Company registration number 00842705 (England and Wales)
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
COMPANY INFORMATION
Directors
Mrs M V Altham
Mr J C Altham
Mr R C Altham
Secretary
Mrs M V Altham
Company number
00842705
Registered office
Northgate
White Lund Industrial Estate
Morecambe
LA3 3AY
Auditor
MHA Moore and Smalley
14 Mannin Way
Lancaster Business Park
Lancaster
LA1 3SW
Solicitors
Wright & Lord
53 Princes Crescent
Morecambe
LA4 6BY
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Notes to the financial statements
9 - 22
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
The Company's core activities remain in the middle to high class sector of the hospitality, hotel and restaurant trade, blended with a small amount of retail business.
Principal risks and uncertainties
Whilst the view of the Directors is that one of the Company's’ main strengths is excellent debtors and creditor control. This strict cash control is maintained by close contact with customers so that credit difficulties are avoided by early action.
Inflation pressures during FY23 have been challenging but the business has been able to adapt and manage these by high growth and maintaining service levels at an above industry average. Fixed energy contracts have provided new stability for on-going costs into FY24.
Development and performance
The Directors are running the business with a 'hands on approach' together with a smaller, but effective senior management team. Performance of the business is monitored by the gross profit margin, cash forecasts and debtor control.
Key performance indicators
The main KPI for the Company continues to be the gross profit margin and cash flow.
We measure our performance with analysis of our operating profit return on sales, absolute levels of overhead expenditure and cash generated from operating activities.
The team understands the values of our Company and being part of its future vision and success. The company will continue to monitor the performance of its employees, customers and suppliers and take action when that performance fails to meet the expected standards.
Key performance indicator 2023 2022
Turnover (£'000s) 14,971 11,731
Gross profit margin % 35.5% 36.8%
EBITDA (£'000s) 1,132 668
Future Developments
The business maintains a strong, balanced customer base and the inflationary costs have now passed. In the medium term, the Company will continue to strive to improve profitability by continuous improvement.
Mrs M V Altham
Secretary
1 February 2024
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of a wholesale catering butchers operating in the catering and hospitality industry.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £402,500. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs M V Altham
Mr J C Altham
Mr R C Altham
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company'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 directors' report. It has done so in respect of principal risks and uncertainties, research and development and future developments.
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 company’s auditor 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 company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
By order of the board
Mrs M V Altham
Secretary
1 February 2024
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
- 4 -
Opinion
We have audited the financial statements of Mrs. J. C. Altham & Sons (Morecambe) Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of income and retained earnings, the balance sheet 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:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management about any known or suspect instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to rebates and provisions for the impairment of assets which requires an exercise of management judgement.
An evaluation of the risk of management override of controls and subsequent testing, including through testing journal entries and other adjustments for appropriateness;
An evaluation of the company's internal control environment; and
Reviewing board minutes and resolutions.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
- 6 -
Because of the industry in which the company operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and safety, food safety regulations, employment law, and compliance with the 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 recognise 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.
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.
Jenny McCabe
Senior Statutory Auditor
For and on behalf of MHA Moore and Smalley
1 February 2024
Chartered Accountants
Statutory Auditor
14 Mannin Way
Lancaster Business Park
Lancaster
LA1 3SW
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
14,971,201
11,731,408
Cost of sales
(9,651,286)
(7,417,257)
Gross profit
5,319,915
4,314,151
Distribution costs
(545,408)
(588,629)
Administrative expenses
(3,857,553)
(3,362,796)
Other operating income
105,532
Operating profit
4
916,954
468,258
Interest payable and similar expenses
7
(62,621)
(27,024)
Profit before taxation
854,333
441,234
Tax on profit
8
(183,805)
(116,115)
Profit for the financial year
670,528
325,119
Retained earnings brought forward
3,240,109
2,914,990
Dividends
9
(402,500)
Retained earnings carried forward
3,508,137
3,240,109
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,088,899
2,228,678
Current assets
Stocks
11
627,866
556,728
Debtors
12
4,003,932
3,714,272
Cash at bank and in hand
1,101,173
675,904
5,732,971
4,946,904
Creditors: amounts falling due within one year
13
(3,246,160)
(2,636,966)
Net current assets
2,486,811
2,309,938
Total assets less current liabilities
4,575,710
4,538,616
Creditors: amounts falling due after more than one year
14
(809,544)
(1,081,683)
Provisions for liabilities
Deferred tax liability
17
226,029
184,824
(226,029)
(184,824)
Net assets
3,540,137
3,272,109
Capital and reserves
Called up share capital
19
32,000
32,000
Profit and loss reserves
3,508,137
3,240,109
Total equity
3,540,137
3,272,109
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 1 February 2024 and are signed on its behalf by:
Mrs M V Altham
Mr R C Altham
Director
Director
Company registration number 00842705 (England and Wales)
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
1
Accounting policies
Company information
Mrs. J. C. Altham & Sons (Morecambe) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Northgate, White Lund Industrial Estate, Morecambe, LA3 3AY.
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. The principal accounting policies adopted are set out below.
This 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:
The financial statements of the company are consolidated in the financial statements of Althams Catering Butchers Limited. These consolidated financial statements are available from its registered office, Northgate, White Lund Industrial Estate, Morecambe, LA3 3AY.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for the provision of wholesale meat to customers net of trade discounts. Turnover is recognised on delivery of the goods provided to the extent that the company has a right to consideration arising from the performance of its contractual obligations. Turnover is substantially within one class of business and is within the United Kingdom.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment provisions.
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
50 years straight line
Plant and machinery
5 - 20 years straight line
Motor vehicles
5 years straight line
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 10 -
No depreciation is provided on the freehold land included within freehold land and buildings.
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.
1.5
Impairment of fixed assets
At each reporting 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).
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
1.6
Stocks
Stock is valued at the lower of cost and net realisable value. In determining the cost of raw materials, consumables and goods purchased for resale, the "first in first out" method is used. For finished goods cost is taken as production cost, and where applicable cost is split by weight of the final product.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents 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.
1.8
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.
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.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 11 -
Impairment of financial assets
Financial assets 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 company 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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss 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 leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Government grants receivable include income under the Coronavirus Job Retention Scheme (CJRS) to reimburse the company of costs incurred in retaining staff who were furloughed due to the impact of closure due to COVID-19. CJRS grants are recognised to match the costs incurred by the company for the period claims are made.
1.15
Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
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
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
14,971,201
11,731,408
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
14,971,201
11,731,408
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 14 -
2023
2022
£
£
Other revenue
Grants received
-
105,532
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(105,532)
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
10,865
Depreciation of owned tangible fixed assets
165,025
149,338
Depreciation of tangible fixed assets held under finance leases
50,287
50,287
Operating lease charges
127,625
110,451
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production and sales
38
38
Office and management
27
25
Directors
3
3
Total
68
66
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,924,500
1,708,770
Social security costs
185,893
163,468
Pension costs
230,356
218,255
2,340,749
2,090,493
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
92,058
80,291
Company pension contributions to defined contribution schemes
194,143
184,800
286,201
265,091
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
33,185
51,462
Interest on finance leases and hire purchase contracts
19,927
(24,438)
Other interest
9,509
62,621
27,024
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
142,756
Deferred tax
Origination and reversal of timing differences
30,799
71,758
Changes in tax rates
10,250
44,357
Total deferred tax
41,049
116,115
Total tax charge
183,805
116,115
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
8
Taxation
(Continued)
- 16 -
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
854,333
441,234
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
162,323
83,834
Tax effect of expenses that are not deductible in determining taxable profit
15,939
1,097
Tax effect of income not taxable in determining taxable profit
(4,286)
(13,173)
Adjustments in respect of prior years
553
Effect of change in rate
9,276
44,357
Taxation charge for the year
183,805
116,115
9
Dividends
2023
2022
£
£
Final paid
402,500
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
10
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2022
1,332,948
3,608,051
100,509
5,041,508
Additions
75,533
75,533
Disposals
(6,949)
(6,949)
At 31 March 2023
1,332,948
3,676,635
100,509
5,110,092
Depreciation and impairment
At 1 April 2022
398,506
2,331,449
82,875
2,812,830
Depreciation charged in the year
27,716
183,096
4,500
215,312
Eliminated in respect of disposals
(6,949)
(6,949)
At 31 March 2023
426,222
2,507,596
87,375
3,021,193
Carrying amount
At 31 March 2023
906,726
1,169,039
13,134
2,088,899
At 31 March 2022
934,442
1,276,602
17,634
2,228,678
The carrying value of land and buildings includes land of:
2023
2022
£
£
Freehold
121,288
121,288
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
420,079
470,367
Freehold land and buildings with a carrying amount of £906,726 (2022 - £934,442) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity without the prior consent of the lender.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
11
Stocks
2023
2022
£
£
Raw materials and consumables
23,190
20,841
Finished goods and goods for resale
604,676
535,887
627,866
556,728
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,483,953
1,301,496
Corporation tax recoverable
27,056
Amounts owed by group undertakings
603,884
603,884
Other debtors
186,219
216,634
Prepayments and accrued income
137,727
82,078
2,411,783
2,231,148
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
1,592,149
1,483,124
Total debtors
4,003,932
3,714,272
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
220,412
227,719
Obligations under finance leases
16
79,198
90,844
Trade creditors
1,371,914
1,082,389
Corporation tax
142,755
Other taxation and social security
56,200
46,300
Other creditors
1,123,351
997,325
Accruals and deferred income
252,330
192,389
3,246,160
2,636,966
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
792,227
988,714
Obligations under finance leases
16
17,317
92,969
809,544
1,081,683
15
Loans and overdrafts
2023
2022
£
£
Bank loans
1,012,639
1,216,433
Payable within one year
220,412
227,719
Payable after one year
792,227
988,714
Loans totalling £479,454 (2022: £523,420) are secured by way of a legal charge held by National Westminster Bank Plc over the land and buildings of the company and a debenture over all assets of the company with the exception of the invoice financed trade receivables.
These loans are due to end in between two and five years. Interest is being charged on loans at 1.75% above the base rate per annum.
Included within bank loans are two CBIL loans totalling £500,000 (2022: £650,000). These are due to end within five years. Interest is being charged on loans at 3.96% above the base rate per annum.
Other creditors of £1,009,019 (2022: £989,400) relate to the invoice financing arrangement with Royal Bank of Scotland. This is secured by way of debenture over all the assets of the company.
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
79,198
90,844
In two to five years
92,969
79,198
183,813
Less: future finance charges
17,317
96,515
183,813
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
16
Finance lease obligations
(Continued)
- 20 -
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. 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 leases are secured against the leased plant and machinery items.
17
Deferred taxation
The following are the major deferred tax liabilities recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
227,479
184,824
Short term timing differences
(1,450)
-
226,029
184,824
2023
Movements in the year:
£
Liability at 1 April 2022
184,824
Charge to profit or loss
41,205
Liability at 31 March 2023
226,029
The directors do not expect the net reversal of the deferred tax liability in the year beginning after the reporting period to be materially different from the movement shown in the current year.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
230,356
218,255
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Included within other creditors at 31 March 2023 is £9,343 (2022: £7,822) in relation to pension contributions outstanding at the year end.
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
32,000
32,000
32,000
32,000
20
Financial commitments, guarantees and contingent liabilities
The company has provided a cross company guarantee to a financer of Althams Fine Foods Limited.
At 31 March 2023 the indebtedness of Althams Fine Foods Limited to this financer amounted to £26,310 (2022: £79,308).
Other than the above there were no contingent liabilities at 31 March 2023 or 31 March 2022.
21
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for motor vehicles. Leases of motor vehicles are negotiated for an average term of 3 years and rentals are fixed for the period.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
78,132
78,645
Between two and five years
32,555
110,687
110,687
189,332
22
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities over which the entity or its directors have control, joint control or significant influence
136,534
282,805
406,867
348,564
MRS. J. C. ALTHAM & SONS (MORECAMBE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
22
Related party transactions
(Continued)
- 22 -
Receipts
Payments
2023
2022
2023
2022
£
£
£
£
Entities over which the entity or its directors have control, joint control or significant influence
278,843
505,484
781,457
833,161
No remuneration was paid to close family members of the directors of the company and its parent company.
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities over which the entity or its directors have control, joint control or significant influence
8,711
78,232
Key management personnel
104,989
104
The following amounts were outstanding at the reporting end date:
2022
2022
Amounts due from related parties
£
£
Entities over which the entity or its directors have control, joint control or significant influence
1,830,285
1,650,094
Other information
The company is a wholly owned subsidiary of Althams Catering Butchers Limited and in accordance with paragraph 33.1A is therefore not required to disclose transactions and balances with that company.
23
Ultimate controlling party
The parent company is Althams Catering Butchers Limited.
There is no single ultimate controlling party of Althams Catering Butchers Limited during the current or prior year.
The company's financial activities are consolidated into the group accounts prepared by Althams Catering Butchers Limited, the ultimate parent company of the group.
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