Company registration number 03800145 (England and Wales)
INTERFOOD TECHNOLOGY LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
INTERFOOD TECHNOLOGY LTD.
COMPANY INFORMATION
Directors
J I Sydenham
R M Unwin
H Schoenmaker
D M Richardson
Secretary
D M Richardson
Company number
03800145
Registered office
30 Upper High Street
Thame
Oxfordshire
OX9 3EZ
Auditor
Richardsons
30 Upper High Street
Thame
Oxfordshire
OX9 3EZ
INTERFOOD TECHNOLOGY LTD.
CONTENTS
Page
Strategic report
6 - 7
Directors' report
2
Directors' responsibilities statement
1
Independent auditor's report
3 - 5
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
INTERFOOD TECHNOLOGY LTD.
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The 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.
INTERFOOD TECHNOLOGY LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their 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 distribution of industrial food manufacturing, processing and production machinery.
Branches
The company has one foreign branch based in Ireland.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £3,000,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J I Sydenham
R M Unwin
H Schoenmaker
D M Richardson
Auditor
The auditors, Richardsons, will be proposed for re-appointment at the forthcoming Annual 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.
On behalf of the board
D M Richardson
Director
30 January 2024
INTERFOOD TECHNOLOGY LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INTERFOOD TECHNOLOGY LTD.
- 3 -
Opinion
We have audited the financial statements of Interfood Technology Ltd. (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
INTERFOOD TECHNOLOGY LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INTERFOOD TECHNOLOGY LTD.
- 4 -
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 and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Enquiry of management and those charged with governance around actual and potential litigation and claims.
Enquiry of the company's staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
Reviewing minutes of meetings of those charged with governance.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
INTERFOOD TECHNOLOGY LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INTERFOOD TECHNOLOGY LTD.
- 5 -
John Holland
Senior Statutory Auditor
For and on behalf of Richardsons
30 January 2024
Chartered Accountants
Statutory Auditor
30 Upper High Street
Thame
Oxfordshire
OX9 3EZ
INTERFOOD TECHNOLOGY LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
Interfood Technology Limited (“the Company”) is a leading distributor of industrial food manufacturing and processing equipment in the UK and Ireland. The Company also provides a full range of complementary support services.
The food and drink industry is one of the largest manufacturing sectors in the UK and the Company serves customers across a broad range of food industry subsectors including meat, dairy, plant-based and bakery for human and pet consumption.
2023 has been a successful year for the Company with revenue and EBIT both up compared to 2022 and surpassing the budgets set for the year. The unusually high profit to revenue ratio this year was due to an exceptional one-off project.
Objectives and Strategy – Since its inception, the Company has focused on supplying value-driven solutions to its customers enabling them to deliver a high quality, safe and consistent product. The Company’s strategy remains to evaluate the requirements of the market and identify existing or innovative new solutions through existing suppliers or, if required, to deliver solutions through new opportunities and alliances. The Directors regularly review the Company’s product range and market position to keep it at the forefront of the industry.
Business Model - The Company puts service and sales at the forefront of its operations. Internal operations and financial controls are key to supporting the front-line team by providing weekly, monthly, and quarterly KPI reports and analytics to drive efficiency. The Directors work closely with the whole team, customers, suppliers, and stakeholders to manage and control the business and deliver key financial aims, objectives and strategy. The Company continues to benefit from a high degree of repeat business from many market-leading manufacturers in the food sector.
Principal risks and uncertainties
The Directors have identified, and regularly review, the principal risks that threaten the Company’s business model, future performance, solvency, and liquidity. These risks have been reviewed in line with the strategic aims of the Company. We have considered the threats created by them and continue to take reasonable steps to mitigate them.
Market risks – The Company is aware of its dependence upon key customers and the resulting exposure to the risk of a downturn in any of their larger customers’ activities, possibly because of the loss by that customer of a particular supply contract. This risk is often mitigated by the fact that the loss by one customer of a contract is a gain for another customer, who may consequently make a significant capital investment to improve capacity or increase productivity. The Directors consider that the current level of market risk is normal.
Loss of supply – Close and trusting relationships with existing OEM suppliers are critical to the Company’s success. The business focusses on maintaining strong supplier relationships and constantly reviews the market and alternative supply chains.
Supply chain delays – As expected, the delays in materials to manufacture equipment and parts prevalent in 2022 have improved significantly in 2023. Additional border inspections and associated documentation caused by Brexit are now a routine part of the Company’s operations. The introduction of the Windsor Framework in October 2023 improved the efficiency of Northern Irish imports/exports.
Cyber security – This risk is mitigated by the utilisation of physical and embedded security systems, regular back-ups and disaster recovery planning. User training remains a key method of mitigation.
Financial risks – Fraud risks are managed by robust systems and procedures. Credit risks are managed by monitoring limits and payment performance of customers. Foreign currency risk is managed by matching payments and receipts in foreign currency to minimise exposure. With no external debt, the Company’s liquidity risk is considered to be low. Cash flow forecasting is nevertheless maintained on a regular basis. Overheads are monitored by the finance team and regularly reported to managers and Directors.
INTERFOOD TECHNOLOGY LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
Outlook for 2024
The Company is in robust financial and operational health, with a strong pre-sales and project pipeline for 2024. We continue to seek complementary product lines and expand our market into areas in which we have not traditionally had a strong presence.
The Directors believe the Company is well placed to thrive and expand over the coming years.
Key performance indicators
Revenue increased by 12% to £39.5m (2022: £35.1m)
Profit before tax increased by 54% to £4.3m (2022: £2.8m)
Standard measures such as revenue, GP, PBT, EBIT and forward order book sales are used alongside working capital controls (aged inventory and aged accounts receivable). Customer-related performance measures (on-time delivery, distribution centre picking errors and returns) are measured and reviewed against targets on a regular basis.
D M Richardson
Director
30 January 2024
INTERFOOD TECHNOLOGY LTD.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
2
39,451,033
35,117,407
Cost of sales
(24,543,517)
(23,665,585)
Gross profit
14,907,516
11,451,822
Administrative expenses
(10,604,332)
(8,580,168)
Operating profit
5
4,303,184
2,871,654
Interest receivable and similar income
6
275
5,199
Interest payable and similar expenses
8
(39,309)
(24,325)
Profit before taxation
4,264,150
2,852,528
Tax on profit
9
(1,030,665)
(552,712)
Profit for the financial year
3,233,485
2,299,816
Retained earnings brought forward
6,634,007
6,834,191
Dividends
10
(3,000,000)
(2,500,000)
Retained earnings carried forward
6,867,492
6,634,007
The profit and loss account has been prepared on the basis that all operations are continuing operations.
INTERFOOD TECHNOLOGY LTD.
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
58,676
80,398
Tangible assets
12
993,975
998,828
Investments
13
200
200
1,052,851
1,079,426
Current assets
Stocks
15
6,273,224
5,681,023
Debtors - deferred tax
22
32,708
Debtors - other
16
9,629,101
8,931,114
Cash at bank and in hand
2,903,975
6,175,163
18,839,008
20,787,300
Creditors: amounts falling due within one year
18
(12,323,530)
(14,525,139)
Net current assets
6,515,478
6,262,161
Total assets less current liabilities
7,568,329
7,341,587
Creditors: amounts falling due after more than one year
19
(380,837)
(386,298)
Provisions for liabilities
Provisions
21
200,000
199,400
Deferred tax liability
22
1,882
(200,000)
(201,282)
Net assets
6,987,492
6,754,007
Capital and reserves
Called up share capital
24
120,000
120,000
Profit and loss reserves
6,867,492
6,634,007
Total equity
6,987,492
6,754,007
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 30 January 2024 and are signed on its behalf by:
D M Richardson
Director
Company registration number 03800145 (England and Wales)
INTERFOOD TECHNOLOGY LTD.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
1,508,438
4,550,497
Interest paid
(39,309)
(24,325)
Income taxes paid
(1,348,452)
(569,113)
Net cash inflow from operating activities
120,677
3,957,059
Investing activities
Purchase of tangible fixed assets
(458,132)
(579,641)
Proceeds from disposal of tangible fixed assets
65,302
88,199
Interest received
275
5,199
Net cash used in investing activities
(392,555)
(486,243)
Financing activities
Movement in finance leases obligations
690
(36,999)
Dividends paid
(3,000,000)
(2,500,000)
Net cash used in financing activities
(2,999,310)
(2,536,999)
Net (decrease)/increase in cash and cash equivalents
(3,271,188)
933,817
Cash and cash equivalents at beginning of year
6,175,163
5,241,346
Cash and cash equivalents at end of year
2,903,975
6,175,163
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Interfood Technology Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is 30 Upper High Street, Thame, Oxfordshire, OX9 3EZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.
The financial statements have been prepared under the historical cost convention.
The company has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts. On the basis all subsidiary companies are dormant.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
The company recognises revenues on the sale of products, net of discounts, sales incentives, customer bonuses, rebates granted and sales tax. The sale is recognised when products are delivered to the customer's premises, which is when title and risks and rewards of ownership pass to the customer.
Revenues from services provided and commissions received are recognised over the term of the
underlying contract.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
20% straight line basis
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.
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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
straight line basis over the remaining lease term
Plant and equipment
25% straight line basis
Computers
50% straight line basis
Motor vehicles
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
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
1.7
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.
1.8
Stocks
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
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.
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The company operates a defined contribution pension scheme covering the directors. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme. The assets of the scheme are held separately from those of the company in an independently administered fund.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.14
Foreign exchange
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.
All differences are taken to the profit and loss account.
1.15
Intercompany balances are repayable on demand.
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Goods
34,492,339
33,100,949
Services
3,213,701
1,910,400
Commissions
1,740,633
98,225
Other
4,360
7,833
39,451,033
35,117,407
2023
2022
£
£
Turnover analysed by geographical market
UK
34,799,512
30,189,031
Europe
4,651,521
4,928,376
39,451,033
35,117,407
2023
2022
£
£
Other revenue
Interest income
275
5,199
3
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
21,500
20,000
For other services
All other non-audit services
2,200
1,500
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
3
3
Engineers
31
31
Sales
17
15
Office staff
25
26
Total
76
75
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
6,432,766
5,202,948
Social security costs
842,828
714,204
Pension costs
464,384
263,101
7,739,978
6,180,253
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
81,151
(235,830)
Depreciation of owned tangible fixed assets
100,866
90,755
Depreciation of tangible fixed assets held under finance leases
362,117
344,454
Profit on disposal of tangible fixed assets
(65,300)
(26,393)
Amortisation of intangible assets
21,722
21,927
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
241
16
Other interest income
34
5,183
Total income
275
5,199
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
241
16
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,335,012
1,068,071
Company pension contributions to defined contribution schemes
58,846
14,305
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3)
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 17 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
597,915
446,770
Company pension contributions to defined contribution schemes
10,181
4,000
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
6,948
612
Other finance costs:
Interest on finance leases and hire purchase contracts
32,361
23,713
39,309
24,325
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,064,618
579,096
Adjustments in respect of prior periods
637
(9,983)
Total current tax
1,065,255
569,113
Deferred tax
Origination and reversal of timing differences
(34,590)
(16,401)
Total tax charge
1,030,665
552,712
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 18 -
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
4,264,150
2,852,528
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,002,951
541,980
Tax effect of expenses that are not deductible in determining taxable profit
23,439
14,368
Permanent capital allowances in excess of depreciation
38,228
22,748
Other non-reversing timing differences
(9,983)
Under/(over) provided in prior years
637
Deferred tax adjustments in respect of prior years
(34,590)
(16,401)
Taxation charge for the year
1,030,665
552,712
10
Dividends
2023
2022
£
£
Final paid
3,000,000
2,500,000
11
Intangible fixed assets
Software
£
Cost
At 1 January 2023 and 31 December 2023
109,634
Amortisation and impairment
At 1 January 2023
29,236
Amortisation charged for the year
21,722
At 31 December 2023
50,958
Carrying amount
At 31 December 2023
58,676
At 31 December 2022
80,398
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Tangible fixed assets
Leasehold improvements
Plant and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
68,780
379,642
172,495
1,939,570
2,560,487
Additions
52,751
10,657
10,032
384,692
458,132
Disposals
(257,689)
(147,993)
(288,952)
(694,634)
At 31 December 2023
121,531
132,610
34,534
2,035,310
2,323,985
Depreciation and impairment
At 1 January 2023
12,585
328,046
157,266
1,063,762
1,561,659
Depreciation charged in the year
18,766
24,726
15,288
404,203
462,983
Eliminated in respect of disposals
(257,688)
(147,992)
(288,952)
(694,632)
At 31 December 2023
31,351
95,084
24,562
1,179,013
1,330,010
Carrying amount
At 31 December 2023
90,180
37,526
9,972
856,297
993,975
At 31 December 2022
56,195
51,596
15,229
875,808
998,828
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
778,519
755,944
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
200
200
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Interfood Limited
30 Upper High Street, Thame, OX9 3EZ, England
Ordinary
100.00
Interfood Slicing Limited
30 Upper High Street, Thame, OX9 3EZ, England
Ordinary
100.00
Interfood Systems Limited
30 Upper High Street, Thame, OX9 3EZ, England
Ordinary
100.00
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
6,273,224
5,681,023
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,984,155
3,750,548
Other debtors
3,738,143
4,864,944
Prepayments and accrued income
906,803
315,622
9,629,101
8,931,114
Deferred tax asset (note 22)
32,708
9,661,809
8,931,114
17
Cash at bank
An intercompany guarantee exists as formal security over the bank accounts between Interfood Technology Limited, Interfood Systems Limited and Interfood Slicing Limited.
The bank holds a debenture over all the assets within the company.
18
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
20
281,933
275,782
Trade creditors
3,826,449
4,551,191
Taxation and social security
1,780,778
1,920,560
Other creditors
4,354,026
6,536,641
Accruals and deferred income
2,080,344
1,240,965
12,323,530
14,525,139
19
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
20
380,837
386,298
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
20
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
281,933
275,782
In two to five years
380,837
386,298
662,770
662,080
Finance lease obligations are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date.
21
Provisions for liabilities
2023
2022
£
£
Dilapidations
200,000
199,400
Movements on provisions:
Dilapidations
£
At 1 January 2023 and 31 December 2023
200,000
22
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
-
1,882
32,708
-
2023
Movements in the year:
£
Liability at 1 January 2023
1,882
Credit to profit or loss
(34,590)
Asset at 31 December 2023
(32,708)
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
464,384
263,101
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.
24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' of £1 each
62,400
62,400
62,400
62,400
Ordinary 'B' of £1 each
28,800
28,800
28,800
28,800
Ordinary 'C' of £1 each
28,800
28,800
28,800
28,800
120,000
120,000
120,000
120,000
25
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
274,435
243,731
Between two and five years
640,120
832,746
914,555
1,076,477
26
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
1,393,859
1,081,642
Transactions with related parties
During the year the company entered into the following transactions with related parties:
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
26
Related party transactions
(Continued)
- 23 -
Purchases
Purchases
2023
2022
£
£
Other related parties
2,021,701
1,585,153
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Other related parties
133,271
102,469
27
Controlling party
The results of Interfood Technology Limited are included in the group accounts prepared by Process-Pack International GmbH, a company incorporated in Germany. The address from which the accounts can be obtained is shown below:
Niedeckerstraße 1
65795 Hattersheim a. M.
Germany
28
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
6,175,163
(3,271,188)
2,903,975
Obligations under finance leases
(662,080)
(690)
(662,770)
5,513,083
(3,271,878)
2,241,205
INTERFOOD TECHNOLOGY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
29
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
3,233,485
2,299,816
Adjustments for:
Taxation charged
1,030,665
552,712
Finance costs
39,309
24,325
Investment income
(275)
(5,199)
Gain on disposal of tangible fixed assets
(65,300)
(26,393)
Amortisation and impairment of intangible assets
21,722
21,927
Depreciation and impairment of tangible fixed assets
462,983
435,209
Increase in provisions
600
-
Movements in working capital:
Increase in stocks
(592,201)
(870,856)
(Increase)/decrease in debtors
(697,987)
380,069
(Decrease)/increase in creditors
(1,924,563)
1,738,887
Cash generated from operations
1,508,438
4,550,497
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