Company Registration No. 11351236 (England and Wales)
MELLORS CONSOLIDATED LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
27 JULY 2023
27 July 2023
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MELLORS CONSOLIDATED LIMITED
COMPANY INFORMATION
Directors
Mr M Timmerman
Mr K Timmerman
Company number
11351236
Registered office
West Lancs Technology Management Centre
White Moss Business Park
Moss Lane View
Skelmersdale
England
WN8 9TN
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MELLORS CONSOLIDATED LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 27
MELLORS CONSOLIDATED LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 27 JULY 2023
- 1 -

The directors present the strategic report for the year ended 27 July 2023.

Review of the business

The group trades as a contract catering company serving meals on a daily basis, predominantly into the education sector.

 

The group’s management team have faced external challenges throughout the year including food cost inflation, significant increases in wage costs and enhanced holiday entitlement. The group has invested in a more robust procurement team, working with a more focused supplier base to mitigate as much as possible the impact of food and energy inflation.

 

The group operates in an environment where additional funding is difficult to obtain so as well as thanking the supply chain the group’s management would also like to extend its thanks to those customers that recognise the value in the services the group provides and have worked with us to contribute to increased costs of catering.

 

The impact of the cost increases was to reduce the group’s operating margins. Measures were put in place to minimise the challenges to labour and food margins. The result of a fundamental management review of the performance of individual trading contracts was the result that the number of contracts reduced over the year for the first time in a decade.

 

The group started the year with 360 trading contracts and ended it with 332 contracts reaching a maximum number of 361 contracts during the year. This change in contract numbers reflected the group’s strategy to remove poor performing and small contracts and continuing to trade in a consultative and partnership fashion with contracts that surpass the minimum earning requirements.

 

The number of employees at the start of the year was 2,001 and reduced to 1,751 at the year end. Of these employees 1,651 were female and of these 360 were in positions of management.

 

The ongoing results post the period under review have highlighted the success of the management review with an increase in the average return per contract. The ability to focus on a smaller estate has enabled the management team to undertake a review of the menu of services offered to the client and to utilise the investments in support services made during the prior year in a more beneficial way to the clients in this current year.

 

The group’s management team recognise the benefit of the strength of the company’s customer base, the supply chain and most importantly the employees who have responded to the significant challenges inherent in pushing the business forwards following the period of unprecedented turbulence.

Principal risks and uncertainties

With 90% of the group’s business focussed in the education sector, the group does trade subject to Government policies. The number of meals lost due to strike action during the period emphasises the lack of funding available generally in the sector. The impact of household cost inflation also limits parent and guardians’ willingness to pay for their children to be fed the nutritious meals provided by the company, rather than send their child to school with a packed lunch.

 

Throughout the business, staff have been regularly updated both on group progress and relevant measures to keep them safe whilst providing service in order to avoid accidents at work which is the risk that is always present in a working environment such as that found in the group’s contracts.

Development and performance

The management team has continued to invest in and implement new software solutions to enable a full communication platform from employee to employee and from employee to senior management. During the upcoming year the directors and management will seek to get closer to a 100% engagement across the disparate trading estate and employee cohort.

 

Between the close of the accounting period and the date of these accounts, the directors have continually reviewed the trading performance and the value of the assets shown in the Balance Sheet. In their post Balance Sheet review the directors concluded that the attached accounts represent a true and fair view of the group’s financial position as represented by the Balance Sheet as at the accounts date and that the asset values have not been impaired.

MELLORS CONSOLIDATED LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 2 -
Key performance indicators

It is important, especially as the group continues to be impacted by increased costs in its key production costs, that the group continues to improve the control of these day to day production costs and new working conditions, menus and customer offerings were introduced during the period under review and measured at each monthly management meeting.

 

The ongoing and current performance of the business by unit is measured at the end of every trading week and compared to budgets, prior year incorporating factors such as trading days, sales per unit per day and sales per employee hour.

 

The directors are pleased to report that all these indicators are showing improved trading as at the date of signing these accounts.

Other information and explanations

During a period of continued difficult trading the group generate profits before tax of £508,235 comparable to the profits generated in the previous year £632,300. This performance represents the ability of the group to trade profitably during ongoing challenging trading conditions.

On behalf of the board

Mr M Timmerman
Director
22 March 2024
MELLORS CONSOLIDATED LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 27 JULY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 27 July 2023.

Principal activities

The principal activity of the company and group continued to be that of a contract catering group serving meals on a daily basis, predominantly into the education sector.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £170,287. The directors do not recommend payment of a further dividend.

Directors

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

Mr M Timmerman
Mr K Timmerman
Disabled persons

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

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

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

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Energy and carbon report

The nature of the group’s business and trading estate gives it little control over macro waste management and energy policies and usage but where the directors and management can control the group’s environmental impact there have been significant successes. For example, for the 6 months to the year end the average mileage per company car had reduced to 7,891 versus 9,390 in the equivalent period the year before.

In line with group strategy, all company cars are now either hybrid or electric. This choice of vehicle aligns with the group’s environmental initiatives through ISO14001 accreditation and demonstrates a dedication to adopting eco-friendly solutions. Investing in hybrid and electric vehicles is a vital step towards achieving a greener future and minimising the group’s environmental impact and reduced our CO2 emissions 18 months ahead of schedule.

The group is directly for and charged for the electricity it uses in the Skelmersdale Support Office and during the year has utilised 59,624 KWh amounting to 12,345kg of CO2.

MELLORS CONSOLIDATED LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 4 -
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.

On behalf of the board
Mr M Timmerman
Director
22 March 2024
MELLORS CONSOLIDATED LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MELLORS CONSOLIDATED LIMITED
- 5 -
Opinion

We have audited the financial statements of Mellors Consolidated Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 27 July 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The 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:

MELLORS CONSOLIDATED LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MELLORS CONSOLIDATED LIMITED
- 6 -
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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

 

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

 

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

MELLORS CONSOLIDATED LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MELLORS CONSOLIDATED LIMITED
- 7 -

Identifying and assessing potential risks related to irregularities

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:

 

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Group's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

MELLORS CONSOLIDATED LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MELLORS CONSOLIDATED LIMITED
- 8 -

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Christopher Johnson FCA
Senior statutory auditor
For and on behalf of PM+M Solutions for Business LLP
23 March 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MELLORS CONSOLIDATED LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 27 JULY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
46,345,461
44,532,235
Distribution costs
(44,882,801)
(42,948,890)
Administrative expenses
(1,502,425)
(1,139,676)
Other operating income
548,000
189,288
Operating profit
4
508,235
632,957
Interest payable and similar expenses
8
-
0
(657)
Profit before taxation
508,235
632,300
Tax on profit
9
(103,795)
(44,174)
Profit for the financial year
20
404,440
588,126
Profit for the financial year is all attributable to the owners of the parent company.
MELLORS CONSOLIDATED LIMITED
GROUP BALANCE SHEET
AS AT
27 JULY 2023
27 July 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
26,209
20,243
Current assets
Stocks
14
520,347
603,699
Debtors
15
7,564,588
9,107,929
Cash at bank and in hand
3,668,915
2,951,524
11,753,850
12,663,152
Creditors: amounts falling due within one year
16
(7,226,219)
(8,361,375)
Net current assets
4,527,631
4,301,777
Total assets less current liabilities
4,553,840
4,322,020
Provisions for liabilities
Deferred tax liability
17
-
0
2,333
-
(2,333)
Net assets
4,553,840
4,319,687
Capital and reserves
Called up share capital
19
1,000
1,000
Other reserves
20
(7,499,900)
(7,499,900)
Profit and loss reserves
20
12,052,740
11,818,587
Total equity
4,553,840
4,319,687
The financial statements were approved by the board of directors and authorised for issue on 22 March 2024 and are signed on its behalf by:
22 March 2024
Mr M Timmerman
Director
Company registration number 11351236 (England and Wales)
MELLORS CONSOLIDATED LIMITED
COMPANY BALANCE SHEET
AS AT 27 JULY 2023
27 July 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
6,332
18,196
Investments
12
7,500,000
7,500,000
7,506,332
7,518,196
Current assets
Debtors
15
1,118,444
798,379
Cash at bank and in hand
1,419
5,454
1,119,863
803,833
Creditors: amounts falling due within one year
16
(1,675,353)
(1,161,263)
Net current liabilities
(555,490)
(357,430)
Total assets less current liabilities
6,950,842
7,160,766
Provisions for liabilities
Deferred tax liability
17
-
0
2,333
-
(2,333)
Net assets
6,950,842
7,158,433
Capital and reserves
Called up share capital
19
1,000
1,000
Profit and loss reserves
20
6,949,842
7,157,433
Total equity
6,950,842
7,158,433

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 £37,304 (2022 - £94,667 profit).

The financial statements were approved by the board of directors and authorised for issue on 22 March 2024 and are signed on its behalf by:
22 March 2024
Mr M Timmerman
Director
Company registration number 11351236 (England and Wales)
MELLORS CONSOLIDATED LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 27 JULY 2023
- 12 -
Share capital
Other reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 29 July 2020
1,000
(7,499,900)
11,391,885
3,892,985
Year ended 27 July 2022:
Profit and total comprehensive income
-
-
588,126
588,126
Dividends
10
-
-
(161,424)
(161,424)
Balance at 27 July 2022
1,000
(7,499,900)
11,818,587
4,319,687
Year ended 27 July 2023:
Profit and total comprehensive income
-
-
404,440
404,440
Dividends
10
-
-
(170,287)
(170,287)
Balance at 27 July 2023
1,000
(7,499,900)
12,052,740
4,553,840
MELLORS CONSOLIDATED LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 27 JULY 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 29 July 2020
1,000
7,224,190
7,225,190
Year ended 27 July 2022:
Profit and total comprehensive income for the year
-
94,667
94,667
Dividends
10
-
(161,424)
(161,424)
Balance at 27 July 2022
1,000
7,157,433
7,158,433
Year ended 27 July 2023:
Profit and total comprehensive income
-
(37,304)
(37,304)
Dividends
10
-
(170,287)
(170,287)
Balance at 27 July 2023
1,000
6,949,842
6,950,842
MELLORS CONSOLIDATED LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 27 JULY 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,041,251
991,768
Interest paid
-
0
(657)
Income taxes paid
(131,583)
(194,279)
Net cash inflow from operating activities
909,668
796,832
Investing activities
Purchase of tangible fixed assets
(21,990)
(25,308)
Net cash used in investing activities
(21,990)
(25,308)
Financing activities
Dividends paid to equity shareholders
(170,287)
(161,424)
Net cash used in financing activities
(170,287)
(161,424)
Net increase in cash and cash equivalents
717,391
610,100
Cash and cash equivalents at beginning of year
2,951,524
2,341,424
Cash and cash equivalents at end of year
3,668,915
2,951,524
MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 27 JULY 2023
- 15 -
1
Accounting policies
Company information

Mellors Consolidated Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is West Lancs Technology Management Centre White Moss Business Park, Moss Lane View, Skelmersdale, United Kingdom, WN8 9TN

 

The group consists of Mellors Consolidated Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. 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.

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Mellors Consolidated Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 27 July 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.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is 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 is recognised when services are delivered and the company has fulfilled its contractual obligation to the customer.

1.6
Tangible fixed assets

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

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

Plant and equipment
15% per annum straight line
Fixtures and fittings
15% per annum straight line
Motor vehicles
15% per annum straight line

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.

1.7
Fixed asset investments

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.

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
1
Accounting policies
(Continued)
- 17 -
1.8
Impairment of fixed assets

At each reporting period end date, the group 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.

 

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.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

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.

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
1
Accounting policies
(Continued)
- 18 -
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.

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.

1.12
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.

1.13
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.

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
1
Accounting policies
(Continued)
- 19 -
1.14
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.

1.15
Retirement benefits

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

1.16
Leases

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.

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.

A source of estimation uncertainty is the bad debt provision but the directors have used their historical knowledge and customer payment terms to determine the provision. The directors do not believe there to be any other critical judgements or key sources of estimation uncertainty.

3
Turnover

All turnover arose from the provision of catering services and within the United Kingdom.

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
16,024
57,568
Operating lease charges
85,272
208,772
MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 20 -
5
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
1,899
1,803
19
18

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
22,490,810
21,141,214
673,743
562,075
Social security costs
1,042,282
925,137
57,263
36,864
Pension costs
1,576,174
1,645,808
69,704
10,920
25,109,266
23,712,159
800,710
609,859
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
1,750
1,750
Audit of the financial statements of the company's subsidiaries
16,000
16,000
17,750
17,750
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
17,939
17,971
Company pension contributions to defined contribution schemes
60,000
-
77,939
17,971

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 21 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
0
657
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
55,991
138,053
Adjustments in respect of prior periods
27,985
-
0
Total current tax
83,976
138,053
Deferred tax
Origination and reversal of timing differences
19,819
(93,879)
Total tax charge
103,795
44,174

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

2023
2022
£
£
Profit before taxation
508,235
632,300
Expected tax charge based on the standard rate of corporation tax in the UK of 20.78% (2022: 19.00%)
105,611
120,137
Tax effect of expenses that are not deductible in determining taxable profit
8,490
3,123
Adjustments in respect of prior years
27,985
-
0
Effect of change in corporation tax rate
-
(2,931)
Other timing differences
4,071
(76,155)
Other items
(42,746)
-
0
Loss carried back
384
-
0
Taxation charge
103,795
44,174
10
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
170,287
161,424
MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 22 -
11
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 28 July 2022
79,096
149,449
35,756
264,301
Additions
-
0
-
0
21,990
21,990
Disposals
-
0
(84,657)
(35,756)
(120,413)
At 27 July 2023
79,096
64,792
21,990
165,878
Depreciation and impairment
At 28 July 2022
60,900
147,402
35,756
244,058
Depreciation charged in the year
11,864
2,047
2,113
16,024
Eliminated in respect of disposals
-
0
(84,657)
(35,756)
(120,413)
At 27 July 2023
72,764
64,792
2,113
139,669
Carrying amount
At 27 July 2023
6,332
-
0
19,877
26,209
At 27 July 2022
18,196
2,047
-
0
20,243
Company
Plant and equipment
£
Cost
At 28 July 2022 and 27 July 2023
79,096
Depreciation and impairment
At 28 July 2022
60,900
Depreciation charged in the year
11,864
At 27 July 2023
72,764
Carrying amount
At 27 July 2023
6,332
At 27 July 2022
18,196
12
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
7,500,000
7,500,000
MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
12
Fixed asset investments
(Continued)
- 23 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 28 July 2022 and 27 July 2023
7,500,000
Carrying amount
At 27 July 2023
7,500,000
At 27 July 2022
7,500,000
13
Subsidiaries

Details of the company's subsidiaries at 27 July 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Mellors Catering Services Limited
United Kingdom
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
West Lancs Technology Centre, Moss Lane View, Skelmersdale, Lancashire, WN8 5PE, United Kingdom
14
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
520,347
603,699
-
0
-
0
MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 24 -
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
5,233,490
6,275,213
-
0
-
0
Corporation tax recoverable
517
-
0
517
-
0
Other debtors
1,578,255
2,338,167
1,065,674
755,241
Prepayments and accrued income
154,627
347,861
38,558
43,138
6,966,889
8,961,241
1,104,749
798,379
Deferred tax asset (note 17)
124,536
146,688
13,695
-
0
7,091,425
9,107,929
1,118,444
798,379
Amounts falling due after more than one year:
Other debtors
473,163
-
0
-
0
-
0
Total debtors
7,564,588
9,107,929
1,118,444
798,379
16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
2,495,210
3,477,635
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
1,436,382
950,686
Corporation tax payable
210,429
257,519
-
0
(140)
Other taxation and social security
540,796
171,401
17,201
9,813
Other creditors
3,069,833
3,725,918
3,938
8,472
Accruals and deferred income
909,951
728,902
217,832
192,432
7,226,219
8,361,375
1,675,353
1,161,263
MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 25 -
17
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
-
3,457
(5,159)
1,188
Retirement benefit obligations
-
-
114,417
145,500
Short term timing differences
-
(1,124)
15,278
-
-
2,333
124,536
146,688
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
Accelerated capital allowances
-
3,457
(1,583)
-
Short term timing differences
-
(1,124)
15,278
-
-
2,333
13,695
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability/(Asset) at 28 July 2022
(144,355)
2,333
Charge/(credit) to profit or loss
19,819
(16,028)
Asset at 27 July 2023
(124,536)
(13,695)

An unknown amount of the deferred tax asset is expected to reverse in the 12 months following the end of the accounting period. This relates to unpaid pension contributions due to delays of pension scheme set up from councils out of the control of Mellors Catering Services.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,576,174
1,645,808

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.

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 26 -
19
Share capital
Group and company
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
20
Reserves
Other reserve

This relates to the application of merger accounting, with regards to previous acquisition of Mellors Catering Services.

21
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
181,053
97,911
-
-
Between two and five years
397,344
92,206
-
-
578,397
190,117
-
-
22
Related party transactions

At the year end, amounts due from entities related by common control, totalled £1,306,994 (2022: £977,345).

 

At the year end, amounts due to entities related by common control, totalled £58,834 (2022: £17,143).

23
Controlling party

The ultimate controlling parties of the company are Mr M Timmerman and Mr K Timmerman.

MELLORS CONSOLIDATED LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 27 JULY 2023
- 27 -
24
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
404,440
588,126
Adjustments for:
Taxation charged
103,795
44,174
Finance costs
-
0
657
Depreciation and impairment of tangible fixed assets
16,024
57,568
Movements in working capital:
Decrease/(increase) in stocks
83,352
(176,273)
Decrease/(increase) in debtors
1,521,706
(512,033)
(Decrease)/increase in creditors
(1,088,066)
989,549
Cash generated from operations
1,041,251
991,768
25
Analysis of changes in net funds - group
28 July 2022
Cash flows
27 July 2023
£
£
£
Cash at bank and in hand
2,951,524
717,391
3,668,915
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