Company registration number 02848189 (England and Wales)
FRUITY FRESH (WESTERN) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Faulkner House
Victoria Street
Rayner Essex LLP
St Albans
Chartered Accountants
Hertfordshire
AL1 3SE
FRUITY FRESH (WESTERN) LIMITED
COMPANY INFORMATION
Director
A Chowdry
Secretary
Mrs R Chowdry
Company number
02848189
Registered office
Marlowes
Oxhey Lane
Pinner
Middlesex
NW10 0AD
Auditor
Rayner Essex LLP
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
FRUITY FRESH (WESTERN) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
FRUITY FRESH (WESTERN) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Review of the business
The results of the year and the financial position at the year end were considered satisfactory by the director who expects continued growth in the foreseeable future.
Principal risks and uncertainties
Financial instruments
The company finances its operations by a combination of internally generated cash flows, existing cash deposits and borrowings.
The company secretary manages the cash borrowings, interest rate and its main banking relationships. This is operated as a cost and risk reduction programme. Transactions of a speculative nature are not permitted.
The company has no material exposure to foreign currency movements.
The director recognises the principal risk as being:
Liquidity risk
The director manages liquidity risk by a combination of controls such as monitoring gearing levels and ensuring facilities are readily available for future use as required.
Development and performance
The directors consider the level of business and the year end position to be satisfactory.
Section 172 statement
In accordance with section 172 of the Companies Act, the director acts in the way he considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. Our director has regard, amongst other matters, to the:
likely consequences of any decisions in the long term;
interests of the company's employees;
need to foster the company's business relationships with suppliers, customer and others;
impact of the company's operations on the community and environment;
desirability of the company maintaining a reputation for high standards of business conduct; and
need to act fairly as between members of the company
As is normal for large companies, the director delegates authority for day to day management of the company to senior managers and then engage management in setting, approving and overseeing the execution of strategy and related policies. During the year, management reviewed the company's financial and operational performance; key transactions; regulation; funding and pension matters, mechanisms of stakeholder engagement and diversity and inclusion. The director reviews, discusses and approves, as necessary, all of these matters.
As set out above, decisions taken by the director consider the interests of our key stakeholders and the impacts of these decisions.
FRUITY FRESH (WESTERN) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
A Chowdry
Director
6 September 2024
FRUITY FRESH (WESTERN) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of supply and distribution of fresh foods.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
A Chowdry
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £200,000. The director does not recommend payment of a final dividend.
Future developments
The directors continue to develop the business in accordance with plans and projections.
Auditor
The auditor, Rayner Essex LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
FRUITY FRESH (WESTERN) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Brexit
Brexit brings uncertainty to most industries involved in importing goods from Europe and beyond. We are confident that our logistics infrastructure as well as strong and long standing relationships with suppliers and other stakeholders will allow continuity of receiving goods and efficient distribution of produce.
On behalf of the board
A Chowdry
Director
6 September 2024
FRUITY FRESH (WESTERN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FRUITY FRESH (WESTERN) LIMITED
- 5 -
Opinion
We have audited the financial statements of Fruity Fresh (Western) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
FRUITY FRESH (WESTERN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FRUITY FRESH (WESTERN) LIMITED (CONTINUED)
- 6 -
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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with the directors and other management, and from our commercial knowledge and experience of the food supply and distribution sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, employment, health and safety, food hygiene, environmental regulations and other relevant regulations;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
FRUITY FRESH (WESTERN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FRUITY FRESH (WESTERN) LIMITED (CONTINUED)
- 7 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Neil Heyes FCA
Senior Statutory Auditor
For and on behalf of Rayner Essex LLP
9 September 2024
Chartered Accountants
Statutory Auditor
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
FRUITY FRESH (WESTERN) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
21,942,800
21,752,331
Cost of sales
(17,623,768)
(17,279,430)
Gross profit
4,319,032
4,472,901
Administrative expenses
(3,420,269)
(3,385,700)
Other operating income
78,309
89,883
Operating profit
4
977,072
1,177,084
Interest receivable and similar income
6
321
1,441
Interest payable and similar expenses
8
(46,737)
(50,776)
Profit before taxation
930,656
1,127,749
Taxation
9
(230,396)
(224,406)
Profit for the financial year
22
700,260
903,343
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FRUITY FRESH (WESTERN) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,266,401
5,319,890
Investments
12
1,848,918
1,848,918
7,115,319
7,168,808
Current assets
Stocks
13
281,790
256,695
Debtors
14
774,967
840,478
Cash at bank and in hand
806,763
749,959
1,863,520
1,847,132
Creditors: amounts falling due within one year
15
(2,295,832)
(2,317,572)
Net current liabilities
(432,312)
(470,440)
Total assets less current liabilities
6,683,007
6,698,368
Creditors: amounts falling due after more than one year
16
(46,077)
(564,882)
Provisions for liabilities
Deferred tax liability
19
100,317
97,133
(100,317)
(97,133)
Net assets
6,536,613
6,036,353
Capital and reserves
Called up share capital
21
24,000
24,000
Profit and loss reserves
22
6,512,613
6,012,353
Total equity
6,536,613
6,036,353
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 6 September 2024
A Chowdry
Director
Company registration number 02848189 (England and Wales)
FRUITY FRESH (WESTERN) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
24,000
5,349,010
5,373,010
Year ended 31 December 2022:
Profit and total comprehensive income
-
903,343
903,343
Dividends
10
-
(240,000)
(240,000)
Balance at 31 December 2022
24,000
6,012,353
6,036,353
Year ended 31 December 2023:
Profit and total comprehensive income
-
700,260
700,260
Dividends
10
-
(200,000)
(200,000)
Balance at 31 December 2023
24,000
6,512,613
6,536,613
FRUITY FRESH (WESTERN) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,426,770
1,175,197
Interest paid
(46,737)
(50,776)
Income taxes paid
(226,815)
(169,562)
Net cash inflow from operating activities
1,153,218
954,859
Investing activities
Purchase of tangible fixed assets
(123,639)
(90,820)
Proceeds from disposal of tangible fixed assets
18,000
4,847
Interest received
321
1,441
Net cash used in investing activities
(105,318)
(84,532)
Financing activities
Repayment of bank loans
(855,009)
(919,653)
Payment of finance leases obligations
63,913
Dividends paid
(200,000)
(240,000)
Net cash used in financing activities
(991,096)
(1,159,653)
Net increase/(decrease) in cash and cash equivalents
56,804
(289,326)
Cash and cash equivalents at beginning of year
749,959
1,039,285
Cash and cash equivalents at end of year
806,763
749,959
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Fruity Fresh (Western) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Marlowes, Oxhey Lane, Pinner, Middlesex, HA5 4AL.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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:
Land and buildings Freehold
2% straight line
Fixtures, fittings & equipment
15% straight line
Motor vehicles
25% reducing balance
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.
Listed and unlisted fixed asset investments are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) 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 estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
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
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Further support was obtained during the prior year from the Government by way of rate relief on properties owned and leased by the company during the COVID-19 pandemic period. This is not subject to claw-back.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover
Supply and distribution of fresh foods
21,942,800
21,752,331
In the director's opinion, disclosure of the turnover for each class of business would be seriously prejudicial to the company's interest.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
254
Fees payable to the company's auditor for the audit of the company's financial statements
16,980
12,000
Depreciation of owned tangible fixed assets
167,766
162,972
Profit on disposal of tangible fixed assets
(8,638)
-
Cost of stocks recognised as an expense
17,623,768
17,279,430
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales/Admin/Retail/Warehouse
73
75
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,875,442
1,875,703
Social security costs
176,605
187,281
Pension costs
70,988
78,588
2,123,035
2,141,572
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
321
1,441
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
321
1,441
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
62,342
62,204
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
46,301
50,776
Other finance costs:
Interest on finance leases and hire purchase contracts
436
-
46,737
50,776
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
227,212
227,018
Deferred tax
Origination and reversal of timing differences
3,184
(2,612)
Total tax charge
230,396
224,406
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 19 -
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
930,656
1,127,749
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
232,664
214,272
Tax effect of expenses that are not deductible in determining taxable profit
(37)
12
Permanent capital allowances in excess of depreciation
10,388
11,813
Deferred tax
3,184
(2,612)
Loss on disposal of fixed assets
(2,160)
921
Change in tax rate
(13,643)
Taxation charge for the year
230,396
224,406
10
Dividends
2023
2022
£
£
Interim paid
200,000
240,000
11
Tangible fixed assets
Land and buildings Freehold
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
5,395,163
920,695
547,742
6,863,600
Additions
20,128
103,511
123,639
Disposals
(82,135)
(82,135)
At 31 December 2023
5,395,163
940,823
569,118
6,905,104
Depreciation and impairment
At 1 January 2023
472,044
693,470
378,196
1,543,710
Depreciation charged in the year
64,742
37,100
65,924
167,766
Eliminated in respect of disposals
(72,773)
(72,773)
At 31 December 2023
536,786
730,570
371,347
1,638,703
Carrying amount
At 31 December 2023
4,858,377
210,253
197,771
5,266,401
At 31 December 2022
4,923,119
227,225
169,546
5,319,890
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 20 -
Freehold land and buildings with a carrying amount of £4,923,119 (2022 - £4,987,861) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
12
Fixed asset investments
2023
2022
£
£
Listed investments
39,990
39,990
Unlisted investments
1,808,928
1,808,928
1,848,918
1,848,918
The directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
281,790
256,695
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
665,499
781,844
Other debtors
56,301
26,314
Prepayments and accrued income
53,167
32,320
774,967
840,478
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
329,517
619,644
Obligations under finance leases
18
17,836
Trade creditors
1,552,366
1,316,318
Corporation tax
227,822
227,425
Other taxation and social security
49,562
52,041
Other creditors
83,638
81,371
Accruals and deferred income
35,091
20,773
2,295,832
2,317,572
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
564,882
Obligations under finance leases
18
46,077
46,077
564,882
17
Loans and overdrafts
2023
2022
£
£
Bank loans
329,517
1,184,526
Payable within one year
329,517
619,644
Payable after one year
564,882
The long term loans provided to the company by National Westminister Bank PLC are secured by way of various fixed and floating charges over the assets of the company; including the proceeds on sale of any fixed assets, rent incurred on any properties owned by the company and the proceeds of any insurance affecting the properties or assets.
The loan of £NIL (2022: £1,000,000) relates to a Bounce Back Loan Scheme (BBLS) loan granted during year end 1 December 2020. The Bounce Back Loan Scheme (BBLS) enables businesses to access finance more quickly during the coronavirus outbreak. The loan was taken out in June 2020 with a term of 6 years, No repayments were due for the first 12 months and the government covered the interest during this period. Interest over the remaining term is charged at 2.85% over base rate (currently 0.25% at year end). This was fully paid back during the prior year end.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
18,882
In two to five years
48,779
67,661
Less: future finance charges
(3,748)
63,913
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
100,317
97,133
2023
Movements in the year:
£
Liability at 1 January 2023
97,133
Charge to profit or loss
3,184
Liability at 31 December 2023
100,317
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.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
70,988
78,588
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
20,000 Ordinary shares of £1 each
20,000
20,000
2,000 Ordinary B shares of £1 each
2,000
2,000
2,000 Ordinary C shares of £1 each
2,000
2,000
24,000
24,000
The company has three classes of shares.
Ordinary shares are entitled to one vote in any circumstances.
B shares are non voting shares.
C shares are entitled to full voting, dividend and capital distribution (including on winding up) rights. They do not confer any rights of redemption.
22
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
6,012,353
5,349,010
Profit for the year
700,260
903,343
Dividends
(200,000)
(240,000)
At the end of the year
6,512,613
6,012,353
23
Operating lease commitments
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
159,163
159,163
Between two and five years
559,153
584,533
In over five years
12,852
146,635
731,168
890,331
Lessor
The operating leases represent leases to third parties. The leases are negotiated over terms of 1-5 years and rentals are fixed for 1-5 years. There are no options in place for either party to extend the lease terms.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Operating lease commitments
(Continued)
- 24 -
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2023
2022
£
£
Within one year
80,608
63,400
Between two and five years
69,000
117,833
149,608
181,233
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
122,341
92,204
Other information
Transactions with related parties
During the year dividends of £200,000 (2022: £240,000) have been paid to the shareholders of the company who are family of Mr A Chowdry.
At the year end, the director was owed £34,771 (2022: was owed £32,504 by the company).
25
Ultimate controlling party
The ultimate controlling party is Mr A Chowdry who together with his wife owns 100% of the issued ordinary share capital.
FRUITY FRESH (WESTERN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
700,260
903,343
Adjustments for:
Taxation charged
230,396
224,406
Finance costs
46,737
50,776
Investment income
(321)
(1,441)
Gain on disposal of tangible fixed assets
(8,638)
-
Depreciation and impairment of tangible fixed assets
167,766
162,972
Movements in working capital:
Increase in stocks
(25,095)
(84,044)
Decrease in debtors
65,511
59,988
Increase/(decrease) in creditors
250,154
(140,803)
Cash generated from operations
1,426,770
1,175,197
27
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
749,959
56,804
806,763
Borrowings excluding overdrafts
(1,184,526)
855,009
(329,517)
Obligations under finance leases
-
(63,913)
(63,913)
(434,567)
847,900
413,333
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