
PE28 4XA
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,364,744
9,596,784
Cost of sales
(4,076,940)
(3,822,515)
Gross profit
5,287,804
5,774,269
Administrative expenses
(4,812,490)
(4,387,952)
Other operating income
172,844
43,875
Operating profit
4
648,158
1,430,192
Interest receivable and similar income
8
1,402
47
Interest payable and similar expenses
9
(157,797)
(122,616)
Amounts written off investments
10
(119,748)
-
Fair value gains and losses on investment properties
15
(1,040,000)
(468,359)
(Loss)/profit before taxation
(667,985)
839,264
Tax on (loss)/profit
11
142,259
(255,867)
(Loss)/profit for the financial year
(525,726)
583,397
(Loss)/profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -
2023
2022
£
£
(Loss)/profit for the year
(525,726)
583,397
Other comprehensive income
-
-
Total comprehensive income for the year
(525,726)
583,397
Total comprehensive income for the year is all attributable to the owners of the parent company.
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
GROUP BALANCE SHEET
AS AT 30 JUNE 2023
30 June 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
13
-
0
3,958
Tangible assets
14
5,530,382
5,976,176
Investment properties
15
36,335,162
37,375,162
Investments
16
843,067
843,067
42,708,611
44,198,363
Current assets
Stocks
18
1,582,166
1,699,403
Debtors
19
1,147,498
935,194
Cash at bank and in hand
332,936
1,029,232
3,062,600
3,663,829
Creditors: amounts falling due within one year
20
(2,872,226)
(5,325,538)
Net current assets/(liabilities)
190,374
(1,661,709)
Total assets less current liabilities
42,898,985
42,536,654
Creditors: amounts falling due after more than one year
21
(1,500,000)
-
Provisions for liabilities
23
(2,895,979)
(3,207,922)
Net assets
38,503,006
39,328,732
Capital and reserves
Called up share capital
25
187,500
187,500
Capital redemption reserve
62,500
62,500
Profit and loss reserves
38,253,006
39,078,732
Total equity
38,503,006
39,328,732
The financial statements were approved by the board of directors and authorised for issue on 22 February 2024 and are signed on its behalf by:
22 February 2024
Mr W J J Clayton
Director
Company Registration No. 00475661
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
COMPANY BALANCE SHEET
AS AT 30 JUNE 2023
30 June 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
14
5,530,382
5,877,085
Investment property
15
36,335,162
37,375,162
Investments
16
1,108,930
1,108,930
42,974,474
44,361,177
Current assets
Stocks
18
1,582,166
1,673,520
Debtors
19
1,143,449
893,571
Cash at bank and in hand
326,104
946,117
3,051,719
3,513,208
Creditors: amounts falling due within one year
20
(3,442,924)
(5,765,404)
Net current liabilities
(391,205)
(2,252,196)
Total assets less current liabilities
42,583,269
42,108,981
Creditors: amounts falling due after more than one year
21
(1,500,000)
-
Provisions for liabilities
Deferred tax liability
23
2,895,979
3,202,586
(2,895,979)
(3,202,586)
Net assets
38,187,290
38,906,395
Capital and reserves
Called up share capital
25
187,500
187,500
Capital redemption reserve
62,500
62,500
Profit and loss reserves
37,937,290
38,656,395
Total equity
38,187,290
38,906,395

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £419,106 (2022 - £544,475 profit).

The financial statements were approved by the board of directors and authorised for issue on 22 February 2024 and are signed on its behalf by:
22 February 2024
Mr W J J Clayton
Director
Company registration number 00475661 (England and Wales)
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2021
187,500
62,500
38,645,335
38,895,335
Year ended 30 June 2022:
Profit and total comprehensive income
-
-
583,397
583,397
Dividends
12
-
-
(150,000)
(150,000)
Balance at 30 June 2022
187,500
62,500
39,078,732
39,328,732
Year ended 30 June 2023:
Loss and total comprehensive income
-
-
(525,726)
(525,726)
Dividends
12
-
-
(300,000)
(300,000)
Balance at 30 June 2023
187,500
62,500
38,253,006
38,503,006
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 13 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2021
187,500
62,500
38,261,920
38,511,920
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
-
544,475
544,475
Dividends
12
-
-
(150,000)
(150,000)
Balance at 30 June 2022
187,500
62,500
38,656,395
38,906,395
Year ended 30 June 2023:
Profit and total comprehensive income
-
-
(419,105)
(419,105)
Dividends
12
-
-
(300,000)
(300,000)
Balance at 30 June 2023
187,500
62,500
37,937,290
38,187,290
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
32
1,461,647
1,655,165
Interest paid
(157,797)
(122,616)
Income taxes paid
(345,286)
(397,675)
Net cash inflow from operating activities
958,564
1,134,874
Investing activities
Purchase of tangible fixed assets
(349,496)
(256,774)
Proceeds from disposal of tangible fixed assets
115,370
125,309
Proceeds from disposal of investment property
-
268,070
Purchase of investments
-
(100,000)
Proceeds from disposal of investments
-
267,895
Repayment of loans
(119,748)
-
Interest received
1,402
47
Net cash (used in)/generated from investing activities
(352,472)
304,547
Financing activities
Repayment of bank loans
(1,000,000)
(1,250,000)
Dividends paid to equity shareholders
(300,000)
(150,000)
Net cash used in financing activities
(1,300,000)
(1,400,000)
Net (decrease)/increase in cash and cash equivalents
(693,908)
39,421
Cash and cash equivalents at beginning of year
1,026,844
987,423
Cash and cash equivalents at end of year
332,936
1,026,844
Relating to:
Cash at bank and in hand
332,936
1,029,232
Bank overdrafts included in creditors payable within one year
-
(2,388)
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
1,631,449
1,637,639
Interest paid
(157,797)
(122,616)
Income taxes paid
(345,286)
(389,313)
Net cash inflow from operating activities
1,128,366
1,125,710
Investing activities
Purchase of tangible fixed assets
(347,620)
(250,340)
Proceeds from disposal of tangible fixed assets
19,975
122,959
Proceeds from disposal of investment property
-
0
268,070
Purchase of investments
-
0
(100,000)
Proceeds from disposal of investments
-
0
267,895
Repayment of loans
(119,748)
-
0
Interest received
1,402
47
Net cash (used in)/generated from investing activities
(445,991)
308,631
Financing activities
Repayment of bank loans
(1,000,000)
(1,250,000)
Dividends paid to equity shareholders
(300,000)
(150,000)
Net cash used in financing activities
(1,300,000)
(1,400,000)
Net (decrease)/increase in cash and cash equivalents
(617,625)
34,341
Cash and cash equivalents at beginning of year
943,729
909,388
Cash and cash equivalents at end of year
326,104
943,729
Relating to:
Cash at bank and in hand
326,104
946,117
Bank overdrafts included in creditors payable within one year
-
(2,388)
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
1
Accounting policies
Company information

E W Pepper Limited (“the company”) is a limited company domiciled and incorporated in England and Wales. The registered office is Orchard House, Bury Lane, Melbourn, Royston, SG8 6DF.

 

The group consists of E W Pepper Limited and all of its subsidiaries.

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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated financial statements incorporate those of E W Pepper Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 17 -

Bury Lane Bakery Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Bury Lane Bakery Limited for the period from its acquisition. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

 

The group profit and loss account and statement of cash flows also include the results and cash flows of Bury Lane Bakery Limited for the twelve month period ended 30 June 2023.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

1.5
Turnover

Turnover represents the amount derived from ordinary activities, and is stated gross of VAT and trade discounts. Turnover is measured at the fair value of the consideration due, and is derived from three primary sources:

 

1. Sale of goods

Revenue from the sale of goods is recognised on despatch.

 

2. Sale of services

Revenue from services provided by the group is recognised when the group has performed its obligations and in exchange obtained the right to consideration. Amounts received in advance of the provision of services are included within deferred income.

 

3. Rental income

Rental income from operating leases is recognised on a straight-line basis over the term of the lease. The aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line basis.

1.6
Intangible fixed assets - goodwill

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 10 years.

1.7
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 Freehold
4-25% straight line
Plant and machinery
4-33% straight line & some reducing balance
Fixtures, fittings & equipment
4-33% straight line & some reducing balance
Motor vehicles
25% straight line

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 recognised in the profit and loss account.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 18 -
1.8
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.10
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 19 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
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.

1.12
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.

1.13
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

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 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.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 20 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 current 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.

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 group 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.

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 group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 payments 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.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 21 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

1.15
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.16
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 22 -
Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different to those in which they are recognised in the financial statements.

 

Deferred tax assets are recognised only to the extent that the directors consider it more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

 

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

1.17
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.

1.18
Retirement benefits

The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.

1.19
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.

1.20
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 23 -
1.21

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

 

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classified as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss accounts. Finance costs are calculated so as to produce a constant rate of return of the outstanding liability.

 

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classified as an equity instrument. Dividends and distributions relating to equity instruments are debited directly to equity.

1.22

Single farm payment

Single farm payments are receivable on a calendar year basis, having begun 1 January 2005. The annual payment only becomes receivable once the occupation and compliance conditions are satisfied. No income is recognised until this occurs. Once the compliance period is complete, the income is recognised in full.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

 

Investment property valuation

The company revalues its investment properties on an annual basis. The residential properties are professionally valued by a firm of surveyors and the commercial properties are valued by the directors.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Retail
5,734,789
5,671,465
Farming
293,942
208,619
Flower growing
1,240,062
1,362,282
Property management
2,042,560
1,871,968
Fishing income
53,391
37,450
Property development
-
445,000
9,364,744
9,596,784
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
3
Turnover and other revenue
(Continued)
- 24 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
9,364,744
9,596,784
2023
2022
£
£
Other revenue
Interest income
1,402
47
Grants received
33,758
40,284
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(699)
4,504
Government grants
(33,758)
(40,284)
Depreciation of owned tangible fixed assets
699,895
755,699
Profit on disposal of tangible fixed assets
(19,975)
(98,762)
Amortisation of intangible assets
3,958
11,500
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
13,750
12,500
Audit of the financial statements of the company's subsidiaries
2,750
2,500
16,500
15,000
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Production staff
124
112
115
102
Management staff
8
9
7
8
Total
132
121
122
110
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
6
Employees
(Continued)
- 25 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
2,421,413
2,249,687
2,154,588
2,033,449
Social security costs
186,835
185,290
186,835
185,290
Pension costs
44,462
41,197
44,462
41,197
2,652,710
2,476,174
2,385,885
2,259,936
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
255,545
394,124

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
113,861
102,320
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
1,402
47
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
126,195
117,718
Other interest on financial liabilities
29,271
-
155,466
117,718
Other finance costs:
Other interest
2,331
4,898
Total finance costs
157,797
122,616
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 26 -
10
Amounts written off investments
2023
2022
£
£
Amounts written off current loans
(119,748)
-
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
169,684
305,979
Deferred tax
Origination and reversal of timing differences
(311,943)
(50,112)
Total tax (credit)/charge
(142,259)
255,867

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(667,985)
839,264
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
(136,909)
159,460
Tax effect of expenses that are not deductible in determining taxable profit
226,178
105,548
Tax effect of income not taxable in determining taxable profit
(9,791)
(10,339)
Effect of change in corporation tax rate
(55,240)
(12,720)
Permanent capital allowances in excess of depreciation
49,069
32,459
Chargeable gains
(216,300)
(18,541)
Deferred tax not recognised
734
-
0
Taxation (credit)/charge
(142,259)
255,867
12
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
-
150,000
Interim paid
300,000
-
300,000
150,000

Preference dividends of £300,000 (2022 - Ordinary dividends of £150,000) were declared in the year.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 27 -
13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 July 2022
115,000
Disposals
(115,000)
At 30 June 2023
-
0
Amortisation and impairment
At 1 July 2022
111,042
Amortisation charged for the year
3,958
Disposals
(115,000)
At 30 June 2023
-
0
Carrying amount
At 30 June 2023
-
0
At 30 June 2022
3,958
The company had no intangible fixed assets at 30 June 2023 or 30 June 2022.

Goodwill represents the difference between the acquisition cost of The Bury Farm Bakery trade and assets, 100% of which were acquired by Bury Lane Bakery Limited on 26 October 2012 and the fair value of the identifiable net assets of The Bury Farm Bakery at this date. On 26 October 2012 tangible fixed assets with a value of £20,000 and stock with a value of £10,000 were acquired for a consideration of £145,000.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 28 -
14
Tangible fixed assets
Group
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2022
5,614,547
7,110,373
3,579
26,123
12,754,622
Additions
191,093
158,403
-
0
-
0
349,496
Disposals
(78,066)
(159,646)
(3,579)
(26,123)
(267,414)
At 30 June 2023
5,727,574
7,109,130
-
0
-
0
12,836,704
Depreciation and impairment
At 1 July 2022
2,118,701
4,630,301
3,321
26,123
6,778,446
Depreciation charged in the year
245,634
454,198
63
-
0
699,895
Eliminated in respect of disposals
(28,088)
(114,424)
(3,384)
(26,123)
(172,019)
At 30 June 2023
2,336,247
4,970,075
-
0
-
0
7,306,322
Carrying amount
At 30 June 2023
3,391,327
2,139,055
-
0
-
0
5,530,382
At 30 June 2022
3,495,846
2,480,072
258
-
0
5,976,176
Company
Land and buildings Freehold
Plant and machinery
Total
£
£
£
Cost
At 1 July 2022
5,536,481
6,978,439
12,514,920
Additions
191,093
156,527
347,620
Disposals
-
0
(25,836)
(25,836)
At 30 June 2023
5,727,574
7,109,130
12,836,704
Depreciation and impairment
At 1 July 2022
2,093,736
4,544,099
6,637,835
Depreciation charged in the year
242,511
451,812
694,323
Eliminated in respect of disposals
-
0
(25,836)
(25,836)
At 30 June 2023
2,336,247
4,970,075
7,306,322
Carrying amount
At 30 June 2023
3,391,327
2,139,055
5,530,382
At 30 June 2022
3,442,745
2,434,340
5,877,085

Included in land & buildings is freehold land at a cost of £106,383 (2022 - £106,383) which is not depreciated.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 29 -
15
Investment property
Group
Company
2023
2023
£
£
Fair value
At 30 June 2023
37,375,162
37,375,162
Net gains or losses through fair value adjustments
(1,040,000)
(1,040,000)
At 30 June 2023
36,335,162
36,335,162

Investment property comprises residential and commercial properties. The fair value of the investment property has been arrived at on the basis of a valuation carried out at 30 June 2023 by the directors. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

16
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
17
-
0
-
0
265,863
265,863
Unlisted investments
843,067
843,067
843,067
843,067
843,067
843,067
1,108,930
1,108,930
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 July 2022 and 30 June 2023
843,067
Carrying amount
At 30 June 2023
843,067
At 30 June 2022
843,067
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 July 2022 and 30 June 2023
265,863
843,067
1,108,930
Carrying amount
At 30 June 2023
265,863
843,067
1,108,930
At 30 June 2022
265,863
843,067
1,108,930
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 30 -
17
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Bury Lane Bakery Limited
England
Ordinary
100.00
18
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
35,000
60,883
35,000
35,000
Work in progress
22,248
124,849
22,248
124,849
Finished goods and goods for resale
1,524,918
1,513,671
1,524,918
1,513,671
1,582,166
1,699,403
1,582,166
1,673,520
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,005,529
896,695
1,003,456
857,694
Corporation tax recoverable
27,985
-
0
27,985
-
0
Other debtors
4,337
4,773
2,361
2,614
Prepayments and accrued income
109,647
33,726
109,647
33,263
1,147,498
935,194
1,143,449
893,571
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
22
-
0
2,502,388
-
0
2,502,388
Trade creditors
933,509
771,318
932,921
750,212
Amounts owed to group undertakings
-
0
-
0
598,014
491,660
Corporation tax payable
-
0
147,617
-
0
147,617
Other taxation and social security
277,287
254,718
260,542
228,502
Other creditors
1,540,918
1,541,228
1,542,319
1,542,537
Accruals and deferred income
120,512
108,269
109,128
102,488
2,872,226
5,325,538
3,442,924
5,765,404
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 31 -
21
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
22
1,500,000
-
0
1,500,000
-
0
22
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,500,000
2,500,000
1,500,000
2,500,000
Bank overdrafts
-
0
2,388
-
0
2,388
1,500,000
2,502,388
1,500,000
2,502,388
Payable within one year
-
0
2,502,388
-
0
2,502,388
Payable after one year
1,500,000
-
0
1,500,000
-
0

The long-term loan is secured by a fixed and floating charge over the assets of the group.

The loan is subject to quarterly interest and is repayable on 31 March 2028.

23
Deferred taxation

Deferred tax assets and liabilities are offset where the group or 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
Group
£
£
Accelerated capital allowances
429,115
478,557
Investment property
2,466,864
2,729,365
2,895,979
3,207,922
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
429,115
473,221
Investment property
2,466,864
2,729,365
2,895,979
3,202,586
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
23
Deferred taxation
(Continued)
- 32 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 July 2022
3,207,922
3,202,586
Credit to profit or loss
311,943
306,607
Liability at 30 June 2023
2,895,979
2,895,979

The deferred tax liability set out above that is expected to reverse within 36 months is that relating to accelerated capital allowances that are expected to mature within the same period. That relating to investment properties will reverse on the disposal of the properties.

 

 

24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
44,462
41,197

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

25
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
173,779
187,500
173,779
187,500
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference shares of £1 each
13,721
-
13,721
-
Preference shares classified as equity
13,721
-
Total equity share capital
187,500
187,500
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
25
Share capital
(Continued)
- 33 -

During the year ended 30 June 2023, 13,721 of £1 ordinary shares were converted to 13,731 of £1 preference shares.

 

The ordinary shares have full voting rights attached with equal rights to dividends and distributions with no rights of redemption.

The preference shares have no right to attend, or vote, at any general meeting of the company or on any written resolution proposed to be passed by the company.

 

26
Retained earnings

Included within retained earnings are non distributable reserves of £19,051,424 (2022 - £20,091,424).

27
Operating lease commitments

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
12,550
25,804
12,550
25,804
Between two and five years
-
2,625
-
2,625
12,550
28,429
12,550
28,429
Lessor

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
1,192,674
1,356,485
1,192,674
1,356,485
Between two and five years
1,161,510
1,201,817
1,161,510
1,201,817
In over five years
-
46,667
-
46,667
2,354,184
2,604,969
2,354,184
2,604,969
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 34 -
28
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Company
Entities over which the company has control, joint control or significant influence
191,421
152,167
215,680
95,157

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Entities over which the group has control, joint control or significant influence
1,438,599
1,442,115
Company
Entities over which the company has control, joint control or significant influence
1,438,599
1,442,115

The company has an investment of £732,067 in Pigeon Capital Management Limited. A director is interested in the transaction by virtue of his directorship in Pigeon Capital Management Limited.

29
Events after the reporting date

In the post year end period preference dividends of £175,000 have been declared.

30
Directors' transactions

At 30 June 2023 Mr J J A Clayton was owed £34,678 (2022 - £48,165), Mrs J J Clayton was owed £2,556 (2022 - £4,880), Mr W J J Clayton was owed £nil (2022 - £nil) and Ms J J V Morrison was owed £nil (2022 - £nil) in respect of loans they had made to the company. The loans are interest free and repayable on demand.

 

During the year Geb & Green Limited (a connected company by virtue of the common Directorship of WJJ Clayton), charged EW Pepper Limited the sum of £138,148 (2022 - £nil) and reimbursed the sum of £900 (2022 - £nil) in relation to the marketing activities of house plants that were being cultivated within EW Pepper Limited. In addition, all sums advanced were on an informal loan basis (not attracting interest) and £119,748 was written off during the year under review.

 

Dividends totalling £300,000 (2022- £150,000) were paid in the year in respect of shares held by the company's directors.

E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 35 -
31
Controlling party

In the previous year, the company was controlled by the director, Mr J J A Clayton, by virtue of his controlling shareholding.

 

During the year, control of the company changed to Mr W J J Clayton, by virtue of his controlling shareholding.

 

32
Cash generated from group operations
2023
2022
£
£
(Loss)/profit for the year after tax
(525,726)
583,397
Adjustments for:
Taxation (credited)/charged
(142,259)
255,867
Finance costs
157,797
122,616
Investment income
(1,402)
(47)
Gain on disposal of tangible fixed assets
(19,975)
(98,762)
Fair value loss on investment properties
1,040,000
468,359
Amortisation and impairment of intangible assets
3,958
11,500
Depreciation and impairment of tangible fixed assets
699,895
755,699
Other gains and losses
119,748
-
Movements in working capital:
Decrease/(increase) in stocks
117,237
(85,485)
Increase in debtors
(184,319)
(41,892)
Increase/(decrease) in creditors
196,693
(316,087)
Cash generated from operations
1,461,647
1,655,165
E W PEPPER LIMITED AND SUBSIDIARY UNDERTAKING
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 36 -
33
Cash generated from operations - company
2023
2022
£
£
(Loss)/profit for the year after tax
(419,105)
544,475
Adjustments for:
Taxation (credited)/charged
(136,923)
244,613
Finance costs
157,797
122,616
Investment income
(1,402)
(47)
Gain on disposal of tangible fixed assets
(19,975)
(98,762)
Fair value loss on investment properties
1,040,000
468,359
Depreciation and impairment of tangible fixed assets
694,323
749,664
Other gains and losses
119,748
-
Movements in working capital:
Decrease/(increase) in stocks
91,354
(83,018)
Increase in debtors
(221,893)
(34,971)
Increase/(decrease) in creditors
327,525
(275,290)
Cash generated from operations
1,631,449
1,637,639
34
Analysis of changes in net debt - group
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
1,029,232
(696,296)
332,936
Bank overdrafts
(2,388)
2,388
-
0
1,026,844
(693,908)
332,936
Borrowings excluding overdrafts
(2,500,000)
1,000,000
(1,500,000)
(1,473,156)
306,092
(1,167,064)
35
Analysis of changes in net debt - company
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
946,117
(620,013)
326,104
Bank overdrafts
(2,388)
2,388
-
0
943,729
(617,625)
326,104
Borrowings excluding overdrafts
(2,500,000)
1,000,000
(1,500,000)
(1,556,271)
382,375
(1,173,896)
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