Company registration number 01019356 (England and Wales)
CLARENCE COURT EGGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
CLARENCE COURT EGGS LIMITED
COMPANY INFORMATION
Director
Mr A D Gott
Secretary
Mr S G Morse
Company number
01019356
Registered office
Lacock Green
Corsham Road
Lacock
Chippenham
SN15 2LZ
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
CLARENCE COURT EGGS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4
Director's responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
CLARENCE COURT EGGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The director presents the strategic report for the year ended 30 September 2023.
Fair review of the business
The principal activity of the company continues to be the sale of speciality and premium eggs. The company works closely with its farming partners to collect, grade and package free range and organic eggs. We collect and deliver daily from hen houses from across the country to many of the UK’s most exclusive restaurants and hotels, as well as first class egg products to some of the biggest names in food retail and food manufacturing.
Every discerning consumer who selects our eggs has peace of mind in knowing they are produced in the UK to the rigorous BEIC “British Lion” quality standards. By working in collaboration with our producers, wholesalers, and top retailers, we can rapidly identify and satisfy the ever-changing demands of those consumers.
The company experienced strong sales growth in the year with the turnover increasing to £58.2m up from £50.9m in 2022. Profit for the year was £1.7m (2022: £0.2m) reflecting sales price recovery in the market following inflationary pressures in the previous year.
The Clarence Court name continues to be a strong brand with strong recognition and has shown significant growth in sales during the year. The director considers the company to be in a good financial position with net assets of £21.3m at the year end (2022: £19.5m).
The company has continued to invest in staff at all levels. We believe this investment to be important in growing the sales and profitability in future years.
The company will continue to work at strengthening the business through protecting and developing the Clarence Court brand, while focusing on customer and consumer needs. This remains a key part of our strategy and, along with increased marketing activity, we will ensure we maximise its growth potential.
Principal risks and uncertainties
A key challenge to the business is the ability to meet the demands of customers by having a balanced egg supply. The company is very aware of current market share and demand for free range / organic egg and continues to manage the recruitment of new producers to appropriately meet future demand.
Raw Material & Commodity Risk
The volatility of commodity prices, particularly wheat and soya, is a constant challenge for the Group. In addition to reviewing the market trends we work with both our suppliers and customers to minimise the impact to any one party.
CLARENCE COURT EGGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Supply Risk
The risk to supply of egg has continues to be a key risk with Producers feeling the combined impact of Avian Influenza and cost increases in all aspects of their business, encompassing feed, energy, labour, transportation and in respect of new investment cost of materials and cost to raise finance. These have all compounded to impact the willingness of producers to invest in new infrastructure to house new free range or organic flocks, and with the impending move away from caged egg by retailers this is putting pressure on the supply of egg.
The group works closely with its producer base and is proactive in passing through price increases in partnership with our strategic retailers to ensure our supply base has a viable business to continue as long-term partners to us and our retailers.
The group holds our own farms and those of our producers to the highest standards of biosecurity to mitigate the risk of Avian Influenza. The group has insurance in place specifically against the risk of our own farms being directly impacted by Avian Influenza.
The company's activities expose it to financial risks including credit risk and liquidity risk.
Credit Risk
The company's principal financial assets are receivables and investments.
The company's credit risk is primarily attributable to its receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
Liquidity Risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company manages its working capital to ensure an excess of current assets over current liabilities.
Market Risk
The company recognises the risk of competition in a highly active market. Through investment in our products, facilities, and people we aim to meet or exceed the demands of our customers and the consumer.
Key performance indicators
Given the straightforward nature of the company's operations, the director is of the opinion that analysis using KPIs other than the financial results, is not necessary for an understanding of the development, performance or position of the business.
CLARENCE COURT EGGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
S172 statement
This statement by the director describes how the responsibilities under s172 (1) (a) to (f) of the Companies Act 2006 have been approached. References to employees below refer to those employed by fellow group companies.
The director:
considers having acted in good faith to promote the success of the company on behalf of the employees, clients and suppliers of the business in relation to matters set out in s172.
monitors and reviews strategic objectives against growth plans, and regular reviews at departmental and senior management team level are held across the business in the key areas being H&S, Financial performance, Operations, Human Resources and Risks and Opportunities.
considers H&S fundamental to the management of the business. Safe working practices that minimise environmental impact are key to the success of the business and vitally important for our stakeholders, the communities, and the environments we work in.
recognises and understands that it is important to keep employees informed of all matters concerning them and does this in several ways including site notices, meetings, verbal and written communications. The views and interests of employees are considered in consultation with them through working groups or forums, which evolve over time to meet the needs of all parties. The policy of the company is to consult and discuss with employees any issues that arise in accordance with relevant procedures or legislation.
The fundamental principle in the governance of the company is the clear, fair and trusting approach to all interactions with employees, clients and suppliers; this is reflected in the length of service of employees and management teams and the longevity of the relationships with our clients and suppliers.
The company's employees, clients and suppliers are critical to the success of the business and so it is recognised that engagement is an important aspect in those relationships.
The company has an equal opportunities policy and is committed to the principles within the policy in respect of all stakeholders.
The company has built, and continues to grow, the business on a reputation for delivering excellent customer service. The company, through the senior management team and employees, strives continuously to improve in every aspect of the products and services it provides, for the mutual benefit of all stakeholders.
The director, supported by the senior management team, has overall responsibility for delivering the company's strategy and values and for ensuring high standards of governance. The primary aim of the director is to promote the long-term sustainable success of the company to generate benefit for the stakeholders.
Mr A D Gott
Director
28 March 2024
CLARENCE COURT EGGS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 4 -
The director presents his annual report and financial statements for the year ended 30 September 2023.
Principal activities
The principal activity of the company continues to be the sale of specialised eggs.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr A D Gott
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
The company is not required to report its carbon emissions and energy use data because this information is disclosed, on a consolidated basis, in the financial statements of Stonegate Food Group Limited. Copies of these financial statements can be obtained from its registered office, Lacock Green, Corsham Road, Lacock, Chippenham, Wiltshire, SN15 2LZ.
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 financial risk management objectives and policies, 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.
On behalf of the board
Mr A D Gott
Director
28 March 2024
CLARENCE COURT EGGS LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 5 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
CLARENCE COURT EGGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARENCE COURT EGGS LIMITED
- 6 -
Opinion
We have audited the financial statements of Clarence Court Eggs Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 30 September 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
CLARENCE COURT EGGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLARENCE COURT EGGS LIMITED
- 7 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's 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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; 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 director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;
Enquires with management about any known or suspected instances of fraud;
Review of minutes of meetings of management;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls;
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;
Auditing the risk of fraud in revenue, including through the testing of income cut off at the period end and through sales transaction testing to provide comfort that revenue is completely stated in the financial statements.
CLARENCE COURT EGGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLARENCE COURT EGGS LIMITED
- 8 -
We identified the following areas as those most likely to have a material impact on the financial statements: health and safety legislation, food hygiene and safety regulations, and compliance with the UK Companies Act.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Joe Sullivan
Senior Statutory Auditor
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
28 March 2024
CLARENCE COURT EGGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
52 weeks
53 weeks
ended 30
ended 1
September
October
2023
2022
as restated
Notes
£
£
Turnover
4
58,215,201
50,925,870
Cost of sales
(42,858,316)
(38,293,408)
Gross profit
15,356,885
12,632,462
Distribution costs
(2,503,391)
(2,564,996)
Administrative expenses
(11,130,410)
(9,874,008)
Other operating income
13,415
22,646
Profit before taxation
1,736,499
216,104
Tax on profit
7
2,189
1,859
Profit for the financial year
1,738,688
217,963
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
CLARENCE COURT EGGS LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 10 -
30 September 2023
1 October 2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
21,189
31,593
Investment property
9
500,000
500,000
521,189
531,593
Current assets
Stocks
10
746,347
475,414
Debtors
11
27,654,491
26,091,504
Investments
12
471
Cash at bank and in hand
121,906
144,399
28,522,744
26,711,788
Creditors: amounts falling due within one year
14
(7,774,826)
(7,710,773)
Net current assets
20,747,918
19,001,015
Total assets less current liabilities
21,269,107
19,532,608
Provisions for liabilities
Deferred tax liability
15
3,422
5,611
(3,422)
(5,611)
Net assets
21,265,685
19,526,997
Capital and reserves
Called up share capital
16
1,000
1,000
Profit and loss reserves
21,264,685
19,525,997
Total equity
21,265,685
19,526,997
The financial statements were approved and signed by the director and authorised for issue on 28 March 2024
Mr A D Gott
Director
Company Registration No. 01019356
CLARENCE COURT EGGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 3 October 2021
1,000
19,308,034
19,309,034
Year ended 1 October 2022:
Profit and total comprehensive income for the year
-
217,963
217,963
Balance at 1 October 2022
1,000
19,525,997
19,526,997
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
1,738,688
1,738,688
Balance at 30 September 2023
1,000
21,264,685
21,265,685
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 12 -
1
Accounting policies
Company information
Clarence Court Eggs Limited is a private company limited by shares incorporated in England and Wales. The registered office is Lacock Green, Corsham Road, Lacock, Chippenham, SN15 2LZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
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:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The results of the company are included in the consolidated financial statements of Stonegate Food Group Limited, registered office address Lacock Green, Corsham Road, Lacock, Chippenham, Wiltshire, SN15 2LZ.
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern
Inflationary pressures from the impact of political instability and regional conflicts had a significant impact on many businesses in 2022-23 with food producers no less severely impacted than other sectors. The director believes that the company is well placed to minimise any impact.true
Management are continuously assessing the impact of inflationary pressures on customers and the supply chain with regular contact taking place throughout the supply chain to minimise any disruption. Where forward positions have been taken the company is protected from that cover in the short to medium term. Costs that are exposed to the current market volatility are being managed pro-actively through sympathetic engagement with our strategic suppliers and customers. The company remains confident of its ability to appropriately manage the short to medium term volatility being generated by these risks. Actions have also been taken in the past to enable the business to establish a strong financial platform, and this together with the current balance sheet strength positions the company well. Cash flow projections have been prepared for the company to cover at least twelve months following the approval of the financial statements, which indicate that the company will generate sufficient resources to meet their obligations as they fall due.
After considering the impact of the above, at the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and equipment
15% per annum
Motor vehicles
25% per annum
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
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account.
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
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.
1.8
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.
1.9
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.
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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
All of the company's assets are basic financial assets.
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 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 creditors, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
All of the company's liabilities are basic financial liabilities.
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
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.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
2
Change in accounting policy
The director has reviewed the categorisation of expenditure, and has decided to reclassify certain amounts to better reflect the activities of the company. The comparative figures have been restated to reflect this reclassification of costs, resulting in an increase in cost of sales of £6,533,832, an increase in distribution costs of £27,869, and a reduction in administrative expenses of £6,561,701. There is no other effect on the figures previously reported.
3
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of trade debtors
At each balance sheet date, management undertake an assessment of the recoverability of trade debtors based upon their knowledge of the customers, ageing of the balances outstanding and previous write off history. Where necessary, an impairment is recorded as a doubtful debt.
The actual level of debt collected may differ from the estimated level of recovery.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Accruals and provisions
At each balance sheet date, management undertake an assessment of the costs which have not yet been invoiced based upon their contractual arrangements and include appropriate provisions for these costs.
4
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Attributable to the principal activity
58,215,201
50,925,870
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
4
Turnover
(Continued)
- 18 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
58,215,201
50,925,870
5
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
5,450
4,750
Depreciation of owned tangible fixed assets
9,350
9,444
Loss on disposal of tangible fixed assets
1,054
-
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
7
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(1,927)
(1,413)
Changes in tax rates
(262)
(446)
Total deferred tax
(2,189)
(1,859)
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
7
Taxation
(Continued)
- 19 -
The actual credit 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
1,736,499
216,104
Expected tax charge based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
382,030
41,060
Tax effect of expenses that are not deductible in determining taxable profit
103
2,773
Effect of change in corporation tax rate
(262)
(446)
Group relief
(384,060)
(45,246)
Taxation credit for the year
(2,189)
(1,859)
Factors affecting future tax and charges
In March 2021 the Chancellor confirmed, in the budget, an increase in the corporation tax rate from 19% to 25%. The Finance Bill 2021 had its third reading on 24 May 2021 and became substantively enacted. There were announcements to the contrary in the mini-budget of October 2022, but these announcements have since been reversed and so the new rate of 25% remains substantively enacted. Therefore, the timing differences expected to reverse on or after 1 April 2023 have been accounted for at 25% and therefore deferred tax has been provided for at 25% (2022: 25%).
8
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 2 October 2022
278,801
29,793
308,594
Disposals
(8,000)
(8,000)
At 30 September 2023
270,801
29,793
300,594
Depreciation and impairment
At 2 October 2022
257,531
19,470
277,001
Depreciation charged in the year
6,459
2,891
9,350
Eliminated in respect of disposals
(6,946)
(6,946)
At 30 September 2023
257,044
22,361
279,405
Carrying amount
At 30 September 2023
13,757
7,432
21,189
At 1 October 2022
21,270
10,323
31,593
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
9
Investment property
2023
£
Fair value
At 2 October 2022 and 30 September 2023
500,000
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 30 September 2016 by Savills (UK) Limited Chartered Surveyors, who are not connected with the company. The valuation was made on a fair value basis.
At the year end, the director has reviewed the valuation, and believes that the valuation of the property in the accounts is a fair reflection of its current worth.
10
Stocks
2023
2022
£
£
Eggs, egg products and packaging
746,347
475,414
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,263,211
4,153,216
Amounts owed by group undertakings
23,316,446
21,885,241
Other debtors
14,659
22,930
Prepayments and accrued income
60,175
30,117
27,654,491
26,091,504
12
Current asset investments
2023
2022
£
£
Unlisted investments
471
13
Loans and overdrafts
2023
2022
£
£
Other loans
2,417,200
2,769,879
Payable within one year
2,417,200
2,769,879
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
13
Loans and overdrafts
(Continued)
- 21 -
The company meets its day-to-day working capital requirements through an invoice discounting facility (shown as other loans above), which is secured by a debenture over the assets of the company. The invoice discounting facility is repayable on demand.
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other loans
13
2,417,200
2,769,879
Trade creditors
2,330,841
2,121,155
Amounts due to group undertakings
2,183,534
2,185,712
Accruals and deferred income
843,251
634,027
7,774,826
7,710,773
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
3,422
5,611
2023
Movements in the year:
£
Liability at 2 October 2022
5,611
Credit to profit or loss
(2,189)
Liability at 30 September 2023
3,422
As at the signing date of these financial statements, the company has not finalised its capital expenditure programme for the forthcoming year, and therefore an assessment as to the likely movement of the related timing differences cannot be made.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
CLARENCE COURT EGGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 22 -
17
Financial commitments, guarantees and contingent liabilities
The company is party to a cross guarantee in favour of HSBC UK Bank plc. As part of the cross composite guarantee between the companies under common control, a mortgage debenture exists which provides HSBC UK Bank plc with charges over all company assets, as security against its exposure to debt. The total liability under this guarantee across these companies from 12 October 2021 was limited to £1,400,000.
The company is party to a cross guarantee in favour of HSBC UK Bank plc. As part of the cross composite guarantee between the group companies, an unlimited multilateral guarantee exists which provides HSBC UK Bank plc with charges over all company assets, as security against its exposure to debt. The total liability under this guarantee across these companies is £3,824,120 (2022: £8,973,421).
The company is party to a cross guarantee in favour of HSBC Equipment Finance (UK) Limited in relation to the financing arrangements for various assets in group companies. The total liability under this guarantee across these companies is £5,758,656 (2022: £5,037,757).
18
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Purchases
2023
2022
£
£
Other related parties
14,000
16,800
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Other related parties
-
4,200
Other information
In accordance with FRS102, Section 33 'Related Party Transactions', transactions with other group undertakings owned 100% within the group have not been disclosed in these financial statements.
19
Ultimate controlling party
The immediate parent company is Stonegate Food Group Limited.
The largest and smallest group in which the results of the company are consolidated is that headed by Stonegate Food Group Limited, registered office Lacock Green, Corsham Road, Lacock, Chippenham, Wiltshire, SN15 2LZ. The consolidated financial statements of this group are available to the public and may be obtained from Companies House, Cardiff.
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