Company registration number SC294053 (Scotland)
KERR'S BAKERY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 JULY 2023
PAGES FOR FILING WITH REGISTRAR
KERR'S BAKERY LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
KERR'S BAKERY LIMITED
BALANCE SHEET
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
5
9,128,620
2,663,288
Current assets
Stocks
916,429
251,050
Debtors
6
481,547
408,092
Cash at bank and in hand
112,700
89,817
1,510,676
748,959
Creditors: amounts falling due within one year
7
(6,218,762)
(988,757)
Net current liabilities
(4,708,086)
(239,798)
Total assets less current liabilities
4,420,534
2,423,490
Creditors: amounts falling due after more than one year
8
(1,750,096)
(30,912)
Provisions for liabilities
(383,093)
(103,501)
Net assets
2,287,345
2,289,077
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
2,287,245
2,288,977
Total equity
2,287,345
2,289,077
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 February 2024 and are signed on its behalf by:
K Murray
Director
Company Registration No. SC294053
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 JULY 2023
- 2 -
1
Accounting policies
Company information
Kerr's Bakery Limited is a private company limited by shares incorporated in Scotland. The registered office is Oakfield House, 378 Brandon Street, Motherwell, ML1 1XA.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. 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.
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
At variable rates on a straight line basis between 2% - 33%
Leasehold improvements
4% straight line
Fixtures and fittings
At variable rates on a straight line basis between 6.67% - 33%
Motor vehicles
25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Deposits paid in respect of Fixtures & Fittings are capitalised within tangible fixed assets and not depreciated until the asset is available for use.
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JULY 2023
1
Accounting policies
(Continued)
- 3 -
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JULY 2023
1
Accounting policies
(Continued)
- 4 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred 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 when the company has 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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JULY 2023
1
Accounting policies
(Continued)
- 5 -
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,500
9,000
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
42
44
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JULY 2023
- 6 -
5
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Assets under construction
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 31 July 2022
1,097,558
205,698
2,339,173
95,147
3,737,576
Additions
3,895,521
2,774,693
17,500
6,687,714
Disposals
(8,649)
(39,751)
(48,400)
Transfers
205,698
(205,698)
At 29 July 2023
1,303,256
3,895,521
5,105,217
72,896
10,376,890
Depreciation and impairment
At 31 July 2022
248,368
777,530
48,390
1,074,288
Depreciation charged in the year
24,151
160,169
18,789
203,109
Eliminated in respect of disposals
(2,342)
(26,785)
(29,127)
At 29 July 2023
272,519
935,357
40,394
1,248,270
Carrying amount
At 29 July 2023
1,030,737
3,895,521
4,169,860
32,502
9,128,620
At 30 July 2022
849,190
205,698
1,561,643
46,757
2,663,288
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
406,360
374,969
Corporation tax recoverable
9,097
Other debtors
58,509
21,403
Prepayments and accrued income
7,581
11,720
481,547
408,092
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JULY 2023
- 7 -
7
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
701,906
37,094
Obligations under finance leases
120,102
Trade creditors
350,854
289,745
Amounts owed to group undertakings
4,896,502
488,349
Corporation tax
94,688
Other taxation and social security
24,648
20,460
Government grants
1,844
Other creditors
8,371
12,410
Accruals and deferred income
116,379
44,167
6,218,762
988,757
The bank term loan is secured against a floating charge over the assets of the Company with all group companies providing a guarantee to the bank. The loan has interest charged at 1.9% per annum over the Bank of England Base Rate. It is repayable by installment with a bullet repayment due in April 2028.
Hire purchase contracts are secured over the assets to which they relate.
8
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
905,913
30,912
Obligations under finance leases
844,183
1,750,096
30,912
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Michael Walker
Statutory Auditor:
Azets Audit Services
10
Financial commitments, guarantees and contingent liabilities
The company has cross guaranteed the following borrowings of D McGhee & Sons Limited and Fergusons Bakers Limited:
a) The bank overdraft facility, which amounted to £1,832,304 at 29 July 2023 (2022: £1,005,797).
b) Loans due amounts to £981,699 at 29 July 2023 (2022: £nil).
KERR'S BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JULY 2023
- 8 -
11
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
92,192
12
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
5,182
-
13
Parent company
The parent company of Kerr's Bakery Limited is D McGhee & Sons Limited, a company registered in the UK.
The ultimate controlling party is McGhee Group Limited.
The smallest group the company is consolidated in to is D McGhee & Sons Limited. The largest group the company is consolidated in to is McGhee Group Limited.