Company registration number 02997524 (England and Wales)
BOWLAND FOODS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
BOWLAND FOODS LIMITED
COMPANY INFORMATION
Directors
Mr J H Wood
Mrs V G Wood
Mr P W Briggs
Mr H J Wood
Secretary
Mrs V G Wood
Company number
02997524
Registered office
Richard House
9 Winckley Square
Preston
PR1 3HP
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
BOWLAND FOODS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 22
BOWLAND FOODS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -
The directors present the strategic report for the year ended 31 October 2023.
Review of the business
The company continues to be principally involved in the business of wholesale meat supply, with over thirty years experience in both farming and meat wholesale. A complete range of cuts and carcasses of quality British beef, pork and lamb is sold to businesses all over the UK, the majority of which is primarily sourced locally. Our customer base has grown steadily over time and ranges from small, local butchers to wholesale meat suppliers, with the company having many long-standing customers. Many of our customers appreciate our family-business approach, with the Wood family having been involved ever since Bowland Foods was founded, which ensures a personal and efficient service for all customers.
The company is British Retail Consortium accredited for our beef-producing operations and has also achieved accreditations to the EBLEX Quality Standard Mark for British Beef and Lamb. The factory is an EC approved cutting premises and the majority of the beef that is processed by the company is from Farm Assured premises.
Principal risks and uncertainties
The company’s operations expose it to a variety of financial risks. A significant proportion of the trade is supplying smaller sized butchers and meat retailers who face competition from the large supermarkets and changing consumer behaviour. The company has adopted a policy of supporting traders during difficult times by not automatically passing on all price increases. Additionally, the quantity of customers, and trading on other secondary markets, diversifies this risk. The company is exposed to the usual credit risk, liquidity risk and cash flow associated with selling on credit and manages this through credit control procedures and by regularly monitoring of amounts outstanding for both time and credit limits. The company does not use derivative financial instruments to manage interest costs and as such no hedge accounting is applied. The company does not trade overseas and as such has no foreign exchange risk.
Historical food scares such as the BSE and Foot and Mouth crises have previously caused temporary, but large scale, reductions in the size of the market for meat products as consumers switched to alternate products not supplied by the Company. Whilst such matters are outside of the company’s control, the business has built up significant net assets to ensure it can survive any short term problems.
Given the size of the company the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the directors are implemented by the company’s finance department.
Development and performance
Whilst turnover has continued to grow, in the second half of the year input prices of UK livestock , that are the company’s primary product, began to rise significantly as farmers reduced their stock on the land. At the same time the UK market was opened up to more imported beef and lamb which brought downward pressure on selling prices. We remain committed to the UK market and as we could not pass on price increases our margin began to be squeezed in both directions. This is the reason for the reduction in gross margin in the accounts. Despite these pressures, net assets have increased from £4.1m to £4.5m.
We have continued with the building of our new extension during the year, but with the changes in the market as above we significantly slowed down the construction and cash outflow
Since the year end, this pattern has continued and the wholesale meat market remains very difficult. The full opening of our new extension has been deferred until later in the new year. At the time of this report however we are just starting to see a reversal in the trends and margins starting to improve. Once we are confident we are in a new business cycle we will fully open our new, modernized, and energy efficient production facilities, when we will have the capacity to double our turnover on previous levels.
BOWLAND FOODS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
Key performance indicators
The company’s key performance indicators are turnover and gross profit, both of which are measured and monitored on a weekly basis. Turnover has increased to £39.1m from £33.0m whilst gross profit has decreased from £2.7m to £2.2m. Gross profit margin has decreased to 5.5% from 8.1% for the reasons outlined above. In light of the incredibly difficult trading conditions, this is a very pleasing result and the directors consider the company to be in a strong financial position.
Other information and explanations
Finally the directors would like to place on record their sincere thanks to the dedicated and talented staff employed throughout the company, without whose efforts the company would not continue to thrive.
Mrs V G Wood
Secretary
29 July 2024
BOWLAND FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 October 2023.
Principal activities
The principal activity of the company continued to be that of a wholesale meat supplier.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £14,960. 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 J H Wood
Mrs V G Wood
Mr P W Briggs
Mr H J Wood
Auditor
Following the merger of MHA Moore & Smalley with MHA, the company's independent auditor has now become MHA. The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of business review and financial risk management.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
By order of the board
Mrs V G Wood
Secretary
29 July 2024
BOWLAND FOODS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
BOWLAND FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BOWLAND FOODS LIMITED
- 5 -
Opinion
We have audited the financial statements of Bowland Foods Limited (the 'company') for the year ended 31 October 2023 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
BOWLAND FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BOWLAND FOODS LIMITED (CONTINUED)
- 6 -
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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Matters on which we are required to report by exception
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 directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is 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;
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;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls; and
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries.
BOWLAND FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BOWLAND FOODS LIMITED (CONTINUED)
- 7 -
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
Virginia Cooper FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
30 July 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
BOWLAND FOODS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
39,104,897
32,994,977
Cost of sales
(36,943,788)
(30,327,087)
Gross profit
2,161,109
2,667,890
Distribution costs
(534,671)
(420,522)
Administrative expenses
(1,071,301)
(1,006,315)
Operating profit
4
555,137
1,241,053
Interest receivable and similar income
7
46,738
15,721
Interest payable and similar expenses
8
(2,022)
Profit before taxation
599,853
1,256,774
Tax on profit
9
(166,911)
(240,255)
Profit for the financial year
432,942
1,016,519
Retained earnings brought forward
4,060,295
3,338,064
Dividends
10
(14,960)
(294,288)
Retained earnings carried forward
4,478,277
4,060,295
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BOWLAND FOODS LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
3,203,732
400,215
Current assets
Stocks
15
834,965
739,439
Debtors
16
2,985,537
2,667,472
Cash at bank and in hand
716,421
2,079,253
4,536,923
5,486,164
Creditors: amounts falling due within one year
17
(2,624,580)
(1,676,030)
Net current assets
1,912,343
3,810,134
Total assets less current liabilities
5,116,075
4,210,349
Creditors: amounts falling due after more than one year
18
(320,833)
Provisions for liabilities
Deferred tax liability
20
266,965
100,054
(266,965)
(100,054)
Net assets
4,528,277
4,110,295
Capital and reserves
Called up share capital
22
30,000
30,000
Capital redemption reserve
20,000
20,000
Profit and loss reserves
4,478,277
4,060,295
Total equity
4,528,277
4,110,295
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
Mrs V G Wood
Director
Company registration number 02997524 (England and Wales)
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
1
Accounting policies
Company information
Bowland Foods Limited is a company limited by shares incorporated in England and Wales. The registered office is Richard House, 9 Winckley Square, Preston, PR1 3HP. The company operates from Unit 16 Roman Way Industrial Estate, Longridge Road, Ribbleton, Preston, PR2 5BB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Bowland (Holdings) Limited. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Bowland Foods Limited is a wholly owned subsidiary of Bowland (Holdings) Limited.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. In making this assessment, the directors have made reference to budgeted future performance and post year end performance, as well as current banking facilities.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 11 -
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. Turnover is recognised based on the date of dispatch of the goods.
1.4
Intangible fixed assets - goodwill
Positive purchased goodwill arising on acquisitions is capitalised, classified as an asset on the Balance Sheet and amortised over its estimated useful life of up to 5 years. This length of time is presumed to be the maximum useful life of purchased goodwill because it is difficult to make projections beyond this period. Goodwill is reviewed for impairment at the end of the first full financial year following each acquisition and subsequently as and when necessary if circumstances emerge that indicate that the carrying value may not be recoverable.
1.5
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 machinery
4 - 10 years straight line
Office equipment
3 years straight line
Motor vehicles
25% reducing balance
Assets in the course of construction are not depreciated.
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.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.8
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. Cost is calculated using the first in first out method.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 12 -
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.
1.9
Cash and cash equivalents
Cash at bank and in hand 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.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Other financial assets
All of the company's financial assets are basic financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies, are initially recognised at transaction price. 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. Trade creditors are recognised initially at transaction price.
Other financial liabilities
All of the company's financial liabilities are basic financial instruments.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
1.12
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.
1.13
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.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
1.14
Retirement benefits
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.16
The accounts have been prepared on the assumption that group relief is available to facilitate the transfer of corporation tax losses between companies in the group.
The directors have resolved that there may be payment for such losses surrendered.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Depreciation and life of tangible fixed assets
Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives. The selection of these residual values and estimated lives requires the exercise of management judgement and is reviewed at each balance sheet date.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Valuation of tangible fixed assets
Tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable amount is equal to the expected recoverable value prepared on the basis of management's assumptions and estimates.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 15 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Attributable to the company's principal activities
39,104,897
32,994,977
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
39,104,897
32,994,977
2023
2022
£
£
Other revenue
Interest income
46,738
15,721
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,250
12,000
Depreciation of owned tangible fixed assets
147,347
117,971
Profit on disposal of tangible fixed assets
-
(20,490)
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production staff
46
43
Administrative staff
8
8
Total
54
51
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,533,528
1,395,387
Social security costs
151,416
150,923
Pension costs
77,890
77,181
1,762,834
1,623,491
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
120,612
132,878
Company pension contributions to defined contribution schemes
1,906
2,002
122,518
134,880
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
46,738
15,721
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
2,022
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
213,857
Adjustments in respect of prior periods
2,964
Total current tax
216,821
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 17 -
Deferred tax
Origination and reversal of timing differences
150,339
17,810
Changes in tax rates
16,572
5,624
Total deferred tax
166,911
23,434
Total tax charge
166,911
240,255
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
599,853
1,256,774
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
135,074
238,787
Tax effect of expenses that are not deductible in determining taxable profit
355
225
Adjustments in respect of prior years
2,964
Effect of change in corporation tax rate
16,572
5,624
Group relief
30,420
Other permanent differences
(15,510)
(7,345)
Taxation charge for the year
166,911
240,255
The Chancellor announced his intention to increase the headline rate of corporation tax to 25% from 1 April 2023, this policy was substantively enacted on 25 May 2021.
10
Dividends
2023
2022
£
£
Final paid
14,960
294,288
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 November 2022 and 31 October 2023
147,500
Amortisation and impairment
At 1 November 2022 and 31 October 2023
147,500
Carrying amount
At 31 October 2023
At 31 October 2022
12
Tangible fixed assets
Assets under construction
Plant and machinery
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 November 2022
370,800
37,916
832,036
1,240,752
Additions
2,794,963
155,901
2,950,864
At 31 October 2023
2,794,963
370,800
37,916
987,937
4,191,616
Depreciation and impairment
At 1 November 2022
310,737
36,534
493,266
840,537
Depreciation charged in the year
27,188
1,382
118,777
147,347
At 31 October 2023
337,925
37,916
612,043
987,884
Carrying amount
At 31 October 2023
2,794,963
32,875
375,894
3,203,732
At 31 October 2022
60,063
1,382
338,770
400,215
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Assets under construction
607,212
-
13
Fixed asset investments
2023
2022
£
£
Investments in subsidiaries
14
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
13
Fixed asset investments
(Continued)
- 19 -
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 November 2022 & 31 October 2023
150,921
Impairment
At 1 November 2022 & 31 October 2023
150,921
Carrying amount
At 31 October 2023
-
At 31 October 2022
-
14
Subsidiaries
These financial statements are separate company financial statements for Bowland Foods Limited.
Details of the company's subsidiaries at 31 October 2023 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
James Law Limited
1
Ordinary
100.00
Registered office addresses (all UK unless otherwise indicated):
1
Richard House, 9 Winckley Square, Preston, PR1 3HP
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
834,965
739,439
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,764,917
2,378,983
Other debtors
174,387
71,292
Prepayments and accrued income
46,233
217,197
2,985,537
2,667,472
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
19
29,167
Trade creditors
2,140,210
1,144,091
Amounts owed to group undertakings
313,034
363,034
Corporation tax
879
53,857
Other taxation and social security
24,455
32,696
Other creditors
99,185
67,702
Accruals and deferred income
17,650
14,650
2,624,580
1,676,030
Obligations under finance leases of £29,167 (2022: £Nil) are secured against the assets to which they relate.
18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
19
320,833
Obligations under finance leases of £320,833 (2022: £Nil) are secured against the assets to which they relate.
Amounts included above which fall due after five years are as follows:
Payable by instalments
40,834
-
19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
55,397
In two to five years
335,860
In over five years
41,868
433,125
Less: future finance charges
(83,125)
350,000
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
266,965
100,054
2023
Movements in the year:
£
Liability at 1 November 2022
100,054
Charge to profit or loss
150,339
Effect of change in tax rate - profit or loss
16,572
Liability at 31 October 2023
266,965
As the company has not finalised its capital expenditure plans for the next financial year, it is not possible to clarify the unwinding of the net deferred tax liability over the next 12 months.
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
77,890
77,181
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
30,000
30,000
30,000
30,000
23
Ultimate controlling party
The company is a wholly owned subsidiary of Bowland (Holdings) Limited, a company incorporated in England and Wales. The registered office of Bowland (Holdings) Limited is Richard House, 9 Winckley Square, Preston, PR1 3HP.
The largest and smallest group in which the results of the company are consolidated is that headed by Bowland (Holdings) Limited. The consolidated financial statements of this group are available to the public and may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
BOWLAND FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
23
Ultimate controlling party
(Continued)
- 22 -
The ultimate controlling party is Mr J H Wood by virtue of his majority shareholding.
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Category
Description of
Income
Expenditure
transaction
2023
2022
2023
2022
£
£
£
£
Entities under common control
Purchases
14,987
5,000
Other related parties
Sales and purchases
884,692
273,496
13,303
Balances with related parties
The following amounts were outstanding at the reporting end date:
Category
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£
£
£
£
Other related parties
9,775
24,464
Other information
The company has taken advantage of the exemption conferred by Section 33 FRS102, namely from disclosing any transactions entered into between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
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