Company registration number 01928101 (England and Wales)
THE AUTHENTIC FOOD COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
THE AUTHENTIC FOOD COMPANY LIMITED
COMPANY INFORMATION
Directors
K K Basran
N Basran
Company number
01928101
Registered office
4-5 Robeson Way
Sharston Green Business Park
Manchester
M22 4SW
Auditor
Alexander & Co LLP
Centurion House
129 Deansgate
Manchester
M3 3WR
THE AUTHENTIC FOOD COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
THE AUTHENTIC FOOD COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The Directors present their Strategic Report together with the audited financial statements for the year ended 30 November 2023.

Fair review of the business

The results of the Company for the year, as set out on page 9, show turnover of £45.5m (2022 - £50.6m) and a profit on ordinary activities before taxation of £2.0m (2022 – £1.2m).

 

As reported in the previous 12 month financial period the rate of cost inflation was a significant challenge. Efforts were concentrated on how to mitigate or avoid its impact as best as possible. During this 12 month period the efforts and steps taken to manage the inflation challenge started to be seen.

 

Energy costs specifically gas and electricity costs where the time and focus invested to mitigate saw a significant reduction in the level of cost in this financial period to those in the prior 12 month financial period. The investment in the area continues with a more robust understanding of current and future exposures, more transparency of the drivers of consumption which will lead to opportunities to adopt more control and ultimately reduce energy usage.

 

The business has also worked hard and put added focus in the period to challenge inefficiency, manage waste and control overhead costs. It has been identified in the period that there are further opportunities to come. With that said further investment in resource is being made to supplement present efforts and drive this area of work forward.

 

Future growth and developments
The Company is focused on bringing exceptional innovation and quality to all the sales channels in which it operates. This includes frozen ready meals, plant based offerings and vegan options. This innovation is seen as key to deliver the future growth.
The Company understands how important exceptional customer relationships are. The business is continually working on developing and improving further where possible the existing relationships it has and when the opportunity arise establishing new customer relationships on the same basis
Beyond Meat continues to be a key strategic partner, a relationship which we are proud of. We work extremely hard and invest significantly into this relationship and will continue to do so. This will bring further innovation and exciting products to the category.
Strategy
The business strategy is to continue to drive innovation and to provide market leading frozen world foods, which ultimately deliver benefit to all its stakeholders.
Principal risks and uncertainties

The principal risks and uncertainties of the Company are in line with other food manufacturing businesses that operate within similar categories, as ever these are pricing pressure from customers and the competitive nature of the markets it operates in. The Company manages margin pressure as a result of raw material cost inflation, exchange rate volatility and the constant increases in employee costs.

 

The Directors and senior leadership team closely monitor the business through key performance indicators. A number of which are detailed below to assist mitigate the principal risks and uncertainties faced.

Key performance indicators

KPIs are operated at all levels to measure performance enabling the Company to control its business on a daily, weekly and monthly basis.

The Directors monitor the progress of the Group by reference to the following KPIs:

 

THE AUTHENTIC FOOD COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Going concern

In preparing these financial statements the Directors are required to make the necessary assessments to ensure that the going concern basis is appropriate.

The business has worked hard to mitigate the impact of the inflation seen during the financial period. This has been hugely challenging as the increased costs have been seen impacting throughout the business’s cost structure. In addition to this, due to the nature of the business, the cost of energy has also been a factor as has the availability of certain raw materials. The business has engaged with its customer and supplier base to find the optimum solution to address the challenging pressures noted.

The Directors have produced detailed forecasts to understand its resilience to the continued impact of the aforementioned drivers, and modelled scenarios to assess potential actions required to remain financially viable.

The Directors are therefore confident they have the appropriate operational and tactical plans ready in order to react when needed.

Promoting the success of the company

 

Stakeholder Group

Why we engage

How we engage

Employees

The continued success of the company is heavily reliant upon our employees working towards our shared goals.

Employees are briefed regularly to provide a business update and progress towards factory targets. The senior management team are continually working on finding improved methods of engagement.

Customers

Our customer satisfaction is imperative to the long term success of the business.

Our commercial and new product development teams work together with our customers to ensure their needs are surpassed and that we are able to offer innovative products in line with emerging trends.

Suppliers

The food sector is a heavily regulated industry; we retain a trusted supplier base to maintain the highest quality standards.

Our purchasing, technical and supply chain teams are in regular contact with suppliers to ensure quality standards are maintained and to ensure the supply chain remains uninterrupted.

Community

TAFC cares about its local community and the people within it.

TAFC donates food to trusted charity partners in order to help people in need and also to minimise food waste. We are continually looking at further methods to engage with the community.

Environment

The company acknowledges the impact its activity has on the environment. It has a responsibility to try and minimise the impact on the environment.

We maximise recycling and have started to migrate to recyclable food trays. The factory also looks at optimising energy usage. We work closely with energy specialists to assist us with ensuring we are progressively moving the environment agenda forward.

 

THE AUTHENTIC FOOD COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -

On behalf of the board

N Basran
Director
22 August 2024
THE AUTHENTIC FOOD COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -

The Directors present their annual report and financial statements for the year ended 30 November 2023.

Principal activities

The principal activity of the company continued to be the production and sale of frozen world foods into foodservice and retail customers.

Results and dividends

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

No ordinary dividends were paid. The Directors do not recommend payment of a final dividend.

Directors

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

K K Basran
N Basran
Auditor

The auditor, Alexander & Co LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Energy and carbon report

The Companies Act 2006 (Strategic report and Directors’ Report) Regulations 2018 require the disclosure of annual UK energy consumption and greenhouse gas emissions from SECR regulated sourced.

Energy consumption (kWh)
7,116,674
Emissions from purchased electricity (kgCO2e)
776,560
Emissions from gas combustion (kgCO2e)
717,130
Emissions from transport (kgCO2e)
91,254
Total Gross Emissions (kgCO2e)
1,584,945
Intensity ratio (kgCO2 per tonne of product)
216
Methodology
Consumption data for both Electricity and Gas has been obtained from utility invoices. Transport emissions are calculated by converting mileage covered in the period converted to kWh and then to kgCO2e using 2023 conversion rates provided by DEFRA.
Energy efficiency initiatives
The business continues to work closely with an energy consultancy business to assist in identifying and prioritising energy efficiency initiatives.  This work continues and is expected to support the business in the near future.
THE AUTHENTIC FOOD COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -
Statement of directors' responsibilities

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

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

Strategic report

In accordance with section 414C(11) of the Companies Act 2006, certain matters required to be detailed in the Directors Report are detailed in the Strategic Report where the Directors consider them to be of strategic importance to the Company.

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 director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company and the group's auditor is aware of that information.

On behalf of the board
N Basran
Director
22 August 2024
THE AUTHENTIC FOOD COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE AUTHENTIC FOOD COMPANY LIMITED
- 6 -
Opinion

We have audited the financial statements of The Authentic Food Company Limited (the 'company') for the year ended 30 November 2023 which comprise the profit and loss account, 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:

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 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.

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 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 AUTHENTIC FOOD COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE AUTHENTIC FOOD COMPANY 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:

 

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.

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

Capability of the audit in 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.

Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to breaches of the legal and regulatory framework that the company operates in. We considered the extent to which non-compliance might have a material effect on the financial statements. The key laws and regulations we considered in this context included UK Companies Act 2006, employment law, health and safety and tax legislation.

We also evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to the posting of inappropriate journal entries to manipulate financial results and potential management bias in accounting estimates.

THE AUTHENTIC FOOD COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE AUTHENTIC FOOD COMPANY LIMITED
- 8 -

As a result of the above, our audit procedures performed included:

There are inherent limitations in the audit procedures described above. The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK).

We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the Directors of The Authentic Food Company Limited.

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.

Emma Ball (Senior Statutory Auditor)
For and on behalf of Alexander & Co LLP
22 August 2024
Chartered Accountants
Statutory Auditor
Centurion House
129 Deansgate
Manchester
M3 3WR
THE AUTHENTIC FOOD COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
45,467,528
50,586,287
Cost of sales
(34,145,542)
(38,498,520)
Gross profit
11,321,986
12,087,767
Distribution costs
(672,670)
(688,713)
Administrative expenses
(8,476,368)
(10,110,013)
Operating profit
4
2,172,948
1,289,041
Interest payable and similar expenses
6
(162,212)
(92,777)
Profit before taxation
2,010,736
1,196,264
Tax on profit
7
(263,095)
(227,941)
Profit for the financial year
1,747,641
968,323

The profit and loss account has been prepared on the basis that all operations are continuing operations.

THE AUTHENTIC FOOD COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
1,747,641
968,323
Other comprehensive income
-
-
Total comprehensive income for the year
1,747,641
968,323
THE AUTHENTIC FOOD COMPANY LIMITED
BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
525,324
712,003
Current assets
Stocks
9
4,899,686
3,422,494
Debtors falling due after more than one year
10
16,023,572
15,868,925
Debtors falling due within one year
10
5,123,201
5,245,928
Cash at bank and in hand
1,684,222
2,085,537
27,730,681
26,622,884
Creditors: amounts falling due within one year
11
(8,560,135)
(8,840,705)
Net current assets
19,170,546
17,782,179
Total assets less current liabilities
19,695,870
18,494,182
Creditors: amounts falling due after more than one year
12
-
0
(54,423)
Provisions for liabilities
Provisions
14
800,000
1,300,000
Deferred tax liability
15
8,470
-
0
(808,470)
(1,300,000)
Net assets
18,887,400
17,139,759
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
18,887,300
17,139,659
Total equity
18,887,400
17,139,759
The financial statements were approved by the board of directors and authorised for issue on 22 August 2024 and are signed on its behalf by:
N  Basran
Director
Company registration number 01928101 (England and Wales)
THE AUTHENTIC FOOD COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 December 2021
100
16,171,336
16,171,436
Year ended 30 November 2022:
Profit and total comprehensive income
-
968,323
968,323
Balance at 30 November 2022
100
17,139,659
17,139,759
Year ended 30 November 2023:
Profit and total comprehensive income
-
1,747,641
1,747,641
Balance at 30 November 2023
100
18,887,300
18,887,400
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 13 -
1
Accounting policies
Company information

The Authentic Food Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is 4-5 Robeson Way, Sharston Green Business Park, Manchester, M22 4SW.

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 below disclosure requirement:

 

 

The financial statements of the company are consolidated in the financial statements of The Authentic Food Group Limited. These consolidated financial statements are available to access on Companies House.

 

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.

 

The Directors have assessed the recoverability of the amounts due from Group undertakings and assess the balance to be recoverable based on future trading projections (Note 2).

1.3
Turnover

Turnover is recognised to the extent that it is probable that the economic benefit will flow to the Company and the turnover can be reliably measured. Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 

The following criteria must also be met before turnover is recognised:

 

 

 

 

 

 

THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.4
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:

Leasehold improvements
10% straight line
Plant and machinery
10-15% straight line
Fixtures, fittings & equipment
25% straight line
Motor vehicles
15% 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 credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.6
Stocks

Stocks are stated at the lower of cost and net realisable value. Cost comprises of raw materials, WIP & finished goods.

 

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its net realisable value is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

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, 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.

 

No statement of cash flows has been prepared on the basis that the company is a subsidiary undertaking where 90% or more acting rights are controlled within the group and consolidated accounts incorporating the company are publicly available.

THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 cost. 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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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. 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.

Other financial liabilities

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.

1.9
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.

 

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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
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.

 

In preparing these financial statements, the Directors have had to make the following judgements:

 

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Principal activity
45,467,528
50,586,287
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
44,497,012
48,935,422
Rest of Europe
183,968
138,694
Rest of the world
786,548
1,512,171
45,467,528
50,586,287
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
71,957
129,124
Fees payable to the company's auditor for the audit of the company's financial statements
9,500
3,465
Depreciation of owned tangible fixed assets
229,759
407,865
Operating lease charges
206,726
206,726
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
4
Operating profit
(Continued)
- 19 -

During the year, no Director received any emoluments for services to this company (2022 - £nil).

 

The Directors emoluments are paid by the parent company, The Authentic Food Group Limited, and not recharged. The value of Directors emoluments paid by The Authentic Food Group for the year was £1,596,820 (2022 - £1,210,683). In the opinion of the Directors, there are no key management personnel other than the Directors.

5
Employees

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

2023
2022
Number
Number
Production
91
112

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,941,603
2,377,627
Social security costs
151,562
185,131
Pension costs
44,862
52,854
2,138,027
2,615,612
6
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
4,218
Other interest payable
162,212
88,559
162,212
92,777
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
407,366
291,443
Adjustments in respect of prior periods
(199,573)
-
0
Total current tax
207,793
291,443
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
7
Taxation
2023
2022
£
£
(Continued)
- 20 -
Deferred tax
Other adjustments
55,302
(63,502)
Total tax charge
263,095
227,941

The corporation tax rate increased from 19% to 25% in the year. As the current accounting year includes periods of corporation tax rates at both 19% and 25%, a marginal rate has been used.

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
2,010,736
1,196,264
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
462,670
227,290
Tax effect of expenses that are not deductible in determining taxable profit
26,878
15,891
Adjustments in respect of prior years
(199,573)
-
0
Depreciation on assets not qualifying for tax allowances
2,787
-
0
Deferred tax adjustments in respect of prior years
4,400
-
0
Remeasurement of deferred tax for changes in tax rates
-
0
(15,240)
Enhanced allowance
(449)
-
0
Car leasing
285
-
0
Provisions disallowed
(33,903)
-
0
Taxation charge for the year
263,095
227,941
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
8
Tangible fixed assets
Long term leasehold property
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 December 2022
386,740
13,744,553
1,606,501
105,413
15,843,207
Additions
-
0
40,105
2,975
-
0
43,080
At 30 November 2023
386,740
13,784,658
1,609,476
105,413
15,886,287
Depreciation and impairment
At 1 December 2022
386,740
13,106,339
1,606,501
31,624
15,131,204
Depreciation charged in the year
-
0
213,823
124
15,812
229,759
At 30 November 2023
386,740
13,320,162
1,606,625
47,436
15,360,963
Carrying amount
At 30 November 2023
-
0
464,496
2,851
57,977
525,324
At 30 November 2022
-
0
638,214
-
0
73,789
712,003

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
£
£
Motor vehicles
-
0
73,789

Depreciation charged on assets under hire purchase agreements totalled £15,812 (2022: £31,624).

9
Stocks
2023
2022
£
£
Raw materials and consumables
875,800
832,458
Work in progress
16,267
22,396
Finished goods and goods for resale
4,007,619
2,567,640
4,899,686
3,422,494

 

Stocks are stated net of a provision for impairment of £163,539 (2022 - £262,729).

THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,477,708
4,719,512
Other debtors
334,664
325,530
Prepayments and accrued income
310,829
154,054
5,123,201
5,199,096
Deferred tax asset (note 15)
-
0
46,832
5,123,201
5,245,928
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
16,023,572
15,868,925
Total debtors
21,146,773
21,114,853
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
13
-
0
20,943
Trade creditors
6,972,714
6,795,449
Corporation tax
315,224
333,465
Other taxation and social security
33,754
28,230
Other creditors
160,388
158,198
Accruals and deferred income
1,078,055
1,504,420
8,560,135
8,840,705
12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
13
-
0
54,423
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 23 -
13
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
-
0
20,943
In two to five years
-
0
54,423
-
0
75,366

Finance lease and hire purchase creditors are secured on the assets concerned.

14
Provisions for liabilities
2023
2022
£
£
800,000
1,300,000

The provisions consist of amounts in relation to dilapidations of a previously leased site. The value of dilapidations has been agreed at £800,000.

Movements on provisions:
£
At 1 December 2022
1,300,000
Reversal of provision
(500,000)
At 30 November 2023
800,000
15
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
8,470
-
-
(25,985)
Short term timing differences
-
-
-
72,817
8,470
-
-
46,832
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
15
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Asset at 1 December 2022
(46,832)
Charge to profit or loss
55,302
Liability at 30 November 2023
8,470

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
100 Ordinary shares of £1 each
100
100
100
100

Each Ordinary share entitles the shareholder to one vote in any circumstances.

17
Related party transactions

The amounts due from The Authentic Food Group Limited included within debtors in more than one year £16,023,572 (2022 - £15,868,925).

 

The group's immediate and ultimate parent undertakings respectively Puri Investments Limited and Blueprint Limited, together with Nedgroup Trust (Jersey) Limited in its capacity as trustee of the Kamal Basran 2008 Life Interest (the ultimate controlling party) have entered into a composite guarantee and granted a debenture over the assets of the group as security for an asset based lending agreement.

 

18
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
189,394
191,874
Between two and five years
215,123
320,311
In over five years
-
0
17,171
404,517
529,356
THE AUTHENTIC FOOD COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
19
Ultimate controlling party

The immediate parent undertaking is The Authentic Food Group Limited, a company registered in England and Wales at 4-5 Robeson Way, Sharston Green Business Park, Manchester, M22 4SW.

 

The parent undertaking of the largest and smallest group for which consolidated accounts are prepared is The Authentic Food Group Limited. Consolidated accounts are publicly available and may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

 

The ultimate parent undertaking is Blueprint Limited, a company incorporated in Jersey.

 

In the opinion of the Directors the ultimate controlling party is the Kamal Basran 2008 Life Interest Trust.

20
Analysis of changes in net funds
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
2,085,537
(401,315)
1,684,222
Obligations under finance leases
(75,366)
75,366
-
2,010,171
(325,949)
1,684,222
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