Registered number:
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
COMPANY INFORMATION
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CHEALE MEATS LIMITED
CONTENTS
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CHEALE MEATS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
The principal activity of the Company continued to be that of the wholesale of meat and meat products.
The directors extended the accounting period from 27 August 2023 to 31 December 2023 to coincide with the period end of the new parent company's accounting period. All amounts noted throughout these financial statements relate to the 16 month period to 31 December 2023. The comparative figures relate to the 12 month period to 27 August 2022.
Turnover has decreased by £7,022,287 (-15.6%) during the period from £45,077,537 in the year ended 27 August 2022 to £38,055,250 in the prior ended 31 December 2023.
Gross profit margins decreased from 39.6% in 2022 to 22.5% in 2023. Operating result decreased from 7.2% to -5.1% in 2022 and 2023 respectively. The above have been driven by the discontinuation of some of the activities during the period. The directors will seek to improve profitability going forward with improved revenue streams and ongoing focus on costs and efficiencies.
The Company is exposed to the risks that faces the meat industry, such risks which are generally outside of the control of the Company, include unforeseen changes in purchase and selling prices, poor harvests having an impact on feed price and disease to livestock. The Company has a trusted, long standing farming supply base which partly mitigates the risks associated with pig price fluctuations and raw material supply.
Contagious animal diseases and failing livestock numbers are a continuing risk for the Company. The Company manages these risks by adhering to strict bio-security procedures, maintaining the highest standards of animal welfare, ensuring consistent supplies to customers by use of imported product replacement and, by operating to the highest standards, the Company obtains premium prices for export production. Credit risk and price risk The Company sources its products from a number of suppliers and is exposed to changes in the market prices of its commodities. To mitigate increases in prices, the Company continues to source its products from a number of different suppliers and periodically reviews its agreements with suppliers to ensure these are on commercially favourable terms. The Company faces constant pressure from customers to reduce prices, highlighting the importance of commodity buying prices. This also places additional pressure on margins. To mitigate this risk, the Company continues to undertake perpetual cost review processes to make savings where possible. New credit customers are only accepted after they have been approved by the credit controller. Liquidity risk The Company is financed with appropriate long-term and short-term finance to match the needs of the business.
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CHEALE MEATS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
Key performance indicators used by the Company are as follows;
- Turnover; - Gross profit margin; and - Profit on ordinary activities before taxation. Details of the key performance indicators are shown in the Statement of Comprehensive Income. Cash flow is also closely monitored and measured.
The non-financial key performance indicator of the Company is whether the Company continues to pass food health & safety audits, which it continually does.
This report was approved by the board and signed on its behalf.
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CHEALE MEATS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the period ended 31 December 2023.
The loss for the period, after taxation, amounted to £1,574,707 (2022 - profit £2,549,340).
Equity of dividends were declared in the period of £7,514,344 (2022 - £6,000,000)
The directors who served during the period were:
Going concern The directors have reviewed the post period end trading position of the Company and its forecasts for the period to 31 December 2025 based on current trading expectations. Based on this review, together with the continued group financial support having been formally confirmed by the Company's parent entities and fellow subsidiaries for a period of not less than 12 months following the approval of the financial statements, the directors have concluded that the Company has adequate resources and funding available to it to continue to trade for the foreseeable future and in any case for a period of not less than 12 months from the date of approval of the financial statements. Accordingly, the Company continues to adopt the going concern basis in preparing the financial statements.
Going forward the directors aim to continue to grow the business whilst keeping tight control over costs.
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CHEALE MEATS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
There have been no significant events affecting the Company since the year end.
The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙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 to 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.
This report was approved by the board and signed on its behalf.
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CHEALE MEATS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED
We have audited the financial statements of Cheale Meats Limited (the 'Company') for the period ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 United Kingdom, including the Financial Reporting Council'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.
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.
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CHEALE MEATS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial period 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.
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.
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CHEALE MEATS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED (CONTINUED)
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, potential or suspected litigation, claims, non-compliance with applicable laws and regulations and fraud;
∙Enquiry of entity staff in finance and compliance functions to identify any instances of non-compliance with laws and regulations;
∙Performing audit work over the risk of management override, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙Reviewing for financial statements disclosures and assessing compliance with applicable laws and regulations;
∙Discussions amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud; and
∙Review of board minutes and legal expenses incurred during the year in order to identify potential contingent or actual liabilities and non-compliance with laws and regulations.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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CHEALE MEATS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED (CONTINUED)
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.
for and on behalf of MHA, Statutory Auditor
Leicester, United Kingdom Date: MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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CHEALE MEATS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
REGISTERED NUMBER: 01511942
BALANCE SHEET
AS AT 31 DECEMBER 2023
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CHEALE MEATS LIMITED
REGISTERED NUMBER: 01511942
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 31 form part of these financial statements.
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CHEALE MEATS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
Cheale Meats Limited is a private company, limited by shares, domiciled in England and Wales, registration number 01511942. The registered offices is Orchard Farm, Little Warley, Brentwood, Essex, CM13 3EN.
The principal activity of the Company during the period was that of the slaughter of animals and packaging of meats. Following a change in ownership the Company discontinued these operations and the principal activity became that of meat distributors and exporters.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The directors extended the accounting period from 27 August 2023 to 31 December 2023 to coincide with the period end of the new parent company's accounting period. All amounts noted throughout these financial statements relate to the 16 month period to 31 December 2023. The comparative figures relate to the 12 month period to 27 August 2022.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of CPC Foods Limited as at 31 December 2023 and these financial statements may be obtained from Oak House, Heyford Close, Aldermans Green, Coventry, West Midlands, CV2 2QB.
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The directors have reviewed the post period end trading position of the Company and its forecasts for the period to 31 December 2025 based on current trading expectations. Based on this review, together with the continued group financial support having been formally confirmed by the Company's parent entities and fellow subsidiaries for a period of not less than 12 months following the approval of the financial statements, the directors have concluded that the Company has adequate resources and funding available to it to continue to trade for the foreseeable future and in any case for a period of not less than 12 months from the date of approval of the financial statements. Accordingly, the Company continues to adopt the going concern basis in preparing the financial statements.
Functional and presentation currency
Transactions and balances
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line and reducing balance methods.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at transaction price, net of transaction costs, and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (i) Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. (ii) Impairment of assets The Company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. (iii) Accruals provisioning The Company provides for liabilities from customers in proportion to the risk they are exposed to on a percentage basis. (iv) Stocks provisioning The Company continues to slice and package pork and is exposed to changes in the market prices of pork commodities. As a result it is necessary to consider the recoverability of the cost of stocks and the associated provisioning required. When calculating the stocks provision, management considers the nature and condition of the stocks, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials.
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
11.Taxation (continued)
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
11.Taxation (continued)
From 1 April 2023, the corporation tax main rate increased to 25% for profits over £250,000. A small profits rate was also introduced for profits of £50,000 or less, charging corporation tax at 19%. Profits between £50,000 and £250,000 are taxed at the main rate reduced by marginal relief providing a gradual increase in the effective corporation tax rate. Deferred tax has been calculated at 25% accordingly.
BEPS / Pillar II Cheale Meats Limited is part of a group that operates in a number of jurisdictions. The effective tax rate for the financial year 2023 was 19.12% (2022 - 20.99%) as a result of the change in UK tax rate from 19% to 25% on 1 April 2023. For periods commencing on or after 1 January 2024, new tax legislation will apply to ensure the effective tax rate of the UK companies within the Group will be at least 15%, subject to various complex calculations. This is in line with the minimum taxation rules announced by the G7 and progressed by the OECD Inclusive Framework on Base Erosion and Profit Shifting. These rules have been implemented in the UK via the Domestic Top Up Tax legislation during the year. Historically, Cheale Meats Limited's effective tax rate has been above 15% and the Company has assessed its future exposure to Domestic Top Up Tax to be immaterial. In addition, the temporary exemption has been taken in relation to recognising any deferred tax assets or liabilities in relation to the OECD pillar two income taxes.
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amount to £1,609 (2022 - £Nil).
Contributions totalling £
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CHEALE MEATS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
22.Other financial commitments
At the balance sheet date the Company had entered into commitments to purchase sterling currency for the sum of £
Until 17 January 2023 the Company's ultimate controlling party was Cheale Group Limited. On 17 January 2023
On 8 June 2023 CPC Foods Limited purchased 100% of the issued share capital of the Company and from this date onwards became the Company's immediate parent company. At the 31 December 2023 CPC Foods Limited holds the controlling interest in the Company.
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