Company registration number SC298811 (Scotland)
CAKE DECOR LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
CAKE DECOR LTD
COMPANY INFORMATION
Directors
A Downs
U Osmundsen
T Osmundsen
C Louwerse
(Appointed 15 December 2023)
D Harvey
Secretary
A Downs
Company number
SC298811
Registered office
2 Little Drum Road
Orchardton Woods
Cumbernauld
Glasgow
G68 9LH
Auditor
Azets Audit Services
6th Floor, Bank House
8 Cherry Street
Birmingham
United Kingdom
B2 5AL
CAKE DECOR LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
CAKE DECOR LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report for the year ended 31 March 2023.

Fair review of the business
The company's key financial indicators during the year were as follows:
2023
2022
£
£
Turnover
17,467,668
13,535,821
Total operating profit
1,115,757
1,239,767
Profit after tax
964,760
918,777
Shareholders' funds
9,534,295
8,569,535

The business saw a sales increase of 29% during the year arising from both increasing volume and number of retailers. Despite the increasing sales, total operating profit saw a decline of 10%. Key causes of this decline have been the increase in raw material prices, increasing staff numbers to keep in line with production and inflated energy costs.

Principal risks and uncertainties

The directors have identified the following risks as those significant to the future prospects of the business: loss of a key supplier, loss or economic failure of a key customer, contamination and product recall. The directors consider that the company has rigorous controls in place to mitigate these risks as far as it is possible to do so.

 

Supply Chain and Inflation

The ongoing general supply chain issues arising from the conflict in Ukraine, continued to provide pressure on general price inflation. Group and company procurement resources plan ahead to establish raw material requirements and secure deliveries as well as to negotiate improved bulk pricing terms. In respect to input prices, these are monitored closely and selling prices adjusted appropriately.

 

Credit risk

The company has implemented policies that require appropriate credit checks on potential customers before new accounts are accepted. Internal controls are in place to ensure all customer balances are continually monitored and the board closely oversees credit provided by the company to its customers.

 

Interest rate risk

The company has interest bearing liabilities. Interest bearing liabilities are inter-group borrowing facilities and finance lease agreements on which interest is charged at a floating and fixed rates respectively.

 

Liquidity and cash flow risk

Through the retention of profits and use of group treasury facilities the company has sufficient available funds for operations and planned expansions. Any new debt finance would have to be approved by the board of directors before it was taken on. Cash flow is closely monitored and appropriate facilities are available through Orkla ASA group treasury.

CAKE DECOR LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Key performance indicators

The directors prepare forecasts and budgets that are monitored for variance through management accounts on a monthly basis to maintain and predict the profitability and cashflow of the business.

 

The company also monitors

- Customer service

- Quality

- Productivity

 

Despite the significant issues directors highlighted here, overall the directors remain satisfied with the overall financial performance during the period believe the company remains in a strong financial position.

On behalf of the board

A Downs
Director
13 September 2024
CAKE DECOR LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activity of the company continued to be that of the manufacture, supply and distribution of cake decorations.

Results and dividends

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

No dividends were paid or declared during the year (2022: nil). No dividends have been declared post year end.

Directors

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

A Downs
W Donnelly
(Resigned 6 May 2022)
U Osmundsen
T Osmundsen
C Louwerse
(Appointed 15 December 2023)
D Harvey
R Cooke
(Resigned 16 June 2023)
S Morrow
(Appointed 15 December 2023 and resigned 13 April 2024)
Auditor

Azets Audit Services were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CAKE DECOR LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 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.

Going Concern

The directors, after making enquiries and having considered the company's business, its financial plans and

the facilities available to finance the business, have a reasonable expectation that the company has adequate

resources to continue in operational existence for the foreseeable future. The directors have received

confirmation from Orkla Food Ingredients AS, that it will provide ongoing financial support if required to the extent

necessary to enable the Company to meet its financial liabilities as the fall due for a period of twelve months

from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern

basis in preparing the financial statements.

 

On behalf of the board
A Downs
Director
13 September 2024
CAKE DECOR LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CAKE DECOR LTD
- 5 -

Qualified opinion

We have audited the financial statements of Cake Decor Ltd (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the finanical 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

 

Basis for qualified opinion

We were not appointed as auditor of the company until after 31 March 2023 and thus did not observe the counting of physical stock at the end of the year. We were unable to satisfy ourselves by alternative means concerning the stocks quantities held at 31 March 2023, which are included in the balance sheet at £3,043,090, by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the stocks balance to be required, the strategic report would also need to be amended.

 

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 qualified 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.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

CAKE DECOR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CAKE DECOR LTD
- 6 -

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.

 

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stocks quantities of £3,043,090 held at 31 March 2023. We have concluded that where the other information refers to the stocks balance or related balances such as cost of sales, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

 

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, 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 and the directors’ report.

 

Arising solely from the limitation on the scope of our work relating to stocks, referred to above:

 

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

 

Responsibilities of directors

As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

CAKE DECOR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CAKE DECOR LTD
- 7 -
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.

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

CAKE DECOR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CAKE DECOR LTD
- 8 -
Tom Mullard ACA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
13 September 2024
Chartered Accountants
Statutory Auditor
6th Floor, Bank House
8 Cherry Street
Birmingham
United Kingdom
B2 5AL
CAKE DECOR LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
Notes
£
£
Turnover
2
17,467,668
13,535,821
Cost of sales
(11,052,681)
(8,347,606)
Gross profit
6,414,987
5,188,215
Administrative expenses
(5,312,397)
(3,951,766)
Other operating income
2
13,167
3,318
Operating profit
5
1,115,757
1,239,767
Interest receivable and similar income
2
66,689
36,306
Interest payable and similar expenses
6
(39,396)
(27,513)
Profit before taxation
1,143,050
1,248,560
Tax on profit
7
(178,290)
(329,783)
Profit for the financial year
964,760
918,777

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

CAKE DECOR LTD
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
3,254,923
2,694,468
Current assets
Stocks
9
3,043,090
2,589,532
Debtors
10
9,390,334
6,178,847
Cash at bank and in hand
816,758
229,460
13,250,182
8,997,839
Creditors: amounts falling due within one year
11
(3,219,591)
(2,659,257)
Net current assets
10,030,591
6,338,582
Total assets less current liabilities
13,285,514
9,033,050
Creditors: amounts falling due after more than one year
12
(3,272,528)
(87,635)
Provisions for liabilities
Deferred tax liability
15
478,691
375,880
(478,691)
(375,880)
Net assets
9,534,295
8,569,535
Capital and reserves
Called up share capital
17
32,090
32,090
Share premium account
216,320
216,320
Profit and loss reserves
9,285,885
8,321,125
Total equity
9,534,295
8,569,535
The financial statements were approved by the board of directors and authorised for issue on 13 September 2024 and are signed on its behalf by:
A Downs
Director
Company Registration No. SC298811
CAKE DECOR LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital   (note 17)
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2021
30,010
-
0
7,402,348
7,432,358
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
918,777
918,777
Issue of shares
2,080
216,320
-
218,400
Balance at 31 March 2022
32,090
216,320
8,321,125
8,569,535
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
964,760
964,760
Balance at 31 March 2023
32,090
216,320
9,285,885
9,534,295
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information

Cake Decor Ltd is a private company limited by shares incorporated in Scotland. The registered office is 2 Little Drum Road, Orchardton Woods, Cumbernauld, Glasgow, G68 9LH.

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 pound.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

Cake Decor Ltd is a wholly owned subsidiary of Orkla ASA and the results of Cake Decor Ltd are included in the consolidated financial statements of Orkla ASA which are available from PO Box 423, Skoyen, N-0213 Oslo, Norway.

1.2
Going concern

The directors, after making enquiries and having considered the company's business, its financial plans andtrue

the facilities available to finance the business, have a reasonable expectation that the company has adequate

resources to continue in operational existence for the foreseeable future. The directors have received

confirmation from Orkla Food Ingredients ASA, that it will provide ongoing financial support if required to the extent

necessary to enable the Company to meet its financial liabilities as they fall due for a period of twelve months

from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern

basis in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -

Turnover from the sale of goods is recognised when the goods are delivered to the customer. Turnover from the supply of goods represents the value of goods provided under contracts to the extent that there is a right to consideration and is recorded at the value of the consideration due.

 

Where the contract has only been partially completed at the balance sheet date, turnover represents the value of the service provided to date based on a proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2% on cost
Property improvements
10% on cost
Plant and equipment
10% on cost
Fixtures and fittings
15% on cost
Motor vehicles
25% reducing balance
Office equipment
35% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

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

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Stocks

Stocks are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

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’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
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.

1.11
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.

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.

1.14
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.15
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.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,725,261
13,177,424
Europe
742,407
358,397
17,467,668
13,535,821
2023
2022
£
£
Other revenue
Interest income
66,689
36,306
Grants received and released
13,167
1,811
Sundry income
-
1,507
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
3
Employees

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

2023
2022
Number
Number
108
97

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,518,814
3,021,868
Social security costs
318,018
255,837
Pension costs
240,536
112,153
4,077,368
3,389,858
4
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
343,749
397,832
Company pension contributions to defined contribution schemes
96,371
29,749
440,120
427,581

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
198,000
183,528
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
5
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
99,801
46,146
Research and development costs
7,084
8,362
Government grants
(13,167)
(1,811)
Fees payable to the company's auditor for the audit of the company's financial statements
40,000
10,968
Fees payable to the company's auditor for non-audit services
7,310
-
Depreciation of owned tangible fixed assets
366,444
318,340
Depreciation of tangible fixed assets held under finance leases
10,307
16,648
Loss/(profit) on disposal of tangible fixed assets
90
(5,327)
Operating lease charges
39,265
37,379
6
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
15,302
Interest payable to group undertakings
28,888
-
0
Interest on finance leases and hire purchase contracts
10,508
12,211
39,396
27,513
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
131,391
56,471
Payment for group relief
(55,912)
158,629
Total current tax
75,479
215,100
Deferred tax
Origination and reversal of timing differences
102,811
114,683
Total tax charge
178,290
329,783
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
7
Taxation
(Continued)
- 20 -

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
1,143,050
1,248,560
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
217,180
237,226
Tax effect of expenses that are not deductible in determining taxable profit
4,402
-
0
Adjustments in respect of prior years
(23,892)
-
0
Effect of change in corporation tax rate
30,684
(90,211)
Group relief
-
0
158,629
Disallow/(Relief) on pension contributions
-
0
(10,131)
Other movement
-
0
34,270
Enhanced capital allowances
(50,084)
-
0
Taxation charge for the year
178,290
329,783
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
8
Tangible fixed assets
Freehold land and buildings
Property improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Office equipment
Total
£
£
£
£
£
£
£
Cost
At 1 April 2022
1,135,618
575,920
2,883,012
70,902
97,744
159,796
4,922,992
Additions
-
0
69,460
746,471
96,858
-
0
26,007
938,796
Disposals
-
0
-
0
(1,800)
-
0
-
0
-
0
(1,800)
At 31 March 2023
1,135,618
645,380
3,627,683
167,760
97,744
185,803
5,859,988
Depreciation and impairment
At 1 April 2022
184,210
270,654
1,537,463
50,392
47,801
138,004
2,228,524
Depreciation charged in the year
22,713
54,542
257,215
7,440
12,486
22,355
376,751
Eliminated in respect of disposals
-
0
-
0
(210)
-
0
-
0
-
0
(210)
At 31 March 2023
206,923
325,196
1,794,468
57,832
60,287
160,359
2,605,065
Carrying amount
At 31 March 2023
928,695
320,184
1,833,215
109,928
37,457
25,444
3,254,923
At 31 March 2022
951,408
305,266
1,345,549
20,510
49,943
21,792
2,694,468
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
8
Tangible fixed assets
(Continued)
- 22 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Motor vehicles
30,922
49,942
9
Stocks
2023
2022
£
£
Raw materials and consumables
1,167,216
997,680
Finished goods and goods for resale
1,875,874
1,591,852
3,043,090
2,589,532
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,659,398
2,141,686
Corporation tax recoverable
181,615
266,479
Amounts owed by group undertakings
6,147,863
3,517,011
Other debtors
135,969
187,010
Prepayments and accrued income
265,489
66,661
9,390,334
6,178,847

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
-
0
169,125
Obligations under finance leases
13
80,468
158,832
Trade creditors
1,957,851
1,629,777
Amounts owed to group undertakings
344,477
-
0
Corporation tax
187,862
141,335
Other taxation and social security
89,064
104,590
Government grants
4,000
10,000
Other creditors
24,400
161,737
Accruals and deferred income
531,469
283,861
3,219,591
2,659,257

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
13
-
0
80,468
Loans from group undertakings
14
3,272,528
-
0
Government grants
-
0
7,167
3,272,528
87,635

Funds were received from the ultimate controlling party, Orkla ASA, for long term funding.

 

Post year end, the loan counterparty was transferred from Orkla ASA to one of its subsidiary undertakings, Orkla Food Ingredients AS. All other terms of the loan remain unchanged.

 

The amount is due for repayment on 15 January 2025. Interest is accrued on a monthly basis and the rate is

determined every month by Orkla ASA as being equal to the six month interbank rate plus a margin of 1.00%

and a risk mark-up. The amount owed is unsecured.

 

13
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
80,468
158,832
In two to five years
-
0
80,468
80,468
239,300
CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
14
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
-
0
169,125
Loans from group undertakings
3,272,528
-
0
3,272,528
169,125
Payable within one year
-
0
169,125
Payable after one year
3,272,528
-
0

RSB Invoice Finance Limited holds a floating charge over all property and assets of the company.

15
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
496,541
375,880
Other short term timing differences
(17,850)
-
478,691
375,880
2023
Movements in the year:
£
Liability at 1 April 2022
375,880
Charge to profit or loss
102,811
Liability at 31 March 2023
478,691
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
240,536
112,153

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.

CAKE DECOR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
32,090
32,090
32,090
32,090

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.

During the prior year the company issued 2,080 Ordinary £1 shares for a consideration of £218,400.

18
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
31,008
39,265
Between two and five years
43,455
74,463
74,463
113,728
19
Related party transactions
Transactions with related parties

The company has taken advantage of the exemptions, available in section 33.1A and 1.12 (e) of the Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group and key management personnel compensation.

20
Directors' transactions

There were no disclosable transactions with directors during the year and there were no balances outstanding to/from directors at 31 March 2023. In the prior year the company advanced £261,121 and charged interest of £34,808 to W Donnelly. W Donnelly repaid a total of £1,944,923 during the prior year and the closing balance at 31 March 2022 was £nil.

21
Ultimate controlling party

The immediate parent company is NIC Enterprises Limited, a company incorporated in England and Wales, which holds 100% of the share capital of Cake Decor Limited.

 

The ultimate parent company and controlling party is Orkla ASA, a company incorporated in Norway. The accounts are included within the consolidated accounts of Orkla ASA which are publically available from Orkla ASA, P.O. Box 423, Skoyen, N-0213 Oslo, Norway.

2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2024.100W DonnellyU OsmundsenT OsmundsenC LouwerseD HarveyR CookeS MorrowS MorrowA DownsfalsefalseSC2988112022-04-012023-03-31SC298811bus:CompanySecretaryDirector12022-04-012023-03-31SC298811bus:Director22022-04-012023-03-31SC298811bus:Director32022-04-012023-03-31SC298811bus:Director42022-04-012023-03-31SC298811bus:Director52022-04-012023-03-31SC298811bus:CompanySecretary12022-04-012023-03-31SC298811bus:Director12022-04-012023-03-31SC298811bus:Director62022-04-012023-03-31SC298811bus:Director72022-04-012023-03-31SC298811bus:Director82022-04-012023-03-31SC298811bus:RegisteredOffice2022-04-012023-03-31SC2988112021-04-012022-03-31SC298811core:RetainedEarningsAccumulatedLosses2021-04-012022-03-31SC298811core:RetainedEarningsAccumulatedLosses2022-04-012023-03-31SC2988112023-03-31SC298811core:ShareCapital2023-03-31SC298811core:ShareCapital2022-03-31SC298811core:SharePremium2023-03-31SC298811core:SharePremium2022-03-31SC298811core:RetainedEarningsAccumulatedLosses2023-03-31SC298811core:RetainedEarningsAccumulatedLosses2022-03-31SC2988112022-03-31SC298811core:ShareCapital2021-03-31SC298811core:SharePremium2021-03-31SC298811core:RetainedEarningsAccumulatedLosses2021-03-31SC2988112021-03-31SC298811core:LandBuildingscore:OwnedOrFreeholdAssets2023-03-31SC298811core:LeaseholdImprovements2023-03-31SC298811core:PlantMachinery2023-03-31SC298811core:FurnitureFittings2023-03-31SC298811core:MotorVehicles2023-03-31SC298811core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2023-03-31SC298811core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-31SC298811core:LeaseholdImprovements2022-03-31SC298811core:PlantMachinery2022-03-31SC298811core:FurnitureFittings2022-03-31SC298811core:MotorVehicles2022-03-31SC298811core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-03-31SC298811core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-31SC298811core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-31SC298811core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-31SC298811core:Non-currentFinancialInstrumentscore:AfterOneYear2022-03-31SC298811core:CurrentFinancialInstruments2023-03-31SC298811core:CurrentFinancialInstruments2022-03-31SC298811core:Non-currentFinancialInstruments2023-03-31SC298811core:Non-currentFinancialInstruments2022-03-31SC298811core:LandBuildingscore:OwnedOrFreeholdAssets2022-04-012023-03-31SC298811core:LeaseholdImprovements2022-04-012023-03-31SC298811core:PlantMachinery2022-04-012023-03-31SC298811core:FurnitureFittings2022-04-012023-03-31SC298811core:MotorVehicles2022-04-012023-03-31SC298811core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-04-012023-03-31SC298811core:UKTax2022-04-012023-03-31SC298811core:UKTax2021-04-012022-03-31SC29881112022-04-012023-03-31SC29881112021-04-012022-03-31SC29881122022-04-012023-03-31SC29881122021-04-012022-03-31SC29881132022-04-012023-03-31SC29881132021-04-012022-03-31SC298811core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-31SC298811core:LeaseholdImprovements2022-03-31SC298811core:PlantMachinery2022-03-31SC298811core:FurnitureFittings2022-03-31SC298811core:MotorVehicles2022-03-31SC298811core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-03-31SC2988112022-03-31SC298811core:WithinOneYear2023-03-31SC298811core:WithinOneYear2022-03-31SC298811core:BetweenTwoFiveYears2023-03-31SC298811core:BetweenTwoFiveYears2022-03-31SC298811bus:PrivateLimitedCompanyLtd2022-04-012023-03-31SC298811bus:FRS1022022-04-012023-03-31SC298811bus:Audited2022-04-012023-03-31SC298811bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP