Company Registration No. 11872358 (England and Wales)
SHAFA FARM LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
Celixir House
Stratford Business & Technology Park
Innovation Way, Banbury Road
Stratford-upon-Avon
Warwickshire
United Kingdom
CV37 7GZ
SHAFA FARM LIMITED
CONTENTS
Page
Company information
1
Director's report
2 - 3
Director's responsibilities statement
4
Independent auditor's report
5 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 29
SHAFA FARM LIMITED
COMPANY INFORMATION
- 1 -
Director
Mr A Nasser
Company number
11872358
Registered office
Farm Gate
Five Ways Road
Hatton
Warwick
Warwickshire
England
CV35 7HZ
Auditor
TC Group
Celixir House
Stratford Business & Technology Park
Innovation Way, Banbury Road
Stratford-upon-Avon
Warwickshire
United Kingdom
CV37 7GZ
SHAFA FARM LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

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 processing and preserving of poultry meat.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

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

Mr A Nasser
Auditor

TC Group 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 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

As part of our strategic plan, we have robust measures in place to strengthen our supply side. By enhancing our supply chain efficiency and securing more reliable farms , we are positioned to meet market demand more effectively. This initiative is critical for ensuring consistent and timely delivery of products to our customers.

 

We anticipate that these improvements will significantly boost our sales volume. With a more reliable and efficient supply chain, we can maintain a steady flow of products, reducing the likelihood of stockouts and delays. This will enable us to capture more sales opportunities and meet customer demand promptly.

 

Moreover, as we increase our sales, we expect our revenue to grow month on month. The improvements in our supply side are not only about meeting current demand but also about positioning ourselves for scalable growth. Enhanced supply capabilities will support larger order volumes and expand our market reach, ultimately leading to sustained revenue growth.

 

In summary, our commitment to strengthening the supply side underpins our confidence in the company's ability to continue trading in the foreseeable future. By ensuring a steady and reliable flow of products, we are laying a strong foundation for ongoing sales growth and increased revenue.

 

SHAFA FARM LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
Mr A Nasser
Director
11 September 2024
SHAFA FARM LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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:

 

 

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.

SHAFA FARM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHAFA FARM LIMITED
- 5 -
Opinion

We have audited the financial statements of Shafa Farm Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty relating to going concern

In forming our opinion, the auditors opinion is not modified in respect of this matter, we have considered the adequacy of the disclosure made in note 1 of the financial statements concerning the company's ability to continue as a going concern. The company incurred a loss after tax this year of £927,279 (2022: Loss £766,774). As at 31 December 2023 the company has net liabilities of £2,382,230 (2022 net liabilities of £1,454,951). The conditions indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The director believes that the company has sufficient financial resources to enable it to continue in operational existence for the foreseeable future meeting its liabilities as they fall due. The company is reliant on the support of the director.

 

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

 

 

SHAFA FARM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAFA FARM LIMITED
- 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 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:

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 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:

 

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.

SHAFA FARM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAFA FARM LIMITED
- 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.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

SHAFA FARM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAFA FARM LIMITED
- 8 -

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

 

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

 

Our approach was as follows:

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

SHAFA FARM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAFA FARM LIMITED
- 9 -

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

Mark Bullock FCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
11 September 2024
Celixir House
Stratford Business & Technology Park
Innovation Way, Banbury Road
Stratford-upon-Avon
Warwickshire
United Kingdom
CV37 7GZ
SHAFA FARM LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
16,356,382
14,078,692
Cost of sales
(14,466,569)
(13,187,042)
Gross profit
1,889,813
891,650
Administrative expenses
(2,437,236)
(1,951,027)
Other operating income
-
0
978
Operating loss
4
(547,423)
(1,058,399)
Interest receivable and similar income
7
113
-
0
Interest payable and similar expenses
8
(36,791)
(5,955)
Loss before taxation
(584,101)
(1,064,354)
Tax on loss
9
(343,178)
297,580
Loss for the financial year
(927,279)
(766,774)

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

SHAFA FARM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
£
£
Loss for the year
(927,279)
(766,774)
Other comprehensive income
-
-
Total comprehensive income for the year
(927,279)
(766,774)
SHAFA FARM LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
4,299,887
4,964,539
Current assets
Stocks
11
40,751
16,139
Debtors
12
825,730
1,169,398
Cash at bank and in hand
405,654
191,212
1,272,135
1,376,749
Creditors: amounts falling due within one year
13
(1,718,276)
(1,428,474)
Net current liabilities
(446,141)
(51,725)
Total assets less current liabilities
3,853,746
4,912,814
Creditors: amounts falling due after more than one year
14
(6,235,976)
(6,367,765)
Net liabilities
(2,382,230)
(1,454,951)
Capital and reserves
Called up share capital
18
1
1
Profit and loss reserves
(2,382,231)
(1,454,952)
Total equity
(2,382,230)
(1,454,951)

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 11 September 2024
Mr A Nasser
Director
Company registration number 11872358 (England and Wales)
SHAFA FARM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1
(688,178)
(688,177)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(766,774)
(766,774)
Balance at 31 December 2022
1
(1,454,952)
(1,454,951)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(927,279)
(927,279)
Balance at 31 December 2023
1
(2,382,231)
(2,382,230)
SHAFA FARM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
378,884
751,891
Interest paid
(36,791)
(5,955)
Income taxes refunded
-
0
6,775
Net cash inflow from operating activities
342,093
752,711
Investing activities
Purchase of tangible fixed assets
(276,086)
(750,521)
Interest received
113
-
0
Net cash used in investing activities
(275,973)
(750,521)
Financing activities
Payment of finance leases obligations
148,322
88,308
Net cash generated from financing activities
148,322
88,308
Net increase in cash and cash equivalents
214,442
90,498
Cash and cash equivalents at beginning of year
191,212
100,714
Cash and cash equivalents at end of year
405,654
191,212
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Shafa Farm Limited is a private company limited by shares incorporated in England and Wales. The registered office is Farm Gate, Five Ways Road, Hatton, Warwick, Warwickshire, England, CV35 7HZ.

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
Change in accounting estimate

In the current year, the following new and revised Standards and Interpretations have been adopted by the company and have an effect on the current period may have an effect on future periods:

 

The useful estimated life of motor vehicles has changed from 33% to 25% straight line basis.

1.3
Going concern

The financial statements have been prepared on a going concern basis despite a loss after tax this year of £927,279 (2022: Loss £766,774). As at 31 December 2023 the company has net liabilities of £2,382,230 (2022 net liabilities of £1,454,951).The conditions indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The director believes that the company has sufficient financial resources to enable it to continue in operational existence for the foreseeable future meeting its liabilities as they fall due. The company is reliant on the support of the director.

1.4
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.

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.5
Tangible fixed assets

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

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

Leasehold improvements
15% Straight line basis
Plant and equipment
15% Straight line basis
Fixtures and fittings
15% Straight line basis
Motor vehicles
33% - 25% Straight line basis

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

1.6
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.

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.7
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.

1.8
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.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

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

 

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

Basic financial assets

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

Other financial assets

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

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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

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.

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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.

1.10
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.

1.11
Taxation

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

Current tax

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

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.12
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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

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

 

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

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

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
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,356,382
14,078,692
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 21 -
2023
2022
£
£
Other revenue
Interest income
113
-
4
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Exchange losses
1,155
6,761
Depreciation of owned tangible fixed assets
940,738
884,985
Operating lease charges
71,200
71,200
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,500
-
0

 

6
Employees

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

2023
2022
Number
Number
54
42
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 22 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,316,755
1,049,140
Social security costs
126,012
95,709
Pension costs
25,897
28,103
1,468,664
1,172,952
Redundancy payments made or committed
11,713
-
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
113
-
0
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
113
-
0
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
36,791
5,955
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
(6,774)
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 23 -
Deferred tax
Origination and reversal of timing differences
343,178
(290,806)
Total tax charge/(credit)
343,178
(297,580)

The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(584,101)
(1,064,354)
Expected tax charge based on the standard rate of corporation tax in the UK of 0% (2022: 0%)
-
0
-
0
Change in unrecognised deferred tax assets
343,178
(297,580)
Taxation charge/(credit) for the year
343,178
(297,580)
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
10
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
987,014
4,523,060
158,146
201,729
5,869,949
Additions
-
0
27,916
259
247,911
276,086
At 31 December 2023
987,014
4,550,976
158,405
449,640
6,146,035
Depreciation and impairment
At 1 January 2023
148,052
673,645
18,070
65,643
905,410
Depreciation charged in the year
148,052
679,560
23,751
89,375
940,738
At 31 December 2023
296,104
1,353,205
41,821
155,018
1,846,148
Carrying amount
At 31 December 2023
690,910
3,197,771
116,584
294,622
4,299,887
At 31 December 2022
838,962
3,849,415
140,076
136,086
4,964,539

The carrying value of tangible fixed assets included £96,525 (2022: £166,164) in respect of assets held under hire purchase contracts.

11
Stocks
2023
2022
£
£
Raw materials and consumables
40,751
16,139
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
806,188
775,502
Other debtors
3,750
27,556
Prepayments and accrued income
15,792
23,162
825,730
826,220
Deferred tax asset (note 16)
-
0
343,178
825,730
1,169,398
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
94,293
64,038
Trade creditors
1,207,274
1,193,583
Taxation and social security
48,992
26,739
Other creditors
4,528
4,992
Accruals and deferred income
363,189
139,122
1,718,276
1,428,474
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
212,276
94,209
Amounts owed to group undertakings
4,574,839
4,492,380
Other creditors
1,448,861
1,781,176
6,235,976
6,367,765
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
94,293
64,038
In two to five years
212,276
94,209
306,569
158,247

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.

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
16
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
486,228
343,178
Tax losses
(486,228)
-
-
343,178
2023
Movements in the year:
£
Asset at 1 January 2023
(343,178)
Charge to profit or loss
343,178
Liability at 31 December 2023
-

 

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
25,897
28,103

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.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
1 of 100p each
1
1
1
1
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
19
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
71,200
71,200
Between two and five years
356,000
356,000
In over five years
101,460
172,660
528,660
599,860
20
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Transactions with related party
9,642
962,684
409,642
-
2023
2022
Amounts due to related parties
£
£
Transactions with related party
(562,685)
(962,685)
21
Directors' transactions

 

 

SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Directors' transactions
(Continued)
- 28 -

Interest free loans have been granted by the company to its directors as follows:

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Mr A Nasser - amounts paid to the company
-
818,491
116,533
(48,848)
886,176
818,491
116,533
(48,848)
886,176
22
Ultimate controlling party

Shafa Investments Limited is regarded by the director as being the immediate parent company,

 

The registered address of the immediate parent company, is Farm Gate, Five Ways Road, Hatton, England, CV35 7HZ.

The immediate and ultimate parent undertaking is Shafa Investments Limited which is incorporated in UK.

 

At the date of approval of these financial statements, the smallest and the largest group in which the company's accounts are consolidated is that headed by Shafa Investments Limited, the accounts of which can be obtained from Farm Gate, Five Ways Road, Hatton, England, CV35 7HZ.

23
Cash generated from operations
2023
2022
£
£
Loss for the year after tax
(927,279)
(766,774)
Adjustments for:
Taxation charged/(credited)
343,178
(297,580)
Finance costs
36,791
5,955
Investment income
(113)
-
0
Depreciation and impairment of tangible fixed assets
940,738
884,985
Movements in working capital:
Increase in stocks
(24,612)
(15,997)
Decrease/(increase) in debtors
490
(396,946)
Increase in creditors
9,691
1,338,248
Cash generated from operations
378,884
751,891
SHAFA FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
191,212
214,442
405,654
Obligations under finance leases
(158,247)
(148,322)
(306,569)
32,965
66,120
99,085
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