Company registration number 11153598 (England and Wales)
STONEGATE FOOD GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
STONEGATE FOOD GROUP LIMITED
COMPANY INFORMATION
Director
Mr A D Gott
Secretary
Mr S G Morse
Company number
11153598
Registered office
Lacock Green
Corsham Road
Lacock
Chippenham
SN15 2LZ
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
STONEGATE FOOD GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 5
Director's report
6 - 10
Director's responsibilities statement
11
Independent auditor's report
12 - 14
Group statement of comprehensive income
15
Group balance sheet
16
Company balance sheet
17
Group statement of changes in equity
18
Company statement of changes in equity
19
Group statement of cash flows
20
Notes to the financial statements
21 - 48
STONEGATE FOOD GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -

The director presents the strategic report for the year ended 30 September 2023.

 

Principal activity

The principal activity of the company was the holding of investments in a trading Group.

 

The principal activities of the Group continued to be that of free range and organic poultry farming for the production of eggs, along with the packing, marketing and sale of eggs and egg related products.

 

The Group works closely with producers to collect, grade and package free range and organic eggs. We deliver daily from hen houses right across the country to many of the UK's leading supermarkets and to the most exclusive restaurants, as well as first class egg products to some of the biggest names in food manufacturing.

 

Every discerning consumer who purchases our eggs has peace of mind in knowing they are produced in the UK to the rigorous BEIC "British Lion" quality standard. By working in collaboration with our producers, wholesalers and top retailers, we can rapidly identify and satisfy the ever-changing demands of those consumers.

Review of the business

The Group experienced turnover growth of 23% in the period to £195.6m (2022: £158.8m). Operating profit was £4.8m (2022: £1.0m), profitability improved as commodity inflation pressures eased combined with lower availability of eggs in the UK. The director considers the Group to be in a strong financial position given net assets of £12.3m as of 30 September 2023 (2022: £9.5m).

 

The Group will continue to strengthen the business through the development and evolution of high-quality core products focused on our customers' needs. Investment will continue in equipment and technology at the primary packing site.

 

During the year, the Group has continued to invest in its grading capabilities. The Group has also continued to invest in its new egg processing facility to provide customers and consumers with a wider range of products to meet their requirements.

 

The Group continues to support and invest in its supply chain focusing on providing a competitive, sustainable model for the long term. Within the competitive marketplace in which we operate, we face the constant challenge of being both adaptive and reactive to market price changes such as feed prices.

 

Throughout the year, the Group has continued to invest in staff at all levels, which we believe to be important, not least for the productivity gains that result.

STONEGATE FOOD GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Principal risks and uncertainties

We have a long and strong relationship with our customers, working together to ensure the end consumer demands, both now and in the future, can be met and often exceeded. We continue to monitor market trends across egg types and sizes to ensure we have the right mix to meet customer demand.

 

Raw Material Risk

The volatility of commodity prices, particularly wheat, is a constant challenge for the Group. In addition to reviewing the market trends we work with both our suppliers and customers to minimise the impact to any one party.

 

Supply Risk

The risk to supply of egg has continued in the year with the impact of the Russia-Ukraine war on costs, and the increasing impact of Avian Influenza on the UK laying flock. Producers have felt cost increases in all aspects of their business, encompassing feed, energy, labour, transportation and in respect of new investment cost of materials and cost to raise finance. These have all compounded to impact the willingness of producers to invest in new infrastructure to house new free range or organic flocks, and with the impending move away from caged egg by retailers this is putting pressure on the supply of egg.

 

The Group works closely with its producer base and is proactive in passing through price increases in partnership with our strategic retailers to ensure our supply base has a viable business to continue as long-term partners to us and our retailers.

 

The Group holds our own farms and those of our producers to the highest standards of biosecurity to mitigate the risk of Avian Influenza. The Group has insurance in place specifically against the risk of our own farms being directly impacted by Avian Influenza.

 

Health & Safety Risk

Employee safety remains paramount in our day-to-day activities. The Group ensures that regular, thorough reviews of the workplace are carried out with any relevant actions taken to provide a safe working environment for all our employees. In addition to our own reviews the Group engages with third parties to provide an independent review.

 

Cash flow Risk

The Group has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of debt finance and related finance costs. The Group does not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting is applied.

 

Given the size of the Group, the director has not delegated the responsibility of monitoring financial risk management to a sub-committee of the Senior management team. The policies set by the Senior management team are implemented by the Group's finance department.

 

The director will revisit the appropriateness of this policy should the Group's operations change in size or nature.

STONEGATE FOOD GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
Principal risks and uncertainties (continued)

 

Credit Risk

The Group's principal financial assets are bank balances and cash, trade and other receivables, and investments.

 

The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

 

Trade debtors are managed in respect of credit and cash flow by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

 

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

 

Liquidity Risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Group uses a mixture of longer-term asset finance and short-term debt finance.

 

Market Risk

The Group recognises the risk of competition in a highly active market. Through investment in our products, genetics, facilities, and people we aim to meet or exceed the demands of our customers and the consumer. Being a 100% free range and organic operation, and so having long removed ourselves from caged and barn egg production, the business is less at risk from consumer and retail pressure against intensive egg production associated with lower welfare standards.

Key performance indicators

Given the straightforward nature of the Group's operations, the director is of the opinion that analysis using KPIs other than the financial results, is not necessary for an understanding of the development, performance or position of the business.

STONEGATE FOOD GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 4 -
Health, safety and environment

The key focus of the business continues to be health, safety, quality, and the environment.

 

Our policies aim to provide and support a culture where health, safety, quality, and the environment are consistently on our agenda. This has been achieved by ensuring that our team receive adequate training and feel empowered to raise any concerns that they may have.

 

From the Food Quality Management System perspective, we are accredited against the British Retail Consortium (Global Food Safety Initiative) rather than following ISO9001. Our current BRC grade is AA+ for shell egg and AA+ for the convenience foods sites. The scope of these accreditations is as follows:

 

Shell Egg

Grading and packing, of hen, goose, ostrich, pheasant, quail, duck, emu, turkey, rhea, and guinea fowl eggs. Packing into pulp or plastic cartons. Separation of shell from eggs and harvesting the liquid for filtering and chilling <4% for further processing.

 

Convenience Foods

The cooking (boiling) cooling, shelling of hen and quail’s eggs, the blending of sandwich fillings, assembly of hen and quail eggs with and without value-added components or brine into MAP, Non-MAP, bulk buckets and bags. The poaching, pasteurisation of egg products packed into plastic film lidded trays. The breaking, pasteurisation of liquid egg with and without additions pre and post pasteurisation, packed into bags, retail cartons and pouches. The filling of Raw egg whites into bags.

 

Both Sites are also accredited against the BEIC (British Egg Industry Council) Lion Code, RSPCA (Royal Society for The Prevention of Cruelty to Animals) and Organic Food Standards with both Organic Farmers and Growers and Soil Association.

 

Stonegate Farmers are also member of Campden BRI Food Research Organisation and the Chilled Foods Association.

S172 statement

This statement by the director describes how the responsibilities under s172 (1) (a) to (f) of the Companies Act 2006 have been approached.

 

The director:

STONEGATE FOOD GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 5 -

The fundamental principle in the governance of the Group is the clear, fair, and trusting approach to all interactions with employees, clients, and suppliers; this is reflected in the length of service of employees and management teams and the longevity of the relationships with our clients and suppliers.

 

The Group's employees, clients and suppliers are critical to the success of the business and so it is recognised that engagement is an important aspect in those relationships.

 

The Group has an equal opportunities policy and is committed to the principles within the policy in respect of all stakeholders.

 

The Group has built, and continues to grow, the business on a reputation for delivering excellent customer service. The Group, through the senior management team and employees, strives continuously to improve in every aspect of the products and services it provides, for the mutual benefit of all stakeholders.

 

The director, supported by the senior management team, has overall responsibility for delivering the Group's strategy and values and for ensuring high standards of governance. The primary aim of the director is to promote the long-term sustainable success of the Group to generate benefit for the stakeholders.

On behalf of the board

Mr A D Gott
Director
28 March 2024
STONEGATE FOOD GROUP LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 6 -

The director presents his annual report and financial statements for the year ended 30 September 2023.

Principal activities

The principal activity of the company as the holding of investments in a trading Group.

 

The principal activities of the Group continued to be that of free range and organic poultry farming for the production of eggs along with packing, marketing and sale of free range, organic eggs and egg products.

Results and dividends

The results for the year are set out on page 15.

Ordinary dividends were paid amounting to £152,400. The director does not recommend payment of a further dividend.

Director

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

Mr A D Gott
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The director recognises that the future success of the business is highly dependent upon the loyalty, skills and motivation of group's employees and, therefore, encourages the supply of information on the progress of their business unit and the group as a whole. Employee participation in improving the efficiency of the business is actively sought at all levels through regular meetings. The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Future developments

The Group will continue to strengthen the business through the development and evolution of high-quality core products focussed on our customers' needs. Investment will continue in equipment and technology at the primary packing site and a new egg processing facility.

Auditor

The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

STONEGATE FOOD GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 7 -
Energy and carbon report
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
3,945,349
3,606,951
- Electricity purchased
5,191,010
3,941,980
- Fuel consumed for transport
16,538,762
16,917,949
25,675,121
24,466,880
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
1,116.00
1,020.00
- Fuel consumed for owned transport
4,373.00
4,473.00
5,489.00
5,493.00
Scope 2 - indirect emissions
- Electricity purchased
-
-
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
67.00
71.00
Total gross emissions
5,556.00
5,564.00
Intensity ratio
Tonnes CO2e per 100,000 eggs sold
0.60
0.58
Quantification and reporting methodology

Utilities - invoices from electricity and gas suppliers were provided, with energy consumption expressed in kilowatt hours. Emissions were calculated using a representative average mix.

 

Use of fuel for transport - fuel consumption by Group owned and long-term hire vehicles is recorded by fuel cards and bunker drawings and is expressed in litres. One litre of diesel corresponds to 2.68kg of CO2. Short term hire vehicles are excluded.

 

Emissions from business travel in company cars and employee-owned vehicles – car mileage is recorded in employee expense claims. Petrol cars are assumed to average 36mpg, diesel, 43mpg and hybrid 59mpg. One litre of diesel corresponds to 2.68kg of CO2 and one litre of petrol corresponds to 2.31kgs of CO2.

Intensity measurement

The group also uses the following intensity measurement:

kWH per 100,000 eggs sold – 2,779 (2022: 2,552)

STONEGATE FOOD GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
Measures taken to improve energy efficiency

 

General

Whilst the figures disclosed above show increased energy consumption compared to the prior year, this reflects increased activity by the Group overall, and also the growth of processed egg operations. The Group has attempted to control such increases and minimise energy consumption as outlined below.

 

In 2016 the Group invested in renewable energy with the introduction of solar capture at its main site in Lacock and on one of our own farm sites. In 2021 Solar panels have also been installed at a further three of our own farm sites. This process continued in 2023 with further solar capture at its main site in Lacock in 2023.

 

Where electricity is required from external sources the Group buys 100% zero carbon electricity from

renewable generation.

 

Power saving remains a key part of our environmental strategy, from employee awareness and engagement to the type of equipment we purchase.

 

We monitor usage across all sites to allow us to better understand when and how power is being consumed.

 

Where we are purchasing new or replacement equipment, we focus on energy efficiency and sustainability.

 

Voltage optimisation helps protect equipment by reducing heat and vibration and allows demand to be better managed.

 

Transport Fuels

The Group continue to operate a fleet of Volvo Tractor and Rigid motive units, the Rigid fleet was replaced in 2023 and replacement tractor units are due for delivery in early 2024. The Volvo tractor and Rigid units were selected primarily for their good fuel economy and monitoring technology.

 

To further minimise fuel consumption the Group regularly reviews vehicle routing and utilisation, using forward forecasts of eggs available for collection from farms to optimise load fill. The Group actively reviews load fill and seeks to obtain back haul work to improve efficiency. Drivers are regularly monitored and assessed for their driving style to aid fuel economy and to reduce wear & tear on vehicles. The Group employ a driver trainer to facilitate continued driving style improvement.

 

The Group continues to operate a fleet of 12 Mercedes sprinter vans for customer deliveries in London and the surrounding areas. The group is reviewing this operation with third party distributors in order to reduce the environmental impact of these deliveries.

 

Staff and visitors to the Lacock site can take advantage of charging facilities for electric cars, HGV trailers and the current van fleet can also run box fridges on electric plug points.

 

Longer term, the Group are in collaboration with Volvo Head office to identify a gas or alternative fuel vehicle that can operate effectively for Stonegate operation. The vison is to operate a fleet of gas or alternative fuel vehicle by 2028.

STONEGATE FOOD GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
Measures taken to improve energy efficiency (continued)

 

Waste

The principal objective for waste management is to minimise the production of waste. However, where waste is created the Group ensures waste products are fully recycled where possible. The Group uses wastewater capture for vehicle washing.

 

Raw material waste is minimised through the efficient capture and processing of damaged items. Where damaged product cannot be used for human consumption, it is collected and sold for animal consumption or energy production.

 

In 2023 the Group started construction of on-site waste water treatment facilities at the disposal of the Group which when completed in 2024 will allow all the Group’s waste water to be treated on site and safely discharged to the water course in compliance with Environment Agency regulations. This will have the added benefit of removing the need for third party companies to come on site and remove waste water in tankers, thus reducing the number of miles on the road associated with the discharge of waste water by the business.

 

Farming

Stonegate’s farming estates comprise Group-owned and independent privately owned facilities; farms of different size and layout, some built recently, others as much as 25 years old. All our farms operate to the same high consumer expectation, which is to say that every animal under our umbrella, directly or indirectly, is expected to lead a good life, cared for by empathetic and responsible farmers.

 

The RSPCA Assured and Lion Code provide the backbone of farm assurance, covering aspects of bird welfare, traceability, food hygiene and good agricultural practice. Independent auditors assigned by these certifying bodies inspect farms each year, and issue conformity documents to allow farms to participate in our marketplace. 100% of Stonegate’s production is accredited to both RSPCA Assured and Lion Code of Practice. Every hen has access to a defined outdoor area every day, and the RSPCA’s five freedoms of good animal welfare are strictly observed: freedom from hunger and thirst, discomfort, pain or disease, fear and distress and free to express natural behaviour.

 

Stonegate have long served some of the nation’s most trusted and revered food retailers and, as such, go well beyond the industry-wide thresholds for farming standards. In addition to the annual inspections, Stonegate’s own team of qualified and experienced field staff support every farm in maintaining the highest standards, conducting physical inspections at least every quarter and provide technical advice to ensure welfare, food standards, environmental compliance and performance are maintained. We measure a huge amount of data from every farm and use performance benchmarking, via trade-specific software, to drive continuous improvement and competition, sharing best practice via social media and face to face engagement.

 

We have continued to conduct detailed carbon foot printing on our farms, identifying the range of emissions from the greatest contributing aspect of our total operations; egg production, defined within our Scope 3 emissions. This work has afforded us insight into the drivers of emissions in our whole supply chain and has informed the development, launch and continued growth of our Respectful brand of eggs.

 

Under the Respectful specification, imported soy is replaced with homegrown sources of protein, and in conjunction with other features of our supply farms, has delivered 50% reductions in CO2e/kg. According to the certifying body, Climate Partner GmbH, the production of eggs to the farm gate represents three quarters of all emissions in the product lifecycle, so a 50% reduction is significant. Respectful Eggs are the UK’s first carbon neutral eggs, with the remaining balance of emissions offset through high standard carbon credits, supporting several projects to protect the Amazon rainforest in Brazil.

 

Elsewhere, we have commissioned studies into animal behaviour and nutrition via both academia and trade. We’re sponsoring a PhD study at the renowned poultry behaviour faculty in Bristol University, and as part of our ongoing response to the environmental concerns reported in the Wye & Usk catchment area, we’re researching how phosphorus in manure can be reduced through changes in dietary protein with a leading feed manufacturer, with strong recommendations emerging.

STONEGATE FOOD GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the director's report. It has done so in respect of financial risk management objectives and policies.

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 A D Gott
Director
28 March 2024
STONEGATE FOOD GROUP LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

 

 

The director is 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. He is 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.

STONEGATE FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STONEGATE FOOD GROUP LIMITED
- 12 -
Opinion

We have audited the financial statements of Stonegate Food Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2023 which comprise 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 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 director 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 director is 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.

STONEGATE FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STONEGATE FOOD GROUP LIMITED
- 13 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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 director's report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the 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 director either intends to liquidate the parent company or to cease operations, or has 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:

STONEGATE FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STONEGATE FOOD GROUP LIMITED
- 14 -

We identified the following areas as those most likely to have a material impact on the financial statements: employment law, health and safety legislation, food hygiene and safety regulations, and compliance with the UK Companies Act.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.

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.

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.

Joe Sullivan
Senior Statutory Auditor
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
28 March 2024
STONEGATE FOOD GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
2023
2022
as restated
Notes
£
£
Turnover
4
195,615,770
158,817,199
Cost of sales
(165,537,225)
(135,924,699)
Gross profit
30,078,545
22,892,500
Administrative expenses
(25,582,582)
(22,366,481)
Other operating income
303,269
478,212
Operating profit
5
4,799,232
1,004,231
Interest receivable and similar income
8
56,187
967
Interest payable and similar expenses
10
(462,151)
(416,296)
Amounts written off investments
9
(6,540)
-
Profit before taxation
4,386,728
588,902
Tax on profit
11
(1,160,998)
(85,866)
Profit for the financial year
3,225,730
503,036
Other comprehensive income
Actuarial (loss)/gain on defined benefit pension schemes
(272,000)
945,000
Tax relating to other comprehensive income
59,840
(179,550)
Total comprehensive income for the year
3,013,570
1,268,486
Profit for the financial year is all attributable to the owner of the parent company.
Total comprehensive income for the year is all attributable to the owner of the parent company.

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

STONEGATE FOOD GROUP LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 16 -
30 September 2023
1 October 2022
Notes
£
£
£
£
Fixed assets
Goodwill
14
228,483
283,319
Other intangible assets
14
44,691
79,975
Total intangible assets
273,174
363,294
Tangible assets
15
15,297,965
15,047,437
Investment property
16
500,000
500,000
Investments
17
-
0
6,069
16,071,139
15,916,800
Current assets
Stocks
20
5,215,687
5,059,897
Debtors
21
27,658,432
24,601,943
Investments
22
-
0
471
Cash at bank and in hand
510,530
353,576
33,384,649
30,015,887
Creditors: amounts falling due within one year
23
(30,541,792)
(31,485,242)
Net current assets/(liabilities)
2,842,857
(1,469,355)
Total assets less current liabilities
18,913,996
14,447,445
Creditors: amounts falling due after more than one year
26
(4,274,354)
(3,711,187)
Provisions for liabilities
Deferred tax liability
27
2,298,453
1,256,239
(2,298,453)
(1,256,239)
Net assets
12,341,189
9,480,019
Capital and reserves
Called up share capital
29
50
50
Profit and loss reserves
12,341,139
9,479,969
Total equity
12,341,189
9,480,019
The financial statements were approved and signed by the director and authorised for issue on 28 March 2024
28 March 2024
Mr A D Gott
Director
Company registration number 11153598 (England and Wales)
STONEGATE FOOD GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2023
30 September 2023
- 17 -
30 September 2023
1 October 2022
Notes
£
£
£
£
Fixed assets
Investments
17
31,700,000
31,700,000
Current assets
Debtors
21
554,667
554,667
Creditors: amounts falling due within one year
23
(26,597,557)
(26,597,557)
Net current liabilities
(26,042,890)
(26,042,890)
Net assets
5,657,110
5,657,110
Capital and reserves
Called up share capital
29
50
50
Profit and loss reserves
5,657,060
5,657,060
Total equity
5,657,110
5,657,110

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £152,400 (2022 - £152,400 profit).

The financial statements were approved and signed by the director and authorised for issue on 28 March 2024
28 March 2024
Mr A D Gott
Director
Company registration number 11153598 (England and Wales)
STONEGATE FOOD GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 3 October 2021
50
8,363,883
8,363,933
Year ended 1 October 2022:
Profit for the year
-
503,036
503,036
Other comprehensive income:
Actuarial gains on defined benefit plans
-
945,000
945,000
Tax relating to other comprehensive income
-
(179,550)
(179,550)
Total comprehensive income
-
1,268,486
1,268,486
Dividends
12
-
(152,400)
(152,400)
Balance at 1 October 2022
50
9,479,969
9,480,019
Year ended 30 September 2023:
Profit for the year
-
3,225,730
3,225,730
Other comprehensive income:
Actuarial gains on defined benefit plans
-
(272,000)
(272,000)
Tax relating to other comprehensive income
-
59,840
59,840
Total comprehensive income
-
3,013,570
3,013,570
Dividends
12
-
(152,400)
(152,400)
Balance at 30 September 2023
50
12,341,139
12,341,189
STONEGATE FOOD GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 3 October 2021
50
5,657,060
5,657,110
Year ended 1 October 2022:
Profit and total comprehensive income for the year
-
152,400
152,400
Dividends
12
-
(152,400)
(152,400)
Balance at 1 October 2022
50
5,657,060
5,657,110
Year ended 30 September 2023:
Profit and total comprehensive income
-
152,400
152,400
Dividends
12
-
(152,400)
(152,400)
Balance at 30 September 2023
50
5,657,060
5,657,110
STONEGATE FOOD GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
36
8,773,478
(5,457,433)
Interest paid
(462,151)
(391,296)
Income taxes refunded/(paid)
51,534
-
Net cash inflow/(outflow) from operating activities
8,362,861
(5,848,729)
Investing activities
Purchase of tangible fixed assets
(1,169,440)
(1,167,026)
Proceeds on disposal of tangible fixed assets
15,950
8,000
Repayment of loan/(loans made)
-
1,250,000
Interest received
1,187
967
Net cash (used in)/generated from investing activities
(1,152,303)
91,941
Financing activities
(Decrease)/increase in other loans
(5,501,980)
6,715,524
Payment of finance leases obligations
(1,399,224)
(1,502,027)
Dividends paid to equity shareholders
(152,400)
(152,400)
Net cash (used in)/generated from financing activities
(7,053,604)
5,061,097
Net increase/(decrease) in cash and cash equivalents
156,954
(695,691)
Cash and cash equivalents at beginning of year
353,576
1,049,267
Cash and cash equivalents at end of year
510,530
353,576
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
1
Accounting policies
Company information

Stonegate Food Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Lacock Green, Corsham Road, Lacock, Chippenham, SN15 2LZ.

 

The group consists of Stonegate Food Group 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 investment properties at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 22 -
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, except in the case of a group reconstruction.

 

The company was incorporated on 16 January 2018, and acquired Gott Agri Synergy Limited and its subsidiaries on 18 December 2018 as part of a demerger process. The introduction of a new holding company constituted a group reconstruction and has been accounted for using merger accounting principles. Therefore, although the group reconstruction did not become effective until 18 December 2018, the consolidated financial statements are presented as if Stonegate Food Group Limited had always been part of the same group.

 

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 excess of the fair value of the identifiable assets, liabilities and contingent liabilities acquired over the cost of a business combination is recognised as negative 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 are accounted for at cost less impairment.

1.3
Basis of consolidation

The consolidated financial statements incorporate those of Stonegate Food Group Limited and all of its subsidiaries (i.e. 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 September 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.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.4
Going concern

Inflationary pressures from the impact of political instability and regional conflicts had a significant impact on many businesses in 2022-23 with food producers no less severely impacted than other sectors. The director believes that the group is well placed to minimise any impact.

 

Management are continuously assessing the impact of inflationary pressures on customers and the supply chain with regular contact taking place throughout the supply chain to minimise any disruption. Where forward positions have been taken the group is protected from that cover in the short to medium term. Costs that are exposed to the current market volatility are being managed pro-actively through sympathetic engagement with our strategic suppliers and customers. The group remains confident of its ability to appropriately manage the short to medium term volatility being generated by these risks. Actions have also been taken in the past to enable the business to establish a strong financial platform, and this together with the current balance sheet strength positions the group well. Cash flow projections have been prepared for the group to cover at least twelve months following the approval of the financial statements, which indicate that the group will generate sufficient resources to meet their obligations as they fall due.

 

After considering the impact of the above, at the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for the sale of eggs and related produce provided in the normal course of business, and is shown net of VAT. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

 

Negative goodwill represents the difference between the cost of acquisition of a business and the fair value of the new assets acquired. It is initially recognised as a negative asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Negative goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected useful life, which is 10 years.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Software
20% to 33% per annum
1.8
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Once assets are brought into use, depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2% per annum
Plant and equipment
5% - 33% per annum
Fixtures and fittings
5% per annum
Motor vehicles
17% - 25% per annum

Assets in the course of construction are not depreciated.

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.

1.9
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. The surplus or deficit on revaluation is recognised in the profit or loss account.

1.10
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 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.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 25 -
1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

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.

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.

1.12
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, costs incurred in bringing the stocks to their present location and condition.

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.

1.13
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.14
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.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 26 -
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.

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.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 27 -
Basic financial liabilities

Basic financial liabilities, including creditors and other borrowings 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.

Other financial liabilities

All of the group's liabilities are basic financial instruments.

Derecognition of financial liabilities

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

1.15
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.

1.16
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.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 28 -
1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense. 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

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit or loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to the profit or loss account on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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.

2
Change in accounting policy

The director has reviewed the categorisation of expenditure, and has decided to reclassify certain amounts to better reflect the activities of the group. The comparative figures have been restated to reflect this reclassification of costs, resulting in an increase in cost of sales of £9,243,056, a reduction in distribution costs of £2,537,127, and a reduction in administrative expenses of £6,705,929. There is no other effect on the figures previously reported.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 29 -
3
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Impairment of trade debtors

At each balance sheet date, management undertake an assessment of the recoverability of trade debtors based upon their knowledge of the customers, ageing of the balances outstanding and previous write off history. Where necessary, an impairment is recorded as a doubtful debt.

 

The actual level of debt collected may differ from the estimated level of recovery.

Impairment of fixed assets

At each balance sheet date, management undertake an assessment of the carrying value of the tangible fixed assets to determine whether there is any indication that the value has been impaired. Where necessary, an impairment is recorded as an impairment loss.

Goodwill

At each balance sheet date after initial recognition, the parent shall, in the consolidated financial statements, measure both positive and negative goodwill acquired in a business combination at cost less accumulated amortisation and accumulated impairment losses.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
3
Judgements and key sources of estimation uncertainty
(Continued)
- 30 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Accruals and provisions

At each balance sheet date, management undertake an assessment of the costs which have not yet been invoiced based upon their contractual arrangements and include appropriate provisions for these costs.

Pension and other post-employment benefits

The group has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend upon a number of factors, including; Life expectancy, salary increases, asset valuations and inflation.

 

The director estimates these factors in determining the pension obligation at the balance sheet date. The assumptions reflect historic experience and current trends. Refer to the notes to the financial statements for disclosures relating to the defined benefit pension schemes.

 

In order to assist in adhering to the criteria of FRS102, section 28 'Employee benefits', the director uses the services of an independent external Actuary, who possess all relevant professional qualifications to deliver the calculations of the defined benefit schemes' balance as at the reporting date.

 

The director believes that this approach minimises any estimation uncertainty to an acceptable level.

4
Turnover and other revenue

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

2023
2022
£
£
Turnover analysed by class of business
Attributable to the principal activity
195,615,770
158,817,199
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
195,615,770
158,817,199
2023
2022
£
£
Other revenue
Interest income
56,187
967
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 31 -
5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
1,210,312
851,143
Depreciation of tangible fixed assets held under finance leases
1,150,703
884,295
Impairment of owned tangible fixed assets
659,391
-
Loss/(profit) on disposal of tangible fixed assets
2,679
(8,000)
Amortisation of intangible assets
90,120
90,120
Operating lease charges
2,429,223
2,670,207
6
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
5,550
4,850
Audit of the financial statements of the company's subsidiaries
42,750
37,300
48,300
42,150
For other services
Taxation compliance services
10,300
9,550
Other taxation services
16,890
7,850
All other non-audit services
4,475
4,150
31,665
21,550
7
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
345
277
-
-
Sales and distribution
144
106
-
-
Administration
77
73
-
-
Total
566
456
-
0
-
0
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
7
Employees
(Continued)
- 32 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
21,568,096
17,179,090
-
0
-
0
Social security costs
1,727,567
1,447,941
-
-
Pension costs
407,601
356,335
-
0
-
0
23,703,264
18,983,366
-
0
-
0
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on the net defined benefit asset
55,000
-
0
Other interest income
1,187
967
Total income
56,187
967
9
Amounts written off investments
2023
2022
£
£
Other gains and losses
(6,540)
-
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
48,819
61,776
Other interest on financial liabilities
218,547
173,607
Interest on finance leases and hire purchase contracts
194,785
155,913
Net interest on the net defined benefit balance
-
0
25,000
Total finance costs
462,151
416,296
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
110,478
-
0
Adjustments in respect of prior periods
(51,534)
-
0
Total current tax
58,944
-
0
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11
Taxation
2023
2022
£
£
(Continued)
- 33 -
Deferred tax
Origination and reversal of timing differences
1,075,024
85,146
Changes in tax rates
147,248
26,889
Adjustment in respect of prior periods
(120,218)
(26,169)
Total deferred tax
1,102,054
85,866
Total tax charge
1,160,998
85,866

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

2023
2022
£
£
Profit before taxation
4,386,728
588,902
Expected tax charge based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
965,080
111,891
Tax effect of expenses that are not deductible in determining taxable profit
247,479
61,305
Adjustments in respect of prior years
(51,534)
-
0
Effect of change in corporation tax rate
147,248
26,889
Other permanent differences
(27,057)
(88,050)
Deferred tax adjustments in respect of prior years
(120,218)
(26,169)
Taxation charge
1,160,998
85,866

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
(59,840)
179,550
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11
Taxation
(Continued)
- 34 -

Factors affecting future tax and charges

In March 2021 the Chancellor confirmed, in the budget, an increase in the corporation tax rate from 19% to 25%. The Finance Bill 2021 had its third reading on 24 May 2021 and became substantively enacted. There were announcements to the contrary in the mini-budget of October 2022, but these announcements have since been reversed and so the new rate of 25% remains substantively enacted. Therefore, the timing differences expected to reverse on or after 1 April 2023 have been accounted for at 25% and therefore deferred tax has been provided for at 25% (2022: 25%).

12
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
152,400
152,400
13
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Property, plant and equipment
15
659,391
-
Fixed asset investments
17
6,540
-
Recognised in:
Cost of sales
659,391
-
Amounts written off investments
6,540
-
14
Intangible fixed assets
Group
Positive goodwill
Negative goodwill
Software
Total
£
£
£
£
Cost
At 2 October 2022 and 30 September 2023
548,360
(6,017,129)
190,013
(5,278,756)
Amortisation and impairment
At 2 October 2022
265,041
(6,017,129)
110,038
(5,642,050)
Amortisation charged for the year
54,836
-
0
35,284
90,120
At 30 September 2023
319,877
(6,017,129)
145,322
(5,551,930)
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
14
Intangible fixed assets
(Continued)
- 35 -
Carrying amount
At 30 September 2023
228,483
-
0
44,691
273,174
At 1 October 2022
283,319
-
0
79,975
363,294
The company had no intangible fixed assets at 30 September 2023 or 1 October 2022.
15
Tangible fixed assets
Group
Freehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 2 October 2022
1,311,362
135,146
19,911,921
295,681
364,658
22,018,768
Additions
-
0
-
0
1,102,999
-
0
2,186,564
3,289,563
Disposals
-
0
-
0
(30,950)
-
0
(18,498)
(49,448)
Transfers
-
0
(135,146)
135,146
-
0
-
0
-
0
At 30 September 2023
1,311,362
-
0
21,119,116
295,681
2,532,724
25,258,883
Depreciation and impairment
At 2 October 2022
471,153
-
0
6,218,952
22,269
258,957
6,971,331
Depreciation charged in the year
20,150
-
0
2,055,115
14,784
270,966
2,361,015
Impairment losses
659,391
-
0
-
0
-
0
-
0
659,391
Eliminated in respect of disposals
-
0
-
0
(12,321)
-
0
(18,498)
(30,819)
At 30 September 2023
1,150,694
-
0
8,261,746
37,053
511,425
9,960,918
Carrying amount
At 30 September 2023
160,668
-
0
12,857,370
258,628
2,021,299
15,297,965
At 1 October 2022
840,209
135,146
13,692,969
273,412
105,701
15,047,437
The company had no tangible fixed assets at 30 September 2023 or 1 October 2022.
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
15
Tangible fixed assets
(Continued)
- 36 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
5,736,539
6,655,250
-
0
-
0
Motor vehicles
1,960,908
11,835
-
0
-
0
7,697,447
6,667,085
-
-
16
Investment property
Group
Company
2023
2023
£
£
Fair value
At 2 October 2022 and 30 September 2023
500,000
-

The fair value of the investment property has been arrived at on the basis of a valuation carried out at 30 September 2016 by Savills (UK) Limited Chartered Surveyors, who are not connected with the company. The valuation was made on a fair value basis.

 

At the year end, the director has reviewed the valuation, and believes that the valuation of the property in the accounts is a fair reflection of its current worth.

17
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
18
-
0
-
0
31,700,000
31,700,000
Unlisted investments
-
0
6,069
-
0
-
0
-
0
6,069
31,700,000
31,700,000
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
17
Fixed asset investments
(Continued)
- 37 -
Movements in fixed asset investments
Group
Investments
£
Cost
At 2 October 2022
6,069
Disposals
(6,069)
At 30 September 2023
-
Carrying amount
At 30 September 2023
-
At 1 October 2022
6,069
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost
At 2 October 2022 and 30 September 2023
31,700,000
Carrying amount
At 30 September 2023
31,700,000
At 1 October 2022
31,700,000
18
Subsidiaries

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

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Clarence Court Eggs Limited
1
Ordinary
100.00
-
Stonegate Agriculture Limited
1
Ordinary
-
100.00
Stonegate Farmers Limited
1
Ordinary
100.00
-
Thames Valley Eggs (Production) Limited
1
Ordinary
-
100.00
CC IPR Ltd
1
Ordinary
100.00
-

Registered office addresses (all UK unless otherwise indicated):

1
Lacock Green, Corsham Road, Lacock, Chippenham, Wiltshire, SN15 2LZ
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 38 -
19
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
-
471
-
-
20
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Eggs, egg products and packaging
2,432,017
2,137,031
-
-
Livestock
2,156,927
2,034,548
-
-
Feed and raw materials
626,743
888,318
-
0
-
0
5,215,687
5,059,897
-
-
21
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
20,043,727
19,553,047
-
0
-
0
Amounts owed by group undertakings
-
-
58,800
58,800
Other debtors
2,503,220
1,732,337
495,867
495,867
Prepayments and accrued income
5,111,485
1,815,118
-
0
-
0
27,658,432
23,100,502
554,667
554,667
Amounts falling due after more than one year:
Prepayments and accrued income
-
0
1,501,441
-
0
-
0
Total debtors
27,658,432
24,601,943
554,667
554,667
22
Current asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Unlisted investments
-
471
-
-
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 39 -
23
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
25
1,484,302
1,326,570
-
0
-
0
Other loans
24
6,241,320
11,743,300
-
0
-
0
Trade creditors
12,585,934
11,721,273
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
26,597,557
26,597,557
Corporation tax payable
110,478
-
0
-
0
-
0
Other taxation and social security
493,286
422,197
-
-
Other creditors
281,428
160,071
-
0
-
0
Accruals and deferred income
9,345,044
6,111,831
-
0
-
0
30,541,792
31,485,242
26,597,557
26,597,557
24
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Other loans
6,241,320
11,743,300
-
0
-
0
Payable within one year
6,241,320
11,743,300
-
0
-
0

The group meets its day-to-day working capital requirements through an invoice discounting facility (shown as other loans above), which is secured by a debenture over the assets of certain group companies. The invoice discounting facility is repayable on demand.

25
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
1,487,302
1,326,570
-
0
-
0
In two to five years
4,271,354
3,659,055
-
0
-
0
In over five years
-
0
52,132
-
0
-
0
5,758,656
5,037,757
-
-

Finance lease payments represent rentals payable by group for certain items of plant and machinery held under hire purchase. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The creditor is secured on the assets to which it relates.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 40 -
26
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
25
4,274,354
3,711,187
-
0
-
0
27
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
2,314,033
1,793,458
Tax losses
-
(531,256)
Short term timing differences
(15,580)
(5,963)
2,298,453
1,256,239
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 2 October 2022
1,256,239
-
Charge to profit or loss
1,102,054
-
Credit to other comprehensive income
(59,840)
-
Liability at 30 September 2023
2,298,453
-

As at the signing date of these financial statements, the group has not finalised its capital expenditure programme for the forthcoming year, and therefore an assessment as to the likely movement of other related timing differences cannot be made.

28
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
407,601
356,335
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
28
Retirement benefit schemes
(Continued)
- 41 -

Two of the companies in the group operate a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

 

Further analysis for each scheme is provided below.

The company had no defined contribution scheme in the year ended 30 September 2023.

Defined benefit schemes

Stonegate Farmers Limited operates pension arrangements providing benefits based on final pensionable salary for its employees. There are two partly funded defined benefit schemes for which Stonegate Farmers Limited is responsible: the Stonegate Farmers Limited Scheme and the Thames Valley Eggs Limited Scheme. The assets in each of the schemes are held separately from those of the companies, being invested by professional investment managers.

 

The group has not recognised a pension scheme asset at the balance sheet date as it cannot demonstrate that it would likely benefit from either qualifying criteria as stated in FRS102 section 28.22, namely that it cannot recover the surplus either through reduced future contributions or through refunds from the defined pension plan. As a consequence a restriction on the scheme surplus of £410,000 has been recognised for the Stonegate Farmers Limited Scheme, and a restriction on the scheme surplus of £833,000 has been recognised for the Thames Valley Eggs Limited Scheme, such that each scheme surplus is recognised at a balance of £Nil within the balance sheet at 30 September 2023.

The total net pension liability at the year end is £nil (2022: £nil). This comprises a net liability of £nil (2022: £nil) for the Stonegate Farmers Limited Scheme and a net liability of £nil (2022: £nil) for the Thames Valley Eggs Limited Scheme. Further analysis for each scheme is provided below.

Stonegate Farmers Limited Scheme

The Stonegate Farmers Limited Scheme was paid up with no further accrual of future benefits with effect from 30 September 2001.

 

An actuarial valuation of Stonegate Farmers Limited Scheme as at 1 October 2019 showed a funding shortfall of £472,000. To eliminate the shortfall the Trustees and the Employer agreed:

 

Annual contributions of £222,000 per annum from 1 October 2019 to 30 September 2020;

Annual contributions of £55,000 per annum from 1 October 2020 to 31 March 2024.

 

The last actuarial valuation of the Stonegate Farmers Limited Scheme was as at 1 October 2022. The report has been updated to take accounts of the requirements of FRS 102 in order to assess the scheme deficit at 30 September 2023.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
28
Retirement benefit schemes
(Continued)
- 42 -
Thames Valley Eggs Limited Scheme

The Thames Valley Eggs Limited Scheme was paid up with no further accrual of future benefits with effect from 1 October 2008.

 

An actuarial valuation of the Thames Valley Eggs Limited Scheme as at 1 October 2019 showed a funding shortfall of £1.008 million. To eliminate the shortfall the Trustees and the Employer agreed:

 

Annual contributions of £225,000 per annum from 1 October 2019 to 30 September 2020;

Annual contributions of £162,000 per annum from 1 October 2020 to 31 March 2025.

 

The last actuarial valuation of the Thames Valley Eggs Limited Scheme was as at 1 October 2022. The report has been updated to take accounts of the requirements of FRS 102 in order to assess the scheme deficit at 30 September 2023.

In respect of the Stonegate Farmers Limited Scheme the major assumptions used by the actuary for FRS102 purposes were:
2023
2022
Key assumptions
%
%
Discount rate
5.40
5.70
Expected rate of increase of pensions in payment
5.00
5.00
CPI Inflation
3.20
3.50
Expected return on plan assets
5.70
2.20
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
21.6
21.6
- Females
23.7
23.7
2023
2022

Amounts recognised in the profit and loss account

£
£
Net interest on defined benefit liability/(asset)
(20,000)
21,000
2023
2022

Amounts taken to other comprehensive income

£
£
Return on scheme assets excluding interest income
(116,000)
416,000
Actuarial changes related to obligations
132,000
(1,681,000)
Effect of changes in the amount of surplus that is not recoverable
59,000
351,000
Total costs/(income)
75,000
(914,000)
In respect of the Thames Valley Eggs Limited Scheme the major assumptions used by the actuary for FRS102 purposes were:
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
28
Retirement benefit schemes
(Continued)
- 43 -
2023
2022
Key assumptions
%
%
Discount rate
5.40
5.40
Expected rate of increase of pensions in payment
3.00/3.20
3.00/3.50
CPI Inflation
3.20
3.50
Expected return on plan assets
5.40
2.20
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
21.6
21.6
- Females
23.7
23.7
2023
2022

Amounts recognised in the profit and loss account

£
£
Net interest on defined benefit liability/(asset)
(35,000)
4,000
2023
2022

Amounts taken to other comprehensive income

£
£
Return on scheme assets excluding interest income
(13,000)
572,000
Actuarial changes related to obligations
21,000
(1,247,000)
Effect of changes in the amount of surplus that is not recoverable
189,000
644,000
Total costs/(income)
197,000
(31,000)
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
28
Retirement benefit schemes
(Continued)
- 44 -

The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:

Stonegate
Farmers Limited
Thames Valley
Eggs Limited
Group Total
Group Total
2023
2023
2023
2022
Group
£
£
£
£
Present value of defined benefit obligations
3,151,000
3,938,000
7,089,000
7,025,000
Fair value of plan assets
(3,561,000)
(4,771,000)
(8,332,000)
(8,020,000)
Deficit in scheme
(410,000)
(833,000)
(1,243,000)
(995,000)
Restriction on scheme assets
410,000
833,000
1,243,000
995,000
Total liability recognised
-
-
-
-
The company had no post employment benefits at 30 September 2023 or 2 October 2022.
Stonegate
Farmers
Limited
Thames Valley
Eggs Limited
Group Total
2023
2023
2023

Movements in the present value of defined benefit obligations

£
£
Liabilities at 2 October 2022
2,987,000
4,038,000
7,025,000
Benefits paid
(136,000)
(339,000)
(475,000)
Actuarial gains and losses
132,000
21,000
153,000
Interest cost
168,000
218,000
386,000
At 30 September 2023
3,151,000
3,938,000
7,089,000

The defined benefit obligations arise from plans which are wholly or partly funded.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
28
Retirement benefit schemes
(Continued)
- 45 -
Stonegate
Farmers
Limited
Thames Valley
Eggs Limited
Group Total
2023
2023
2023

Movements in the fair value of plan assets

£
£
£
Fair value of assets at 2 October 2022
3,338,000
4,682,000
8,020,000
Interest income
188,000
253,000
441,000
Return on plan assets (excluding amounts included in net interest)
116,000
13,000
129,000
Benefits paid
(136,000)
(339,000)
(475,000)
Contributions by the employer
55,000
162,000
217,000
At 30 September 2023
3,561,000
4,771,000
8,332,000

Fair value of plan assets at the reporting period end

Stonegate
Farmers
Limited
Thames Valley
Eggs Limited
Group Total
Group Total
2023
2023
2023
2022
£
£
£
£
Equities
2,136,600
2,385,500
4,522,100
4,250,160
Diversified growth funds
569,760
811,070
1,380,830
1,363,400
Fixed interest
605,370
906,490
1,511,860
1,310,080
Property
142,440
524,810
667,250
775,560
Cash
106,830
143,130
249,960
320,800
3,561,000
4,771,000
8,332,000
8,020,000

The pension plan assets do not include ordinary shares issued by the sponsoring employer nor do they include property occupied by the sponsoring employer.

 

 

29
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
50
50
50
50
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 46 -
30
Financial commitments, guarantees and contingent liabilities

The group is party to a cross guarantee in favour of HSBC UK Bank plc. As part of the cross composite guarantee between the companies under common control, a mortgage debenture exists which provides HSBC UK Bank plc with charges over all company assets, as security against its exposure to debt. The total liability under this guarantee across these companies at 2 October 2021 was £8,151,926. On 12 October 2021 the total liability under this guarantee across these companies was limited to £1,400,000.

 

The company is party to a cross guarantee in favour of HSBC UK Bank plc. As part of the cross composite guarantee between the group companies, an unlimited multilateral guarantee exists which provides HSBC UK Bank plc with charges over all company assets, as security against its exposure to debt. The total liability under this guarantee across these companies is £6,241,320 (2022: £11,743,300).

 

The company is party to a cross guarantee in favour of HSBC Equipment Finance (UK) Limited in relation to the financing arrangements for various assets in group companies. The total liability under this guarantee across these companies is £5,758,656 (2022: £5,037,757).

31
Operating lease commitments
Lessee

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
2,337,640
2,467,362
-
-
Between two and five years
8,596,582
8,268,092
-
-
In over five years
10,343,266
12,559,357
-
-
21,277,488
23,294,811
-
-
32
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
36,837
322,345
-
-
33
Related party transactions
Remuneration of key management personnel

The group has taken the exemption from disclosing key management personnel remuneration as the key management personnel is considered to be the director.

Other information
STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
33
Related party transactions
(Continued)
- 47 -

Included within other operating income is £100,000 (2022: £299,719) of management charges raised to a company with a common director.

 

During the year the group made purchases of £2,428,510 (2022: £2,132,132) from companies with a common director. At the year end a total of £1,273,447 (2022: £1,143,400) was due from companies with a common director, and a total of £nil (2022: £341,404) was due to companies with a common director.

 

As permitted by FRS 102 Section 33, transactions entered into between two or more members of the group are not disclosed, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

34
Directors' transactions

Dividends totalling £152,400 (2022 - £152,400) were paid in the year in respect of shares held by the company's director.

Advances or credits have been granted by the group to its director as follows:

The maximum amount owed to the company during the year was £78,593.

Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Loan
2.00
(10,771)
153,774
561
(152,400)
(8,836)
(10,771)
153,774
561
(152,400)
(8,836)
35
Controlling party

The ultimate controlling party is Mr A D Gott, who owns the entire share capital of the company.

STONEGATE FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 48 -
36
Cash generated from/(absorbed by) group operations
2023
2022
£
£
Profit for the year after tax
3,225,730
503,036
Adjustments for:
Taxation charged
1,160,998
85,866
Finance costs
462,151
416,296
Investment income
(56,187)
(967)
Loss/(gain) on disposal of tangible fixed assets
2,679
(8,000)
Amortisation and impairment of intangible assets
90,120
90,120
Depreciation and impairment of tangible fixed assets
3,020,406
1,735,438
Other gains and losses
6,540
-
Pension scheme non-cash movement
(217,000)
(217,000)
Movements in working capital:
Increase in stocks
(155,790)
(831,935)
Increase in debtors
(3,056,489)
(9,566,322)
Increase in creditors
4,290,320
2,336,035
Cash generated from/(absorbed by) operations
8,773,478
(5,457,433)
37
Analysis of changes in net debt - group
2 October 2022
Cash flows
New finance leases
30 September 2023
£
£
£
£
Cash at bank and in hand
353,576
156,954
-
510,530
Borrowings excluding overdrafts
(11,743,300)
5,501,980
-
(6,241,320)
Obligations under finance leases
(5,037,757)
1,399,224
(2,120,123)
(5,758,656)
(16,427,481)
7,058,158
(2,120,123)
(11,489,446)
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