Company registration number 08718623 (England and Wales)
KYMEL TRADING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
KYMEL TRADING LIMITED
COMPANY INFORMATION
Directors
P Mackings
K Mackings
L J Miller
V A Mackings
R A Smith
K G Weatherby
(Appointed 1 May 2023)
Secretary
L J Miller
Company number
08718623
Registered office
Kymel House
Boker Lane
East Boldon
Tyne And Wear
United Kingdom
NE36 0RY
Auditor
Azets Audit Services
Bede House
Belmont Business Park
DURHAM
United Kingdom
DH1 1TW
Business address
Trenchers
New Quay Road
Whitby
North Yorkshire
YO21 1DH
KYMEL TRADING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
KYMEL TRADING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Fair Review of the Business

The Company operates a restaurant, known as Trenchers. The local competition is largely comprised of smaller companies and privately owned restaurants.

The Company continues to monitor changing trends and tastes and tailors its offerings and marketing activity to compete effectively with other operators in the market, and with the many other activities that compete for the disposable income of our target age customers. Recent general consumer confidence in the UK has been growing, largely due to the recent pandemic now being behind us and whilst our target customers appear less sensitive to economic downturn, the effects of recent increases in the general cost of living are yet to be fully realised. The restaurant sector however has continued to attract more of consumers disposable income over recent years and especially local to the restaurant, with the recent popularity of staycations. To capitalise on this the company has extended the courtyard of the restaurant, which was completed post year end, to enable us to seat more customers and increase trade.

The Company has continued to trade well in the restaurant sector, with a successful Summer period in particular, despite the poor weather. Cash flow from operating activities has been positive during the period and post year end, enabling the company to continue to service creditors as they became due. As a consequence, cash resources remain strong at the balance sheet date.

Principal Risks and Uncertainties

The principal risks and uncertainties that could affect the Company's business are summarised below:

Internal risks

High proportion of fixed overheads and variable revenues

A significant proportion of the Company's cost base remains constant notwithstanding changes to the level of revenues; therefore, any significant changes in the level of the Company's revenues could significantly affect the level of earnings and cash flows. While the Company considers it currently operates with a lean fixed cost base, this remains an area of continuing focus going forward.

Failure to ensure brands evolve in relation to changes in consumer taste

The market in which the Company operates is subject to changes in fashions and trends, and the Company is exposed to the risk that its innovations in venue format and content do not keep up with changes in consumer tastes. The Company continues to closely monitor changes in the marketplace and adapts its offering to protect and secure its future revenue opportunities.

Health and safety

Health and safety is taken very seriously by the Company. The risk of non-compliance with health and safety legislation is minimised through comprehensive training and an active in-house team who regularly review and develop policies and procedures to maintain standards. Furthermore, the Company carries substantial public and employer's liability insurance cover, in order to minimise the financial impact of any claim that might arise as a consequence of a failure in health and safety regulatory compliance.

External risks

Interest rate movements

Interest rates are currently not seen as a significant risk despite the incremental increases in the base rate recently. The level of interest rates is constantly monitored and it is the Company's intention to look to fix rates when it is believed they are at the lowest point in the cycle with the outlook being for increases.

Loss of licences

The Company has a dedicated and experienced central team to monitor all licensing related matters, working closely with the operations management team and local licensing authorities. This is backed up with centralised incident reporting and follow-up, including liaison with licensing authorities for early warning of potential issues. Every effort is made to ensure that managers and supervisors are fully conversant with current licensing legislation and their responsibilities under it.

KYMEL TRADING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal Risks and Uncertainties Continued

Uncertainties

Economic uncertainty

The Company is competing for a share of the disposable income of its target customers so revenue is vulnerable to the impact of the unprecedented events such as the recent pandemic and economic uncertainty caused by unexpected pressures on household incomes.

Seasonality and weather

The number of admissions in the Company's venues is considerably increased during holiday periods, especially Christmas and New Year, and over bank holiday periods. Similarly the admissions and revenue levels are generally lower in the early months of the calendar year, compared to other periods. The Company's revenues can also be adversely impacted by extended periods of extreme weather conditions, which could deter customers from travelling to the area where the business is located.

Development and Performance

With the lifting of covid restrictions and the continuing popularity of "staycations" throughout the current year and beyond, the company has been able to make a rapid recovery in turnover and profitability. The directors are now optimistic that without further unexpected events the company will continue to grow the level of trade during 2024.

The results for the Company for the year are shown in more detail on page 8, with the significant financial key performance indicators outlined below.

Key Performance Indicators

The Company undertakes comprehensive business planning to define long-term strategic objectives and goals. Operational plans are considered utilising financial and non-financial KPIs. Business performance, measured by KPIs which include monitoring of actual against previous comparative periods, is reported to the Board on a monthly basis.

The Company aims to achieve a healthy gross profit margin on all wet and dry sales. This is monitored monthly using independent stocktakers and throughout the majority of the financial period this has been achieved.

The key financial KPIs for the Company include:

 

Year ended

Year ended

 

31-Dec

31-Dec

 

2023

2022

 

 

 

Turnover (£)

3,666,980

3,411,649

Gross profit margin (%)

26.1

21.4

Profit before taxation (£)

283,309

375,652

Net Assets (£)

3,400,282

3,194,215

 

On behalf of the board

K Mackings
Director
6 September 2024
KYMEL TRADING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Results and dividends

The results for the year are set out on page 8.

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

Directors

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

P Mackings
K Mackings
L J Miller
V A Mackings
R A Smith
K G Weatherby
(Appointed 1 May 2023)
Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

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.

KYMEL TRADING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
K Mackings
Director
6 September 2024
KYMEL TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KYMEL TRADING LIMITED
- 5 -
Opinion

We have audited the financial statements of Kymel Trading 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

KYMEL TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KYMEL TRADING LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

KYMEL TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KYMEL TRADING LIMITED
- 7 -

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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Joanne Regan FCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
16 September 2024
Chartered Accountants
Statutory Auditor
Bede House
Belmont Business Park
DURHAM
United Kingdom
DH1 1TW
KYMEL TRADING LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
3,666,980
3,411,649
Cost of sales
(2,709,477)
(2,679,906)
Gross profit
957,503
731,743
Administrative expenses
(640,147)
(564,637)
Other operating income
62,096
246,000
Operating profit
4
379,452
413,106
Interest receivable and similar income
7
6,397
9,414
Interest payable and similar expenses
8
(102,540)
(46,868)
Profit before taxation
283,309
375,652
Tax on profit
9
(77,242)
(109,525)
Profit for the financial year
206,067
266,127

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

KYMEL TRADING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
206,067
266,127
Other comprehensive income
-
-
Total comprehensive income for the year
206,067
266,127
KYMEL TRADING LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Negative goodwill
10
(284)
(35,156)
Tangible assets
11
4,750,134
4,164,900
Current assets
Stocks
12
25,200
24,562
Debtors
13
444,034
524,675
Cash at bank and in hand
960,000
758,638
1,429,234
1,307,875
Creditors: amounts falling due within one year
14
(638,338)
(1,828,176)
Net current assets/(liabilities)
790,896
(520,301)
Total assets less current liabilities
5,540,746
3,609,443
Creditors: amounts falling due after more than one year
15
(1,659,138)
-
0
Provisions for liabilities
Deferred tax liability
17
481,326
415,228
(481,326)
(415,228)
Net assets
3,400,282
3,194,215
Capital and reserves
Called up share capital
19
1
1
Revaluation reserve
1,524,412
1,536,681
Profit and loss reserves
1,875,869
1,657,533
Total equity
3,400,282
3,194,215
The financial statements were approved by the board of directors and authorised for issue on 6 September 2024 and are signed on its behalf by:
K Mackings
Director
Company Registration No. 08718623
KYMEL TRADING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
1
1,536,681
1,391,406
2,928,088
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
266,127
266,127
Balance at 31 December 2022
1
1,536,681
1,657,533
3,194,215
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
206,067
206,067
Transfers
-
(12,269)
12,269
-
Balance at 31 December 2023
1
1,524,412
1,875,869
3,400,282
KYMEL TRADING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
488,304
650,762
Interest paid
(102,540)
(46,868)
Income taxes refunded/(paid)
16,305
(126,779)
Net cash inflow from operating activities
402,069
477,115
Investing activities
Purchase of tangible fixed assets
(672,531)
(94,273)
Proceeds from disposal of tangible fixed assets
18,000
-
0
Repayment/(advances) of loans
97,183
(239,930)
Interest received
6,397
9,414
Net cash used in investing activities
(550,951)
(324,789)
Financing activities
Proceeds from new bank loans
427,910
-
0
Repayment of bank loans
(77,666)
(105,547)
Net cash generated from/(used in) financing activities
350,244
(105,547)
Net increase in cash and cash equivalents
201,362
46,779
Cash and cash equivalents at beginning of year
758,638
711,859
Cash and cash equivalents at end of year
960,000
758,638
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Kymel Trading Limited is a private company limited by shares incorporated in England and Wales. The registered office is Kymel House, Boker Lane, East Boldon, Tyne And Wear, United Kingdom, NE36 0RY. The principal place of business is Trenchers, New Quay Road, Whitby, North Yorkshire, YO21 1DH.

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. The principal accounting policies adopted are set out below.

1.2
Going concern

At the time of approving the financial statementtrues, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

The Company's forecasts and projections, taking account of reasonable, possible changes in trading performance, suggest the company is expected to continue to be profitable, cash generative and to have a sufficient level of financial resources. Therefore the directors believe that the Company is well placed to manage its business risks successfully. In particular, at the year end the Company had cash at bank of £960,000 and net assets of £3.4million.

Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to customers during the period. Turnover is recognised when the goods and services have been provided and paid for at the point of delivery. The turnover of the company is derived entirely from its principal activities carried out in the United Kingdom.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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.

KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -

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:

Freehold property
250 years
Fixtures and fittings
10 years
Motor vehicles
5 years

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 and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

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

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.

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.

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.

KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

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.

KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price 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.

1.10
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.

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

1.12
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

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.15
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.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods (food and drink sales)
3,666,980
3,411,649
2023
2022
£
£
Other revenue
Interest income
6,397
9,414
Grants received
-
6,000

All turnover arises in the United Kingdom.

The grant income above includes amounts of £nil (2022: - £6,000) received in relation to local Restriction Support Grants during the Coronavirus pandemic.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(6,000)
Fees payable to the company's auditor for the audit of the company's financial statements
13,000
12,500
Depreciation of owned tangible fixed assets
79,721
54,071
Profit on disposal of tangible fixed assets
(10,424)
-
Amortisation of intangible assets
(34,872)
(34,873)
5
Employees

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

2023
2022
Number
Number
Directors
6
5
Restaurant
79
73
Management & administration
1
2
Total
86
80
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,387,270
1,198,441
Social security costs
103,815
87,614
Pension costs
21,837
19,973
1,512,922
1,306,028
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
286,875
211,310
Company pension contributions to defined contribution schemes
5,640
4,592
292,515
215,902
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
100,000
68,810
Company pension contributions to defined contribution schemes
1,321
1,321
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
6,397
9,414
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
102,540
46,868
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
11,144
67,286
Adjustments in respect of prior periods
-
0
(62,822)
Total current tax
11,144
4,464
Deferred tax
Origination and reversal of timing differences
66,098
105,061
Total tax charge
77,242
109,525

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
283,309
375,652
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
70,827
71,374
Tax effect of expenses that are not deductible in determining taxable profit
9,860
12,811
Depreciation on assets not qualifying for tax allowances
(13,363)
(10,274)
Amortisation on assets not qualifying for tax allowances
(8,718)
(6,625)
Under/(over) provided in prior years
(47,462)
(62,822)
Deferred taxation at 25%
66,098
105,061
Taxation charge for the year
77,242
109,525
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Intangible fixed assets
Negative goodwill
£
Cost
At 1 January 2023 and 31 December 2023
(349,670)
Amortisation and impairment
At 1 January 2023
(314,514)
Amortisation charged for the year
(34,872)
At 31 December 2023
(349,386)
Carrying amount
At 31 December 2023
(284)
At 31 December 2022
(35,156)

The above arose when Kymel Trading Limited acquired the trade and net assets of the Trenchers business from the administrator of Vimac Group Limited and subsidiary companies, with this amount being in excess of the fair value of the non monetary assets acquired. Vimac Group Limited was owned by Mr PA Mackings immediately prior to entering into administration. The Trenchers business is the operation of a restaurant and take-away in Whitby on the Yorkshire coast.

11
Tangible fixed assets
Freehold property
Assets under construction
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2023
4,017,340
18,903
208,936
135,753
4,380,932
Additions
323,993
-
0
277,718
70,820
672,531
Disposals
-
0
-
0
-
0
(39,850)
(39,850)
Transfers
18,903
(18,903)
-
0
-
0
-
0
At 31 December 2023
4,360,236
-
0
486,654
166,723
5,013,613
Depreciation and impairment
At 1 January 2023
48,853
-
0
100,803
66,376
216,032
Depreciation charged in the year
15,926
-
0
39,032
24,763
79,721
Eliminated in respect of disposals
-
0
-
0
-
0
(32,274)
(32,274)
At 31 December 2023
64,779
-
0
139,835
58,865
263,479
Carrying amount
At 31 December 2023
4,295,457
-
0
346,819
107,858
4,750,134
At 31 December 2022
3,968,487
18,903
108,133
69,377
4,164,900

Freehold land and buildings with a carrying amount of £4,295,457 (2022 - £3,968,487) have been pledged to secure borrowings of the company.

KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 22 -

Land and buildings with a carrying amount of £3,635,440 were revalued by the directors in December 2019 based on a valuation provided at 20 March 2018 by Lambert Smith Hampton, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

 

In the opinion of the directors, the fair value of land and buildings at the balance sheet date is unchanged.

If land and buildings were measured using the cost model, the carrying amounts would have been £2,108,613 (2022 - £2,117,258), being cost £2,180,150 (2022 - £2,180,150) and depreciation £71,537 (2022 - £62,892).

12
Stocks
2023
2022
£
£
Raw materials and consumables
25,200
24,562
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
12,507
-
0
Unpaid share capital
1
1
Corporation tax recoverable
30,076
50,844
Other debtors
388,572
463,984
Prepayments and accrued income
12,878
9,846
444,034
524,675

Included within other debtors are amounts due from directors of £221,790 (2022: £318,973)

 

The amounts due from directors are unsecured and subject to interest at a rate of 2.25% with no fixed repayment date. However the amounts due were repaid shortly after the balance sheet date. There were no amounts due from or to any group companies by the directors.

14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
71,798
1,380,692
Trade creditors
77,019
42,286
Corporation tax
11,144
4,463
Other taxation and social security
137,364
152,829
Other creditors
203,223
159,436
Accruals and deferred income
137,790
88,470
638,338
1,828,176
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
1,659,138
-
0
16
Loans and overdrafts
2023
2022
£
£
Bank loans
1,730,936
1,380,692
Payable within one year
71,798
1,380,692
Payable after one year
1,659,138
-
0

The bank loans are secured by fixed charges and floating charges of the Company's freehold land and buildings.

 

The bank loan has a nominal interest rate of 1.9% above base rate. The loan is due to mature in December 2028 and attracts equal monthly instalments of £16,133 through to maturity with a lump sum repayment to pay the loan in full on the final repayment date.

17
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
81,953
15,855
Revaluations
399,373
399,373
481,326
415,228
2023
Movements in the year:
£
Liability at 1 January 2023
415,228
Charge to profit or loss
66,098
Liability at 31 December 2023
481,326
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
21,837
19,973

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.

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary shares of £1 each
1
1
1
1

On 4 October 2013 the company issued one ordinary share at par value of £1, the proceeds of which remain unpaid.

20
Financial commitments, guarantees and contingent liabilities

On 1 May 2019 Kymel Trading Limited signed as a guarantor on behalf of Spanish City (NE) Limited, a related party, in respect of their rental lease of a building. The commencement date of the lease was the 30 September 2018. The lease has a term of 10 years from the commencement date, with a break date of 31 March 2021 which directors did not exercise. The total lease payments due on the remaining lease amount to £318,500.

 

Other costs for dilapidations that would become the responsibility of Kymel Trading Limited, should Spanish City (NE) Limited default, cannot be estimated.

21
Related party transactions
Transactions with related parties

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

Mangement charges received
2023
2022
£
£
Spanish City (NE) Limited
36,000
180,000
Kymel Leisure Limited
25,000
60,000
Key management personnel
-
280
KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Related party transactions
(Continued)
- 25 -

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Paul Mackings Consulting Limited
54,500
71,322
Kymel Leisure Limited
17,873
72,000
Other related parties
43,850
1,689

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Spanish City (NE) Limited
41,137
45,522
Other related parties
39,411
-
Other information

As disclosed in note 20, the company acts as guarantor on behalf of Spanish City (NE) Limited in respect of their rental lease of a building.

All of the above are related parties due to being under the common control of P Mackings.

22
Directors' transactions

Advances or credits have been granted by the company to its directors as follows:

Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
P Mackings  - DLA
2.25
301,604
157,337
4,827
(301,604)
162,164
K Mackings - DLA
2.25
17,369
50,471
555
(17,844)
50,551
K G Weatherby - DLA
-
-
9,900
-
(825)
9,075
318,973
217,708
5,382
(320,273)
221,790
23
Ultimate controlling party

The company is a 100% subsidiary of Kymel Limited, which is the immediate parent company.

 

The ultimate parent company is Kymel Group Limited, the registered office of which is Kymel House, Boker Lane, Boldon, Tyne & Wear NE36 0RY.

 

The ultimate controlling party is PA Mackings due to his majority shareholding in Kymel Group Limited.

KYMEL TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
24
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
206,067
266,127
Adjustments for:
Taxation charged
77,242
109,525
Finance costs
102,540
46,868
Investment income
(6,397)
(9,414)
Gain on disposal of tangible fixed assets
(10,424)
-
Amortisation and impairment of intangible assets
(34,872)
(34,873)
Depreciation and impairment of tangible fixed assets
79,721
54,071
Movements in working capital:
(Increase)/decrease in stocks
(638)
9,608
(Increase)/decrease in debtors
(37,310)
165,915
Increase in creditors
112,375
42,935
Cash generated from operations
488,304
650,762
25
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
758,638
201,362
960,000
Borrowings excluding overdrafts
(1,380,692)
(350,244)
(1,730,936)
(622,054)
(148,882)
(770,936)
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