Company Registration No. 04736600 (England and Wales)
J & J RESTAURANTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 DECEMBER 2023
J & J RESTAURANTS LIMITED
COMPANY INFORMATION
Directors
AJR Hitch
PT Johnston
Mrs CJ Owen
Mrs LPJohnston
Secretary
AJR Hitch
Company number
04736600
Registered office
First Floor
Kefco House, Rochford Business Park
Cherry Orchard Way
Rochford
Essex
SS4 1GP
Auditor
Rickard Luckin Limited
1st Floor
19 Clifftown Road
Southend-On-Sea
Essex
SS1 1AB
J & J RESTAURANTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 21
J & J RESTAURANTS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 1 -
The directors present the strategic report for the period ended 24 December 2023.
Review of the business
The directors considered the company results for the period to be satisfactory. The company provides administrative services to a subsidiary company, Kefco Sales Limited, and the main income is by way of a management charge.
Principal risks and uncertainties
The management of the business and operation of the company's strategy are subject to a number of risks. The key business risks and uncertainties affecting the company is the competition for its subsidiaries from other national retailers in the locality combined with the effect of the current economic climate on its customer base.
The directors have reviewed the impact Brexit may have on the company's activities and identified that the only potential risk is that associated with its ability to maintain an adequate workforce within its subsidiaries and head office team.
The war in Ukraine that commenced in March 2022 is currently having an impact on the cost of goods and energy. Energy costs have fallen towards the end of this year aiding the return to profitability in subsidiaries. The company continues seeking to reduce risk with increased prices charged for their sales where possible to compensate for increased cost of supplied goods. Energy is currently being bought at a spot rate each month and future purchases when considered suitable risk.
The directors are taking appropriate measures to combat increased costs where appropriate.
Development and performance
The company is planning to continue its services to the subsidiaries as at present. The company remains financially secure and seeks to maintain cost control measures throughout 2024 although recognising all costs areas will be affected by the current global economic conditions.
Key performance indicators
The directors consider the financial key performance indicators arise from controlling the costs of the administrative services provided
Administrative costs were £2,088,625 (2022: £1,835,793)
Section 172 Statement
This section describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) Companies Act 2006 in exercising their duty to promote the success of the Company for the benefit of its members as a whole and in doing so have regard (amongst other matters) to
• the likely consequence of any decision in the long term
• the interests of the company’s employees
• the need to foster the company’s business relationships with suppliers, customers and others
• the impact of the company’s operations on the community and the environment
• the desirability of the company maintaining a reputation for high standards of business conduct
• the need to act fairly between members of the company
J & J RESTAURANTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 2 -
Decision making
J&J Restaurants Limited which was incorporated in 2007, has been run by the same families since formation. The company seeks advice from the senior management team in all decisions, pulling on individual experience as required.
Our stakeholders
Employees
J&J Restaurants Limited recognises that the key to a successful business is well trained, reliable, motivated and informed management team and employees. All staff are trained internally for their roles or hold professional qualifications and additional have training where necessary to satisfy health and safety and food safety standards. Any employee feedback is passed to the senior management and onto the directors through this regular discussion.
Various employee bonus schemes within the company based on individual performance also assist with engaging the employees with the performance of the company.
Other stakeholders
Our main stakeholders are the subsidiary companies to which we provide services. Under the same management team, everyone is familiar with the performance required. We have informal discussions with our regular suppliers and consider this to be satisfactory.
Impact on the community and environment
The company is committed to reducing the environmental impact of our operation. We recycle paper and plastics where possible with all the team getting involved. Energy efficient lights turn off and on automatically and heating is controlled through a timed thermostat.
The company, through its subsidiary’s franchisors own modern slavery policy, manages to manage the risks and prevent slavery and human trafficking being part of the supply chain. Internally, we monitor the right to work of our employees and ensuring they receive their own pay through various procedures and, with our close senior management involvement at office level, are familiar with the staff who we employ.
The risk of bribery is considered very low within the company. Only the senior management team of the company enter into contracts with suppliers, all of whom are aware of their responsibilities in the prevention of bribery and the company has a zero tolerance towards it. The financial director has a final overview by overseeing all outward payments.
As a close company, all ultimate shareholders are appointed directors and aware of the day to day running of the business including the operational and financial transactions.
AJR Hitch
Secretary
29 July 2024
J & J RESTAURANTS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the period ended 24 December 2023.
Principal activities
The company’s main activity is that of providing support administrative services to its subsidiary companies.
Results and dividends
The results for the period are set out on page 10.
The directors did not recommend or pay any dividends in the year 2023 (2022: £nil).
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
AJR Hitch
PT Johnston
Mrs CJ Owen
Mrs LPJohnston
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
Credit risk
Investments of cash surpluses and borrowings are made through our bank.
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 company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
Within the bounds of commercial confidentiality, information is disseminated to all members of staff about matters that affect the progress of the company and are of interest and concern to them as employees.
Regular staff meetings at the head office are held where discussion is encouraged. The company encourages the development of employees through training.
Business relationships
Details of our engagement with customers and suppliers can be found in our S172 statement.
J & J RESTAURANTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 4 -
Auditor
The auditor, Rickard Luckin Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Streamlined Energy and Carbon Reporting (SECR)
The company’s operations use minimal energy from electricity at the head office. The supply is provided from a meter that is not separated from its subsidiary, Kefco Sales Limited. The directors do not feel it is practical to report the actual usage as it would all be estimated and of a low value. All relevant usage of this company is disclosed within the figures of Kefco Sales Limited.
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.
By order of the board
AJR Hitch
Secretary
29 July 2024
J & J RESTAURANTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 5 -
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The 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.
J & J RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J & J RESTAURANTS LIMITED
- 6 -
Opinion
We have audited the financial statements of J & J Restaurants Limited (the 'company') for the period ended 24 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 24 December 2023 and of its loss for the period 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.
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 period 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.
J & J RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF J & J RESTAURANTS LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or 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.
Capability of the audit in detecting irregularity, 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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
J & J RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF J & J RESTAURANTS LIMITED
- 8 -
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; data protection legislation; anti-bribery and corruption legislation.
International Auditing Standards (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting cash or any revenue account and journal entries posted by senior management;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
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 International Auditing Standards UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
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.
J & J RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF J & J RESTAURANTS LIMITED
- 9 -
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.
Neil Brewer
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
6 August 2024
Chartered Accountants
Statutory Auditor
1st Floor
19 Clifftown Road
Southend-On-Sea
Essex
SS1 1AB
J & J RESTAURANTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 10 -
Period
Period
ended
ended
24 December
25 December
2023
2022
Notes
£
£
Turnover
3
1,444,339
1,303,780
Administrative expenses
(2,088,625)
(1,835,793)
Operating loss
4
(644,286)
(532,013)
Interest receivable and similar income
25,964
14,475
Interest payable and similar expenses
(3,626)
Loss before taxation
(621,948)
(517,538)
Tax on loss
7
(754)
Loss for the financial period
(621,948)
(518,292)
J & J RESTAURANTS LIMITED
BALANCE SHEET
AS AT
24 DECEMBER 2023
24 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
1,047
6,069
Investments
9
11,300,577
11,300,577
11,301,624
11,306,646
Current assets
Debtors
11
1,990,417
1,901,088
Cash at bank and in hand
820,384
832,408
2,810,801
2,733,496
Creditors: amounts falling due within one year
12
(12,905,414)
(12,211,183)
Net current liabilities
(10,094,613)
(9,477,687)
Net assets
1,207,011
1,828,959
Capital and reserves
Called up share capital
14
100,001
100,001
Share premium account
956,730
956,730
Capital redemption reserve
25,001
25,001
Profit and loss reserves
125,279
747,227
Total equity
1,207,011
1,828,959
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:
PT Johnston
Director
Company Registration No. 04736600
J & J RESTAURANTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 12 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 27 December 2021
100,001
956,730
25,001
1,265,519
2,347,251
Period ended 25 December 2022:
Loss and total comprehensive income
-
-
-
(518,292)
(518,292)
Balance at 25 December 2022
100,001
956,730
25,001
747,227
1,828,959
Period ended 24 December 2023:
Loss and total comprehensive income
-
-
-
(621,948)
(621,948)
Balance at 24 December 2023
100,001
956,730
25,001
125,279
1,207,011
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
J & J Restaurants Limited is a private company limited by shares incorporated in England and Wales. The registered office is First Floor, Kefco House, Rochford Business Park, Cherry Orchard Way, Rochford, Essex, SS4 1GP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The 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.
J & J Restaurants Limited is a wholly owned subsidiary of Kefco Group Limited and the results of J & J Restaurants Limited are included in the consolidated financial statements of Kefco Group Limited which are available from its registered office:- First Floor, Kefco House, Rochford Business Park, Cherry Orchard Way, Rochford, Essex, SS4 1GP.
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 determining this the Directors have considered the company’s net current liabilities position, which only arises as a result of group company indebtedness. The Directors have received assurances that amounts due to fellow group companies would not be demanded to the detriment of this company being able to meet its liabilities as they fall due.
1.3
Reporting period
The accounting reference date is 24 December (2022 - 25 December). The company prepares its management accounts on a 4 weekly basis and these annual accounts are made up to 24 December 2023 (2022 - 25 December). Given that the previous period also consists of 13 periods of 4 weeks each, there are no issues with regard to comparability of figures.
1.4
Turnover
Turnover is recognised as a management charge received from a group company. This is a reimbursement of administrative expenses with a markup to reflect a commercial margin.
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
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:
Fixtures, fittings & equipment
over 3-10 years
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, associates and jointly controlled entities 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
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The company operates a defined contribution pension scheme for certain employees. The assets of the scheme are held separately from those of the company in independent and separate trustee administered funds. The annual contributions payable are charged to the company profit or loss and outstanding contributions are included on the company balance sheet.
1.13
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 leases asset are consumed.
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.
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
There are no significant judgements or key sources of estimation uncertainty arising in the application of the company's accounting policies or in the preparation of its financial statements.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Management charges
1,444,339
1,303,780
4
Operating loss
2023
2022
Operating loss for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the group and company's financial statements
58,700
76,650
Depreciation of owned tangible fixed assets
5,755
6,295
Operating lease charges
31,870
2,120
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
2022
Number
Number
Administrative staff
20
19
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,040,214
956,232
Social security costs
123,176
120,108
Pension costs
98,814
71,023
1,262,204
1,147,363
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 18 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
477,341
396,936
Company pension contributions to defined contribution schemes
34,963
43,460
512,304
440,396
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
178,866
178,703
Company pension contributions to defined contribution schemes
17,000
16,791
7
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
754
From April 2023 UK corporation tax has been increased by 6% to 25% (2022: 19%).
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(621,948)
(517,538)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(155,487)
(98,332)
Change in unrecognised deferred tax assets
1,459
8,359
Group relief
154,028
92,033
Under/(over) provided in prior years
754
Change in tax rates
(2,006)
Capital allowances in excess of depreciation
(54)
Taxation charge for the period
-
754
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 19 -
8
Tangible fixed assets
Fixtures, fittings & equipment
£
Cost
At 26 December 2022
61,877
Additions
733
At 24 December 2023
62,610
Depreciation and impairment
At 26 December 2022
55,808
Depreciation charged in the period
5,755
At 24 December 2023
61,563
Carrying amount
At 24 December 2023
1,047
At 25 December 2022
6,069
9
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
10
11,300,577
11,300,577
10
Subsidiaries
Details of the company's subsidiaries at 24 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Chelcol Limited
First Floor, Kefco House, Rochford Business Park, Cherry Orchard Way, Rochford, Essex, SS4 1GP
Non-trading
Ordinary
100.00
Kefco Sales Limited
First Floor, Kefco House, Rochford Business Park, Cherry Orchard Way, Rochford, Essex, SS4 1GP
KFC franchisee
Ordinary
100.00
The investments in subsidiaries are all stated at cost.
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 20 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
1,989,119
1,888,780
Other debtors
1,298
6,108
Prepayments and accrued income
6,200
1,990,417
1,901,088
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
6,737
1,413
Amounts owed to group undertakings
12,702,448
11,983,546
Taxation and social security
64,108
40,626
Other creditors
8,852
7,761
Accruals and deferred income
123,269
177,837
12,905,414
12,211,183
9
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
98,814
71,023
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.
At the balance sheet date £8,852 (2022: £7,761) was payable to the scheme and included in creditors.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,001
100,001
100,001
100,001
15
Financial commitments, guarantees and contingent liabilities
There is a contingent liability in respect of companies within the group secured by an intercompany cross guarantee over the bank loans and a fixed and floating charge over all assets. The amount outstanding across the group at 24 December 2023 was £8,877,144 in the parent company (2022: £10,288,575).
J & J RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 24 DECEMBER 2023
- 21 -
16
Related party transactions
In accordance with the FRS102 the company has not disclosed transactions with wholly owned members of the group.
17
Ultimate controlling party
The immediate and ultimate parent company of J&J Restaurants Limited is Kefco Group Limited, a company incorporated in England and Wales and its registered office is First Floor, Kefco House, Rochford Business Park, Cherry Orchard Way, Rochford, Essex, SS4 1GP.
The companies results are included in the consolidated accounts of Kefco Group Limited which is both the smallest and largest group into which the entity is consolidated. The consolidated accounts of Kefco Group Limited are publically available from Companies House, Crown Way, Cardiff CF14 3UZ.
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