Company registration number 13986957 (England and Wales)
THE BLUE SEA FOOD GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
THE BLUE SEA FOOD GROUP LIMITED
COMPANY INFORMATION
Directors
Mr T R Bartlett
(Appointed 18 March 2022)
Mr D Markham
(Appointed 18 March 2022)
Ms D Spencer
(Appointed 18 March 2022)
Company number
13986957
Registered office
Unit 20
Torbay Business Park
Paignton
Devon
TQ4 7HP
Auditor
Darnells Audit Limited
Quay House
Quay Road
Newton Abbot
Devon
TQ12 2BU
THE BLUE SEA FOOD GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 38
THE BLUE SEA FOOD GROUP LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2023
- 1 -

The directors present the strategic report for the period ended 30 April 2023.

Review of the business
The directors consider that the key performance indicators are Turnover, Gross margin, Earnings before interest, tax, depreciation and amortisation (EBITDA) and Net assets. Together these demonstrate the financial performance and strength of the group. An overview of these indicators for the current period is given below:
2023
£
Turnover
13,694,930
Gross profit
4,528,406
Gross margin
33.07%
EBITDA
496,541
Net assets
743,509

During the period the group achieved sales of £13.7m, which are consistent with the sales of The Blue Sea Food Company Limited, the main trading subsidiary, for the 12 months to 30 April 2022 (prior to its acquisition by the group).

 

The group’s gross profit margin was lower than expected at 33.1% as a result of higher raw material costs. The ultimate cause for this was the Ukraine war which saw fuel prices increase, with average price of crab paid increasing by 9.9% per kg. In addition to this the group had increased wages and salaries with a tightening labour market and the National Minimum Wage increase from £8.91 to £9.50 (6.6%) in April 2022 and to £10.42 (9.7%) in April 2023.

 

As a result of the above, the group's EBITDA was only just under £0.5m.

 

The group's retained loss for the year is £2.1m, after paying dividends of £197,851 and impairing the investment in the main subsidiary.

 

Principal risks and uncertainties

The group's principal operational risks include food hygiene, health and safety legislation, employment law and data protection. Food hygiene and health and safety risks includes ensuring the correct procedures are completed when preparing food which is monitored by the food hygiene officer and external audits and inspections. The management of employment law risks includes ensuring that employees are eligible to work in the UK and the correct procedures are followed when employing an employee. The data protection risk includes safe storage of data backup's off-site at a secure location.

 

The group manages price fluctuations, together with pressures on supply and demand, through tight control of both prices paid to suppliers and the margin charged to customers. The group continues to diversify its supplier and customer bases and to enter into supply contracts with suppliers to provide further resilience against market uncertainties.

 

Going concern:

As detailed in notes 19 and 30 to the financial statements the group is party to an agreement to purchase and sell a fishing boat, on behalf of a UK based fishing company.

 

The UK shipbuilding agent managing the contract to build the above-mentioned shipping vessels was placed in liquidation in June 2022 in controversial circumstances. The directors are working with all parties to come to a successful conclusion on the project and to minimise any losses. At the moment the directors are not anticipating any losses to the group but do anticipate that the UK based fishing company will take much longer to repay all funds, possibly as long as ten years. The money applied to this project has put pressure on the ability to stay within agreed bank facilities, especially when sales are subdued due to the cost of living crisis.

 

The group prepares forecasts based on expected income and expenditure. The directors have based their going concern conclusion upon these forecasts. These forecasts have tried to take account of the following risks and uncertainties:

THE BLUE SEA FOOD GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 2 -

 

The group is currently operating below forecasts, showing that the seasonal reduction in bank overdraft facility will be a challenge. The group operates a seasonal business, where large values of stock are required for the out of season sales. The current forecasts show that without a continued overdraft facility at a reasonable level, these stock purchases will not currently take place. This would lead to a reduction and loss of the out of season market.

 

 

 

 

 

 

We draw your attention to Note 1.5 to the financial statements which details the material uncertainties with respect to going concern.

Future developments

The business had continued its recovery after Covid-19 however the worldwide reduction in the economy during 2023 has impacted the business, however as the business moves into 2024 we are seeing a recovery from this position with sales exceeding those of the prior year.

 

The average price of crab paid has seen a reduction and stabilisation as fuel prices have remained more consistent. The factory continues to face challenges with rising costs and in particular with electricity which have almost doubled on the prior year albeit a decrease in the future financial periods is now expected. That on top of the National Minimum Wage increases both at 1 April 2023 and the future 2024 increases will put more strain on the business.

 

The directors are confident that the future economic outlook looks good, and the management team have worked hard to expand on the business aims of increasing accessibility of crab into the markets having recently won contracts to supply crab meats in UK retail.

 

The business will continue to support sustainability of crab fishing and are actively involved in the process of setting up a Fisheries Improvement Plan both locally and in the North Sea.

 

Energy and carbon report

The total amount of Carbon footprint for the business for the year ended 30 April 2023 for all parts of the business including Direct, Indirect and Other Direct Emissions (Scope 3) was 1,209 tonnes CO2e (2022: 2,575t CO2e). The main savings have been made in the businesses decision to stop supplying Live Crab, by airfreight, to Asia.

THE BLUE SEA FOOD GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 3 -

On behalf of the board

Mr D Markham
Director
31 January 2024
THE BLUE SEA FOOD GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2023
- 4 -

The directors present their annual report and financial statements for the period ended 30 April 2023.

Principal activities

The company was incorporated on 18 March 2022, and acquired its subsidiaries on 1 May 2022. Its principal activity during the period was that of an investment holding company.

 

The principal activities of the subsidiary companies are set out in note 16 to the financial statements.

Results and dividends

The results for the period are set out on page 10.

Ordinary dividends were paid amounting to £197,851. The directors do not recommend payment of a further dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mr T R Bartlett
(Appointed 18 March 2022)
Mr D Markham
(Appointed 18 March 2022)
Ms D Spencer
(Appointed 18 March 2022)
Financial instruments

The group's principal financial instruments comprise bank balances, trade debtors, loans by the group, trade creditors, a confidential invoice discounting facility and loans to the group by related parties and others. The main purpose of these instruments is to raise funds for the group's operations and to finance its operations.

 

Due to the nature of the financial instruments used by the group, there is no exposure to price risk. Foreign currency risk is managed by holding bank balances in Euros and US dollars. The group does look at the use of forward contracts in order to minimise exchange risk and will review the use of these on a regular basis.

 

The directors' approach to managing other risks applicable to the financial instruments concerned is shown below:

 

In respect of bank balances, the liquidity risk is managed by maintaining sufficient cash reserves to cover planned expenditure in the foreseeable future. Subject to the expected current reduction in overdraft facility, as mentioned in the strategic report.

 

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Liquidity risk is managed by use of a confidential invoice discounting facility.

 

Trade creditors' liquidity risk is managed by ensuring that sufficient funds are available to meet amounts due.

 

Loans by the group are unsecured, with interest charged at market rates. The loans are repayable after more than one year.

 

Loans to the group by related parties and others are unsecured and bear interest at market rates. The loans are repayable after more than one year.

Auditor

Darnells Audit Limited were appointed as auditor to the group during the period, and are deemed to be reappointed under section 487(2) of the Companies Act 2006.

 

THE BLUE SEA FOOD GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 5 -
Statement of directors' responsibilities

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr D Markham
Director
31 January 2024
THE BLUE SEA FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE BLUE SEA FOOD GROUP LIMITED
- 6 -
Opinion

We have audited the financial statements of The Blue Sea Food Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 April 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.

Material uncertainties relating to going concern

We draw attention to note 1.5 to the financial statements, which indicates that the impact of the coronavirus pandemic caused unprecedented restrictions on the customer base of The Blue Sea Food Company Limited, the main trading subsidiary, and has significantly impacted on the group's finances. Debt was taken on to support the trading subsidiary through the pandemic, but the group's turnover and profit are expected to fall in the 12 months to 30 April 2024. In addition, the commitment to help finance the construction of a new fishing vessel and the opening of a new restaurant have put additional financial pressures on the group by increasing debt just as interest rates are rising.

As stated in note 1.5 to the financial statements, these events or conditions, along with the other matters set out in note 19 and note 30 to the financial statements, indicate that material uncertainties exist that may cast significant doubt upon the group’s ability to continue as a going concern. Our opinion is not modified in respect of these matters.

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. Our evaluation of the directors' assessment of the group's ability to continue to adopt the going concern basis of accounting included:

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

THE BLUE SEA FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE BLUE SEA FOOD GROUP LIMITED
- 7 -

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

THE BLUE SEA FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE BLUE SEA FOOD GROUP LIMITED
- 8 -

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 risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentation or through collusion.

 

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

 

 

The primary responsibility for the prevention and detection of fraud rests with those charged with governance of the group and management.

We assessed the susceptibility of the group's financial statements to material misstatement, including how fraud might occur, by:

 

 

We evaluated the conditions in the context of incentives and/or pressure to commit fraud, considering the opportunity to commit fraud and the potential rationalisation of the fraudulent act.

Based on this understanding, we designed our audit procedures to detect material misstatements in respect of irregularities, including fraud, and to identify non-compliance with the laws and regulations above, as follows:

 

 

We corroborated our enquiries through inspection of supporting documentation and records, as well as reviewing correspondence with regulatory bodies where available.

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.

THE BLUE SEA FOOD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE BLUE SEA FOOD GROUP LIMITED
- 9 -

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.

Sean Murphy (Senior Statutory Auditor)
For and on behalf of Darnells Audit Limited
31 January 2024
Statutory Auditor
Quay House
Quay Road
Newton Abbot
Devon
TQ12 2BU
THE BLUE SEA FOOD GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 APRIL 2023
- 10 -
Year
ended
30 April
2023
Notes
£
Turnover
3
13,694,930
Cost of sales
(9,166,524)
Gross profit
4,528,406
Distribution costs
(915,086)
Administrative expenses
(5,324,605)
Other operating income
38,613
Operating loss
4
(1,672,672)
Interest receivable and similar income
8
49,596
Interest payable and similar expenses
9
(276,799)
Loss before taxation
(1,899,875)
Tax on loss
10
7,968
Loss for the financial period
(1,891,907)
(Loss)/profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
THE BLUE SEA FOOD GROUP LIMITED
GROUP BALANCE SHEET
AS AT 30 APRIL 2023
30 April 2023
- 11 -
2023
Notes
£
£
Fixed assets
Goodwill
13
246,075
Other intangible assets
13
2,958
Total intangible assets
249,033
Tangible assets
14
1,956,035
2,205,068
Current assets
Stocks
18
2,080,445
Debtors falling due after more than one year
19
1,389,939
Debtors falling due within one year
19
1,116,400
Cash at bank and in hand
372,658
4,959,442
Creditors: amounts falling due within one year
20
(4,037,670)
Net current assets
921,772
Total assets less current liabilities
3,126,840
Creditors: amounts falling due after more than one year
21
(2,180,466)
Provisions for liabilities
Deferred tax liability
24
202,865
(202,865)
Net assets
743,509
Capital and reserves
Called up share capital
27
267
Other reserves
28
2,833,000
Profit and loss reserves
(2,089,758)
Total equity
743,509

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 31 January 2024 and are signed on its behalf by:
31 January 2024
Mr D Markham
Director
Company registration number 13986957 (England and Wales)
THE BLUE SEA FOOD GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 30 APRIL 2023
30 April 2023
- 12 -
2023
Notes
£
£
Fixed assets
Investments
15
1,206,099
Capital and reserves
Called up share capital
27
267
Other reserves
28
2,833,000
Profit and loss reserves
(1,627,168)
Total equity
1,206,099

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,429,317.

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 31 January 2024 and are signed on its behalf by:
31 January 2024
Mr D Markham
Director
Company registration number 13986957 (England and Wales)
THE BLUE SEA FOOD GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2023
- 13 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 18 March 2022
-
-
-
-
Period ended 30 April 2023:
Loss and total comprehensive income
-
-
(1,891,907)
(1,891,907)
Issue of share capital
27
267
-
-
267
Dividends
11
-
-
(197,851)
(197,851)
Transfers
-
2,833,000
-
2,833,000
Balance at 30 April 2023
267
2,833,000
(2,089,758)
743,509
THE BLUE SEA FOOD GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2023
- 14 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 18 March 2022
-
-
-
-
Period ended 30 April 2023:
Profit and total comprehensive income
-
-
(1,429,317)
(1,429,317)
Issue of share capital
27
267
-
-
267
Dividends
11
-
-
(197,851)
(197,851)
Transfers
-
2,833,000
-
2,833,000
Balance at 30 April 2023
267
2,833,000
(1,627,168)
1,206,099
THE BLUE SEA FOOD GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 APRIL 2023
- 15 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
31
859,883
Interest paid
(276,799)
Net cash inflow/(outflow) from operating activities
583,084
Investing activities
Purchase of intangible assets
(4,040)
Purchase of tangible fixed assets
(37,318)
Proceeds from disposal of tangible fixed assets
9,615
Purchase of subsidiaries, net of cash acquired
31
(1,133,710)
Interest received
49,596
Income taxes refunded
73,231
Net cash used in investing activities
(1,042,626)
Financing activities
Proceeds from issue of shares
267
Proceeds from borrowings
120,231
Repayment of borrowings
(123,431)
Repayment of bank loans
(332,649)
Proceeds of finance lease obligations
67,500
Repayment of finance lease obligations
(208,947)
Dividends paid to equity shareholders
(197,851)
Net cash used in financing activities
(674,880)
Net (decrease)/increase in cash and cash equivalents
(1,134,422)
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
(1,134,422)
Relating to:
Cash at bank and in hand
372,658
Bank overdrafts & factoring included in creditors payable within one year
(1,507,080)

The notes on pages 16 to 38 form part of these financial statements.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
- 16 -
1
Accounting policies
Company information

The Blue Sea Food Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 20, Torbay Business Park, Paignton, Devon, TQ4 7HP.

 

The group consists of The Blue Sea Food Group Limited and all of its subsidiaries.

1.1
Reporting period

The company has made a change to its reporting period end from 31 March to 30 April to align its period end with its trading subsidiaries.

1.2
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.

1.3
Business combinations

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

 

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

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company The Blue Sea Food Group Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 30 April 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 17 -
1.5
Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future. However, the directors are aware of the following certain material uncertainties which may cause doubt on the group's ability to continue as a going concern:

 

 

The group is currently operating below forecasts, showing that the seasonal reduction in bank overdraft facility will be a challenge. The group operates a seasonal business, where large values of stock are required for the out of season sales. The current forecasts show that without a continued overdraft facility at a reasonable level, these stock purchases will not currently take place. This would lead to a reduction and loss of the out of season market.

 

 

 

 

 

 

The impact of the coronavirus pandemic caused unprecedented restrictions on the group’s customer base, and has significantly impacted on its finances. As a result, debt was taken on to support the group through the pandemic. In addition, the commitment to help finance the acquisition of a boat and the opening of a new restaurant have put additional financial pressures on the group. The monies applied to these projects has put pressure on the group's ability to stay within agreed bank facilities, especially when sales are subdued.

 

The bank may extend the facility if the fundraising program is making good progress. But by definition, fundraising does take time and there can be no certainties as to the outcome.

As stated in note 30 to the financial statements, the group is party to an agreement to build a fishing vessel in Vietnam. Included within other debtors is an amount due from the end user for the build costs so far. This whole contract has been very tortuous, and negotiations are still ongoing to resolve this situation. The directors have examined various scenarios to extradite the group from the situation, however there is a material uncertainty on how and when the situation can be resolved. One option would be to sell the boat as it now is. The more favoured option is to complete the original project, but the group will be required to commit significant funds upfront and would be reliant upon appropriate finance being made available.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 18 -

In view of the steps being taken to manage the situation, current trading and the relationship with the group’s bankers and other stakeholders, the directors believe that the going concern basis is appropriate.

 

The financial statements do not contain any adjustments that may be required if either the bank overdraft is not renewed at an appropriate level, or if the group’s future trading does not meet its forecasts, or stakeholders do not continue to provide financial support to the group.

1.6
Turnover

Turnover represents amounts receivable for the sale of crab seafood and restaurant fees recognised at the fair value of the consideration received or receivable for goods and services 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.

1.7
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.8
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 of 5 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.

1.9
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.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Software
33% on a straight-line basis
1.10
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.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 19 -

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:

Leasehold improvements
over the term of the lease - between 3 and 15 years on a straight-line basis
Plant and equipment
10% per annum straight-line basis
Factory equipment
Between 10% and 20% per annum on a straight-line basis
Office and IT equipment
33% per annum on a straight-line basis
Motor vehicles
25% per annum on a straight-line basis

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.

1.11
Fixed asset investments

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

 

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

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

1.12
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, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 20 -
1.13
Stocks

Stocks are stated at the lower of cost and net realisable value. 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. The group uses a standard costing model to determine the cost which is reviewed regularly and updated where significant changes occur within the assumptions made.

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.

1.14
Financial instruments
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.

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.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 21 -
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.

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.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 22 -
1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

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 profit or loss 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 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 leased asset are consumed.

1.20
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.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 23 -
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.

Valuation of stock

The carrying value of stock held is based on a costing model which enables relevant labour and overhead costs to be taken into account in arriving at the value of stock held for sale. It also takes into account different crab meat prices, which fluctuate depending on the time of year. 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 carrying value of stock at 30 April 2023 is £2,080,445.

Contingent liabilities

As mentioned in note 30 to the financial statements, it is intended that the group will become party to an agreement to fund the build of three fishing vessels. Note 30 to the financial statements is based on an estimated future selling price of the vessels in both their current condition, and completed condition. The estimates and associated assumptions are based on historical experience, valuations and other factors that are considered to be relevant. Actual results may differ from these estimates.

Goodwill arising on the acquisition of subsidiaries

The goodwill arising on the acquisition of The Blue Sea Food Company Limited has been impaired as the result of an estimated valuation prepared after the year end. Such valuations, by their nature, use estimation techniques that cannot be certain until that value is achieved. At 30 April 2023 the goodwill arising on the acquisition of The Blue Sea Food Company Limited has been written down by £1,627,168 to £246,075 (see note 4 to the financial statements).

3
Turnover and other revenue

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

2023
£
Turnover analysed by class of business
Sale of goods
13,656,853
Sale of services
38,077
13,694,930
2023
£
Turnover analysed by geographical market
UK
8,207,747
EU
3,573,898
Asia
1,768,631
Rest of world
144,654
13,694,930
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
3
Turnover and other revenue
(Continued)
- 24 -
2023
£
Other revenue
Interest income
49,596
Grants received
38,613
4
Operating loss
2023
£
Operating loss for the period is stated after charging/(crediting):
Exchange gains
(298)
Research and development costs
1,142
Government grants
(38,613)
Depreciation of owned tangible fixed assets
298,188
Depreciation of tangible fixed assets held under finance leases
89,478
Profit on disposal of tangible fixed assets
(9,151)
Amortisation of intangible assets
66,143
Impairment of intangible assets
1,715,404
Operating lease charges
293,843

Exceptional items:

The impairment of intangible assets represents the write down of the goodwill arising on the acquisition by the group of The Blue Sea Food Company Limited of £1,627,168 and The Crab & Hammer Limited of £88,236 (see note 12 to the financial statements).

5
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
6,000
Audit of the financial statements of the company's subsidiaries
15,000
21,000
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 25 -
6
Employees

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

Group
Company
2023
2023
Number
Number
Directors
3
3
Production
134
-
Sales
3
-
Administration
13
-
Total
153
3

Their aggregate remuneration comprised:

Group
Company
2023
2023
£
£
Wages and salaries
3,399,592
-
0
Social security costs
294,009
-
Pension costs
57,440
-
0
3,751,041
-
7
Directors' remuneration
2023
£
Remuneration for qualifying services
37,400
8
Interest receivable and similar income
2023
£
Interest income
Other interest income
49,596
2023
Investment income includes the following:
£
Interest on financial assets not measured at fair value through profit or loss
49,596
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 26 -
9
Interest payable and similar expenses
2023
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
25,611
Interest on invoice finance arrangements
60,860
Other interest on financial liabilities
86,100
172,571
Other finance costs:
Interest on finance leases and hire purchase contracts
20,050
Other interest
84,178
Total finance costs
276,799
10
Taxation
2023
£
Current tax
UK corporation tax on profits for the prior period
(15,004)
Deferred tax
Origination and reversal of timing differences
7,036
Total tax credit
(7,968)

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

2023
£
Loss before taxation
(1,899,875)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.49%
(370,286)
Tax effect of expenses that are not deductible in determining taxable profit
345,794
Unutilised tax losses carried forward
30,524
Adjustments in respect of prior years
(15,004)
Permanent capital allowances in excess of depreciation
1,004
Taxation credit
(7,968)
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 27 -
11
Dividends
2023
Recognised as distributions to equity holders:
£
Final paid
197,851

The dividends above were all paid to the directors and their spouses.

12
Impairments

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

2023
Notes
£
In respect of:
Goodwill
13
1,715,404
Recognised in:
Administrative expenses
1,715,404

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

 

The fair value of the investment in subsidiaries has been impaired in the light of relatively poor financial performance since acquisition. The valuation used for The Blue Sea Food Company Limited was provided post year end, and is based on an investment proposal created in January 2024.

 

13
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 18 March 2022
-
0
-
0
-
0
Additions
2,022,998
7,582
2,030,580
At 30 April 2023
2,022,998
7,582
2,030,580
Amortisation and impairment
At 18 March 2022
-
0
-
0
-
0
Amortisation charged for the period
61,519
4,624
66,143
Impairment losses
1,715,404
-
0
1,715,404
At 30 April 2023
1,776,923
4,624
1,781,547
Carrying amount
At 30 April 2023
246,075
2,958
249,033
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
13
Intangible fixed assets
(Continued)
- 28 -
Company
The company had no intangible fixed assets at 30 April 2023.

More information on impairment movements in the period is given in note 12 to the financial statements.

14
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Factory equipment
Office and IT equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 18 March 2022
-
0
-
0
-
0
-
0
-
0
-
0
Additions
1,132,822
728,949
289,407
18,444
174,543
2,344,165
Disposals
-
0
-
0
(1,856)
-
0
-
0
(1,856)
At 30 April 2023
1,132,822
728,949
287,551
18,444
174,543
2,342,309
Depreciation and impairment
At 18 March 2022
-
0
-
0
-
0
-
0
-
0
-
0
Depreciation charged in the period
130,549
123,500
88,985
9,282
35,350
387,666
Eliminated in respect of disposals
-
0
-
0
(1,392)
-
0
-
0
(1,392)
At 30 April 2023
130,549
123,500
87,593
9,282
35,350
386,274
Carrying amount
At 30 April 2023
1,002,273
605,449
199,958
9,162
139,193
1,956,035
Company
The company had no tangible fixed assets at 30 April 2023.

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
2023
£
£
Plant and equipment
207,921
-
0
Factory equipment
110,790
-
0
Motor vehicles
120,146
-
0
438,857
-
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 29 -
15
Fixed asset investments
Group
Company
2023
2023
Notes
£
£
Investments in subsidiaries
16
-
0
1,206,099
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 18 March 2022
-
Additions
2,833,267
At 30 April 2023
2,833,267
Impairment
At 18 March 2022
-
Impairment losses
1,627,168
At 30 April 2023
1,627,168
Carrying amount
At 30 April 2023
1,206,099

The fair value of investment in subsidiaries was impaired due to relatively poor financial performace in the period since acquisition. The valuation used in these accounts was provided post year end and based on an investment proposal created in January 2024 for the main trading subsidiary.

16
Subsidiaries

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

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
The Blue Sea Food Company Limited
Unit 20 Torbay Business Park, Paignton, Devon TQ4 7HP
Crab and seafood processing
Ordinary
100.00
The Crab & Hammer Limited
Unit 20 Torbay Business Park, Paignton, Devon TQ4 7HP
Cafe, restaurant and development kitchen
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
The Blue Sea Food Company Limited
488,889
(211,632)
The Crab & Hammer Limited
(184,675)
(96,572)
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 30 -
17
Financial instruments
Group
Company
2023
2023
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost:
Other debtors - loans
1,389,939
-
Measured at undiscounted amount receivable:
Trade and other debtors
1,040,324
-
Carrying amount of financial liabilities
Measured at amortised cost
Bank loans and overdrafts
(2,649,900)
-
Other borrowings
(1,470,231)
-
Obligations under hire purchase contracts
(360,159)
-
Measured at undiscounted amount payable:
Trade and other creditors
(1,415,752)
-
18
Stocks
Group
Company
2023
2023
£
£
Raw materials and consumables
7,534
-
Finished goods and goods for resale
2,072,911
-
0
2,080,445
-
19
Debtors
Group
Company
2023
2023
Amounts falling due within one year:
£
£
Trade debtors
1,027,651
-
0
Other debtors
41,271
-
0
Prepayments and accrued income
47,478
-
0
1,116,400
-
Amounts falling due after more than one year:
Other debtors
1,389,939
-
0
Total debtors
2,506,339
-
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
19
Debtors
(Continued)
- 31 -

The value of trade debtors which are secured under a confidential invoice discounting agreement is £890,005. The cash advanced by the bank under the agreement is included within creditors falling due within one year.

 

Other debtors falling due after more than one year:

Prior to its acquisition by the group, in 2019 The Blue Sea Food Company Limited entered into a loan agreement with a UK based fishing company and a UK based agent to finance the construction of a fishing boat on behalf of the fishing company.

 

At 30 April 2023 the loan due from the UK based fishing company included in Other Debtors falling due after more than one year amounted to £1,101,771 as follows:

 

In addition, The Blue Sea Food Company Limited has also advanced £288,168 at 30 April 2023 to a related party in connection with the acquisition of a further boat from the same shipbuilder. A commercial rate of interest is being charged on the loans, hence the loans are not being discounted.

At the current time the directors do not anticipate any losses to the group arising from these transactions - see note 30 to the financial statements, but it is likely that the UK based shipping company will take much longer to repay all funds than originally envisaged, possibly as long as ten years.

20
Creditors: amounts falling due within one year
Group
Company
2023
2023
Notes
£
£
Bank loans and overdrafts
22
1,845,058
-
0
Obligations under finance leases
23
170,232
-
0
Other borrowings
22
439,500
-
0
Trade creditors
1,141,264
-
0
Other taxation and social security
123,304
-
Government grants
25
43,824
-
0
Other creditors
87,661
-
0
Accruals and deferred income
186,827
-
0
4,037,670
-
0

Obligations under finance leases and hire contracts are secured on the assets acquired.

 

Bank loans and overdrafts include £716,973 (2022: £770,395) for amounts owed under a confidential invoice discounting agreement which is secured on the trade debts of the group (see note 19 to the financial statements) and is repayable on demand. Other amounts owed to the bank are secured by way of a fixed and floating charge over the group's assets.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 32 -
21
Creditors: amounts falling due after more than one year
Group
Company
2023
2023
Notes
£
£
Bank loans and overdrafts
22
804,842
-
0
Obligations under finance leases
23
189,927
-
0
Other borrowings
22
1,030,731
-
0
Government grants
25
154,966
-
0
2,180,466
-

Obligations under finance leases and hire contracts are secured on the assets acquired.

Amounts included above which fall due after five years are as follows:
Payable other than by instalments
150,000
-
22
Loans and overdrafts
Group
Company
2023
2023
£
£
Bank loans
1,142,820
-
0
Bank overdrafts
1,507,080
-
0
Other loans
1,470,231
-
0
4,120,131
-
Payable within one year
2,284,558
-
0
Payable after one year
1,835,573
-
0

The bank loans and overdraft are secured by fixed and floating charges over the assets of the group and the company. The bank loans have additional security in the form of personal guarantees from the directors.

 

Interest is charged on bank loans and overdrafts as follows:

 

Other loans comprise loans from related parties of £1,470,231. The loans are unsecured, with repayments on each loan restricted to £50,000 in any 6-month period. Interest is charged at a rate of between 5% and 6% per annum. The amount of these loans falling due after more than 5 years is set out in note 21 to the financial statements.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 33 -
23
Finance lease obligations
Group
Company
2023
2023
£
£
Future minimum lease payments due under finance leases:
Within one year
170,232
-
0
In two to five years
189,927
-
0
360,159
-

Finance lease payments represent rentals payable by the company or group 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

24
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
2023
Group
£
Accelerated capital allowances
202,865
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the period:
£
£
Asset at 18 March 2022
-
-
Charge to profit or loss
7,036
-
Other
195,829
-
Liability at 30 April 2023
202,865
-

The deferred tax liability set out above is expected to reverse within the foreseeable future and relates to accelerated capital allowances that are expected to mature within the same period.

 

The other movement represents the deferred tax liability of The Blue Sea Food Company Limited at the date that company was acquired by the group.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 34 -
25
Government grants
Group
Company
2023
2023
£
£
Arising from government grants
198,790
-

Deferred income is included in the financial statements as follows:

Current liabilities
43,824
-
0
Non-current liabilities
154,966
-
0
198,790
-
26
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
57,440

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

27
Share capital
Group and company
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
A Ordinary Shares of 1p each
13,800
138
B Ordinary Shares of 1p each
6,400
64
C Ordinary Shares of 1p each
6,400
64
26,600
266
2023
2023
Preference share capital
Number
£
Issued and fully paid
Preference Shares of £1 each
1
1
Preference shares classified as equity
1
Total equity share capital
267
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
27
Share capital
(Continued)
- 35 -

During the period the company issued 13,800 A Ordinary shares of 1p each, 6,400 B Ordinary shares of 1p each and 6,400 C Ordinary shares of 1p each fully paid, for a premium of £2,833,000 which has been credited to a "Merger reserve" - see note to the financial statements.

 

Ordinary shares:

All of the ordinary shares rank pari passu, and are entitled to vote, receive dividend payments, and are entitled to participate in a distribution arising from a winding up of the company.

 

Preference shares:

Each share is entitled to a dividend payment or any other distribution at the option of the directors, not permitted to vote, and not entitled to participate in a distribution arising from a winding up of the company.

28
Other reserves

Other reserves of £2,833,000 represent a "Merger reserve" arising from a fair value adjustment to the consideration on the acquisition of The Blue Sea Food Company Limited on 1 May 2022.

29
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
2023
£
£
Within one year
244,180
-
Between two and five years
959,720
-
In over five years
464,903
-
1,668,803
-
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 36 -
30
Events after the reporting date

Contracts for the construction of 3 fishing vessels

As mentioned in note 19 to the financial statements, the group has a long-term debtor balance due from an unconnected UK fishing company. This arose from a contract by The Blue Sea Food Company, the main trading subsidiary company, to build a fishing boat with a UK based shipbuilding agent, which has gone into liquidation.

The directors have been negotiating with the shipyard and liquidator to resolve the issues to everyone’s benefit. The negotiations have been long and tortuous, but at the current time the expectation is that the group will become party to a new agreement, as part of which:

 

There are a number of uncertainties to the contracts, and in order to manage the risk only one boat at a time will be completed.

In addition to the costs already incurred, the liability before storage fees and interest relating to the 3 vessels, which is subject to the lien exercised over the hulls by the shipyard, amounts to a further £506,660 for each vessel. With appropriate finance in place to enable the construction of all 3 boats to proceed, the directors believe that the net realisable value of each boat is such that no loss will arise on its completion and sale.

All the parties involved in the contract are currently actively pursuing finance arrangements to complete the vessels. In the event that any party involved withdraws from the agreement for any reason, the group will retain title to the vessels. The group will then seek to sell the vessels to recover the debts owed to it in full.

THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
- 37 -
31
Cash generated from group operations
2023
£
Loss for the period after tax
(1,891,907)
Adjustments for:
Taxation credited
(7,968)
Finance costs
276,799
Investment income
(49,596)
Gain on disposal of tangible fixed assets
(9,151)
Amortisation and impairment of intangible assets
1,781,547
Depreciation and impairment of tangible fixed assets
387,666
Movements in working capital:
Increase in stocks
(220,607)
Decrease in debtors
318,874
Increase in creditors
274,226
Cash generated from operations
859,883

Non-cash items in investing activities

Plant and machinery of £195,663 acquired during the period under a hire purchase contract has been excluded from the Statement of Cash Flows.

 

Purchase of subsidiary undertakings

The effect of the acquisition of the subsidiary companies during the period was as follows:

 

Total
The Blue Sea Food Company Limited
The Crab & Hammer Limited
£
£
£
Intangible fixed assets
3,542
3,542
-
Tangible fixed assets
2,111,184
2,107,144
4,040
Stock
1,859,838
1,852,978
6,860
Debtors
2,834,320
2,830,512
3,808
Cash at bank and in hand
249,586
240,239
9,347
Bank overdraft
(1,383,029)
(1,383,029)
-
Other creditors falling due within one year
(2,226,475)
(2,114,317)
(112,158)
Creditors falling due after more than one year
(2,638,697)
(2,638,697)
-
Net assets acquired
810,269
898,372
(88,103)
Goodwill arising on the acquisitions
2,022,998
1,934,762
88,236
Purchase consideration
2,833,267
2,833,134
133
THE BLUE SEA FOOD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
31
Cash generated from group operations
(Continued)
- 38 -
Total
The Blue Sea Food Company Limited
The Crab & Hammer Limited
£
£
£
Purchase of subsidiaries (net of bank and cash balances acquired)
Purchase consideration - as above
2,833,267
2,833,134
133
Less: Fair value adjustment to consideration for acquisition
(2,833,000)
(2,833,000)
-
Purchase consideration satisfied by cash
267
134
133
Less: Bank and cash balances acquired
(249,586)
(240,239)
(9,347)
Add: Bank overdraft acquired
1,383,029
1,383,029
-
Cash flow
1,133,710
1,142,924
(9,214)
The purchase of subsidiaries contributed to the group's cash flows as follows:
Total
The Blue Sea Food Company Limited
The Crab & Hammer Limited
£
£
£
Contribution to/(utilisation of) group's Net operating cash flow
736,452
926,640
(190,188)
Utilisation of group's Net cash used in investing activities
(371,030)
(371,030)
-
(Utilisation of)/Contribution to group's Net cash used in financing activities
(162,833)
(356,053)
193,220
32
Analysis of changes in net debt - group
18 March 2022
Cash flows
30 April 2023
£
£
£
Cash at bank and in hand
-
372,658
372,658
Bank overdrafts and factoring
-
(1,507,080)
(1,507,080)
-
(1,134,422)
(1,134,422)
Borrowings excluding overdrafts
-
(2,613,051)
(2,613,051)
Obligations under finance leases
-
(360,159)
(360,159)
-
(4,107,632)
(4,107,632)
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