A. K. Stoddart Limited
Registered number: SC033785
Annual Report
For the period ended 25 November 2023
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A. K. STODDART LIMITED
COMPANY INFORMATION
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A M Christiaanse (resigned 31 May 2024)
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W Godfrey (appointed 31 May 2024)
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T Wood (appointed 31 May 2024)
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East Mains Industrial Estate
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East Mains Industrial Estate
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Chartered Accountants & Statutory Auditor
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A. K. STODDART LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Income and Retained Earnings
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Notes to the Financial Statements
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A. K. STODDART LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 25 NOVEMBER 2023
The Directors present their Strategic Report for the period ended 25 November 2023.
The Company's principal activity continued to be that of meat processors.
Operating profit for the period amounted to £24,955 (2022 - £854,392).
Central to both our commercial and operational success is the ongoing expansion of a bespoke customer offering, built on a foundation of innovation and consistent quality. This strategy has progressively shifted our sales ledger away from the price-sensitive commodity market, fostering long-term partnerships with our customers.
The business has now established a strong reputation across all markets for its unwavering commitment to quality and consistency. By working exclusively with each customer, we have continued to strengthen these partner relationships, ensuring mutual benefits.
Throughout the period, the UK cattle market experienced tighter supply conditions, leading to a significant increase in dead weight prices compared to the previous year. Nevertheless, the company secured new long-term supply agreements with key farming partners, ensuring a consistent and reliable cattle supply.
In the second half of the year, consumer demand began to weaken due to the economic downturn, resulting in selling prices that were lower than expected given the increased cattle costs.
Export sales remain a crucial component of our trading strategy, with the Company building on the previous year’s export growth. While European customers continue to be our primary market, the Far East remains a key region for specific products. Export sales have consistently delivered better returns than the UK market and have enabled the Company to diversify its customer base globally, thereby reducing risk.
The UK labour market continues to present challenges in recruiting new staff, leading the Company to source additional skilled butchers from the Philippines. During this period, the business achieved sponsor status, allowing us full control over our recruitment process. All new staff from the Philippines are now fully integrated into the business and are under long-term contracts exclusively with the Company.
Throughout the period, the Company faced substantial inflationary pressures on general overheads, including wages. Given the broader economic downturn, these second-wave cost increases have taken longer to reflect in our selling prices. However, as of this writing, most of our key customers have accepted the necessary price adjustments.
Looking ahead, we anticipate further inflationary pressures, particularly in labour, in the coming year. Over the past trading year, the Company has focused heavily on managing and recovering overhead increases, making this our immediate priority. Consequently, less emphasis has been placed on developing new sales ledgers. Despite this, the Company has successfully secured significant new commercial opportunities with several key customers.
The Board is pleased with the focus on overhead recovery and is grateful for the on-going support from our key customers during this challenging trading period.
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A. K. STODDART LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 NOVEMBER 2023
Business review (continued)
We are also pleased to confirm that, since the reporting date, Browns Food Group Limited has made a significant investment in the group, acquiring a majority shareholding of Manifesto Foods Ltd, the Company's ultimate parent undertaking at the time. As part of this transition, two Directors, Colin Wright and Ton Christiaanse, have resigned as non-executive directors. The investment and the newly formed Board will further strengthen the group and Company and create exciting opportunities for growth, exploitation of synergies and investment in the future.
Principal risks and uncertainties
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The Directors have assessed that the main risks facing the business are animal disease, which they consider to be out of their control, and continuing pressure on margins due to recent inflationary effects around the world, the highly competitive nature of the sector and continued supply of cattle. The Directors believe that the latter risk is mitigated by the strong relationships which exist with both customers and suppliers and continued diversification into new markets.
Financial risk management objectives and policies
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The Company finances its operations through a mixture of retained profits and where necessary to fund expansion or capital expenditure programmes through bank borrowings and hire purchase.
Management's objectives are to:
∙Retain sufficient liquid funds to enable the Company to meet its day to day obligations as they fall due whilst maximising returns on surplus funds;
∙Minimise the Company's exposure to fluctuating interest rates when seeking new borrowings; and
∙Match the repayment schedule of any external borrowings or overdrafts with the expected future cash flows expected to arise from the Company's trading activities.
Financial key performance indicators
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The Directors monitor and assess on a regular basis the key performance indicators of the business. The following KPI’s are monitored closely:
∙The Company monitors turnover and cash flow related performance indicators including cash headroom and interest cover, in line with the funding requirements of the business.
∙The Company monitors operational performance and efficiency through a number of specific indicators and measures, which are regularly assessed.
∙Raw material costs and pricing to customers is regularly reviewed to ensure gross margins are understood and controlled.
∙The Company continuously reviews and monitors technical performance to ensure all factories operate at the highest level of competence and operational integrity at all times.
∙The Company places great emphasis on the importance of health and safety within the business and regularly reviews KPI’s to ensure the best possible environment for its employees and all legal requirements and processes are adhered to.
∙The Company monitors its commercial KPI’s as part of its continued commitment to ensure all customers are provided with the best possible level of service and account management.
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A. K. STODDART LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 NOVEMBER 2023
This report was approved by the board and signed on its behalf by:.
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A. K. STODDART LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 25 NOVEMBER 2023
The Directors present their report and the financial statements for the period ended 25 November 2023.
Directors' responsibilities statement
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The Directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
The loss for the period, after taxation, amounted to £396,281 (2022 - profit of £590,080).
The Directors who served during the period were:
A M Christiaanse (resigned 31 May 2024)
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Matters covered in the Strategic Report
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As permitted by Section 414C(11) of the Companies Act 2006, the Directors have elected to disclose information required to be in the Directors' Report by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 in the Strategic Report instead. The business review, principal risks and uncertainties and financial risk management objectives and policies are included within the Strategic Report on pages 1 and 2.
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A. K. STODDART LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 NOVEMBER 2023
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Directors are aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Directors have taken all the steps that ought to have been taken as Directors in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Economic impact of global events
UK businesses have faced continued uncertainties in recent years, such as the consequences of Brexit, COVID-19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
The Company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
The auditor, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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A. K. STODDART LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A. K. STODDART LIMITED
Opinion
We have audited the financial statements of A. K. Stoddart Limited (the ‘Company’) for the period ended 25 November 2023 which comprise the Statement of Income and Retained Earnings, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 25 November 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.
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.
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A. K. STODDART LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A. K. STODDART LIMITED
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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 Directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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A. K. STODDART LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A. K. STODDART LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 intend either 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.
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.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, food safety standards and anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation and the Companies Act 2006.
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A. K. STODDART LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A. K. STODDART LIMITED
In addition, we evaluated the Directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the occurrence assertion), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the Directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit 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.
Anna Marshall (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
Capital Square
58 Morrison Street
Edinburgh
EH3 8BP
30 August 2024
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A. K. STODDART LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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52 weeks ended 25 November 2023
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52 weeks ended 26 November 2022
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Interest payable and similar expenses
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Retained earnings at the beginning of the period
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(Loss)/profit for the period
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Retained earnings at the end of the period
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The notes on pages 12 to 27 form part of these financial statements.
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A. K. STODDART LIMITED
REGISTERED NUMBER: SC033785
BALANCE SHEET
AS AT 25 NOVEMBER 2023
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Debtors: amounts falling due within one year
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Cash and cash equivalents
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 27 form part of these financial statements.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
A. K. Stoddart Limited (the 'Company') is a private company, limited by shares and registered in Scotland. Registered number SC033785. The Company's registered office is 16 Dunnet Way, East Mains Industrial Estate, Broxburn, EH52 5NN.
The principal activity of the Company is that of meat processors.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006.
These financial statements have been presented in Pounds Sterling (£), this being the functional currency of the Company and currency of the primary economic environment in which the Company operates. The monetary amounts are rounded to the nearest £.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Manifesto Foods Ltd, a company registered in England & Wales, as at 25 November 2023 and these financial statements may be obtained from Number One Pride Place, Pride Park, Derby, DE24 8QR.
Competition in the labour market and inflation are impacting the Company. The Directors have prepared financial forecasts to take account of these factors and, based on these forecasts and the cash reserves of the Company, believe that the Company will continue to meet its liabilities as they fall due. The financial statements have therefore been prepared on a going concern basis.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
2.Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as 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:
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'administrative expenses' in the Statement of Income and Retained Earnings.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of Income and Retained Earnings on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
2.Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the retail method, whereby cost is measured by reducing the sales value of the inventory by the Company's gross margin. Work in progress and finished goods include labour and attributable overheads.
At each Balance Sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Income and Retained Earnings.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Statement of Income and Retained Earnings at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP, rounded to the nearest £.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income and Retained Earnings.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Income and Retained Earnings within 'finance income or costs'.
Finance costs are charged to the Statement of Income and Retained Earnings over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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Leased assets: the Company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Statement of Income and Retained Earnings so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
The Company operates two defined contribution pension schemes. The amount charged to the Statement of Income and Retained Earnings in respect of pension costs is the contributions payable in the period. Differences between the contributions payable in the period and contributions actually paid are shown as either accruals or prepayments in the Balance Sheet.
All borrowing costs are recognised in the Statement of Income and Retained Earnings in the period in which they are incurred.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
2.Accounting policies (continued)
Tax is recognised in the Statement of Income and Retained Earnings except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
No deferred tax liability is recognised in the financial statements as the amounts involved are not considered to be significant.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company’s accounting policies, which are described in note 2, 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Directors consider the key source of judgement and estimation uncertainty to be the valuation of stocks. This is reviewed on a monthly basis by the Directors in conjunction with the sales team, based on their knowledge of recent selling prices and current market conditions.
The whole of the turnover is attributable to the Company's principal activity.
Analysis of turnover by country of destination:
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Government grants receivable
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The operating profit is stated after charging/(crediting):
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Gain on disposal of tangible fixed assets
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Depreciation of tangible fixed assets
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Cost of defined contribution pension scheme
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Government grants receivable
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During the period, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's annual financial statements
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Staff costs, including Directors' remuneration, were as follows:
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Cost of defined contribution pension scheme
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The average monthly number of employees, including the Directors, during the period was as follows:
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Office and management staff
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Key management personnel remuneration
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Company pension contributions to defined contribution pension schemes
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During the period, wages and salaries were accruing to 4 members of key management personnel (2022 - 4) and retirement benefits were accruing to 2 members of key management personnel (2022 - 2) in respect of defined contribution pension schemes.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Interest payable and similar expenses
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Current tax on profits for the year
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Factors affecting tax charge for the period
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The tax assessed for the period is higher than (2022 - lower than) the standard rate of corporation tax in the UK of23% (2022 -19%). The differences are explained below:
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(Loss)/profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23% (2022 - 19%)
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Expenses not deductible for tax purposes
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Fixed asset timing differences
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Tax losses not recognised
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Total tax charge for the period
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Factors that may affect future tax charges
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There are no factors that may affect future tax charges noted at the reporting date.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Raw materials and consumables
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Amounts owed by group undertakings (note 26)
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
Average debtor days reduced in the period by 2 days (approximately £350k) after shorter payment terms were agreed with a key customer.
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Cash and cash equivalents
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Obligations under hire purchase contracts (note 19)
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Invoice discounting and revolving stock facility
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Accruals and deferred income
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The invoice discounting facility is secured over the trade debtors of the Company. The revolving stock facility is secured by a floating charge over the assets of the Company.
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Creditors: Amounts falling due after more than one year
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Obligations under hire purchase contracts (note 19)
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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The bank borrowings are secured by a standard security over the heritable properties at: 9 Old Farm Road, Heathfield Industrial Estate, Ayr; 16 Dunnet Way, East Mains Industrial Estate, Broxburn and 37A Simpson Road, East Mains Industrial Estate, Broxburn. They are also secured by a bond and floating charge over the assets of the Company. The bank loans bear interest above the bank base rate and are repayable by monthly instalments.
Subsequent to the reporting date, the bank borrowings above were repaid in full.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Hire purchase liabilities are secured on the assets to which they relate.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
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Allotted, called up and fully paid
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30,200 (2022 - 30,200) A ordinary shares of £1 each
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100 (2022 - 100) B ordinary shares of £1 each
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The 'A' and 'B' shares rank pari passu.
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Other reserves
This reserve records the nominal value of shares repurchased by the Company.
Profit and loss account
This reserve includes all current and prior periods' retained profits and losses.
Amounts owed to group undertakings in the prior year of £1,424,000 have been offset against related amounts due from group undertakings. The impact of this reallocation has been to reduce the debtor and creditor amounts previously reported. The adjustment has no impact on the overall results and net asset value of the Company as previously reported for the period ended 26 November 2022.
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A. K. STODDART LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 NOVEMBER 2023
The Company makes payments to a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the scheme and amounts to £210,631 (2022 - £193,875).
There were £26,738 (2022 - £27,749) of contributions payable at the reporting date.
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Commitments under operating leases
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At 25 November 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Plant, vehicles & other leases
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company has taken advantage of the exemption provided by FRS 102 s33.1A whereby disclosures need not be given of transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
During the period, wages and salaries of £415,995 (2022 - £446,367) were paid to Directors, and £81,900 (2022 - £73,463) was paid to defined contribution pension schemes on behalf of Directors. During the period, retirement benefits were accruing to 2 Directors (2022 - 2) in respect of defined contribution pension schemes. The highest paid Director received remuneration of £207,534 (2022 - £245,891), and the value of the Company's contributions paid to a defined contribution scheme in respect of the highest paid Director amounted to £42,846 (2022 - £21,591).
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Ultimate parent undertaking and controlling party
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At the reporting date, the Company's ultimate parent undertaking was Manifesto Foods Ltd, a company registered in England & Wales. This is the largest and smallest group for which group financial statements are drawn up. The address of Manifesto Foods Ltd is Number One Pride Place, Pride Park, Derby, DE24 8QR.
Subsequent to the reporting date, in May 2024, the Company's ultimate parent undertaking became Browns Food Group Limited.
In the opinion of the Directors there is no ultimate controlling party.
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