Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
COMPANY INFORMATION
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CPC FOODS LIMITED
CONTENTS
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CPC FOODS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The principal activity of the Company continued to be that of a holding company. The principal activity of the Group continued to be that of animal slaughter, meat processing and packaging.
The Group turnover in 2023 totalled £269.8m, which was an increase of £64.2m (31.2%) from 2022.
The Group recorded a loss after tax of £7.7m from a loss of £6.4m in 2022. Gross profit margins have decreased due to inflation on materials, energy, transport and labour costs. Riverway Foods Limited trade has continued following a fire in the prior year which destroyed areas of the manufacturing factory and plant & machinery. Cheale Meats Limited joined the Group during June 2023 and the results of this subsidiary are included in the financial statements from the point of acquisition. The Group continues to make investments in its factories and will seek to improve profitability with additional investment in the equipment used, improved revenue streams and ongoing focus on costs and efficiencies.
The Directors have assessed the principal risks and uncertainties as listed below.
Credit risk and price risk The Group sources it products from a number of suppliers and is exposed to changes in the market prices of its commodities. To mitigate increases in prices the Group 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 Group 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 Group continues to undertake perpetual cost review processes to make savings where possible. Additionally the Group provides for liabilities from customers in proportion to the risk they are exposed to on a percentage basis. New credit customers are only accepted after they have been approved by the credit controller. Liquidity risk The Group is financed with appropriate long-term and short-term finance to match the needs of the business.
Key performance indicators used by the Group are as follows;
- Turnover; - Gross profit margin; and - Profit on ordinary activities before taxation. Details of the key performance indicators are shown on the face of the Statement of Comprehensive Income. Other key performance indicators The non-financial key performance indicator of the Group, is the Group continuing to pass food health & safety audits which it continues to do so.
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CPC FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Section S172 (1) Statement
During the year, the Directors have had regard to the matters set out in S172 (1) (a) to (f) of the Companies Act 2006 whilst performing their duties. Whilst making decisions the directors ensure that they have acted in good faith, in a way they believe would promote the success of the Group for the benefit of its members as a whole. Specifically, the directors have considered the following:- a. The likely consequences of any decision in the long term; b. The interests of the Group's employees; c. The need to foster the Group's business relationships with suppliers, customers and others; d. The impact of the Group's operations on the community and the environment; e. The desirability of the Group maintaining a reputation for high standards of business conduct; and f. The need to act fairly between members of the Group. S172 (1) (a) The likely consequences of any decision in the long term The directors understand the business and the environment in which it operates. This is key to understanding the likely consequences of any long term decisions. There is a clear plan for growth which ensures they continue to sell quality products, satisfying customer and shareholder needs, amongst other stakeholders. Continually improving environmental performance and operating methods in line with key laws and regulations are integral and fundamental parts of the business strategy. This strategy is key to ensuring the Group is delivering on their duty of care for the benefit of future generations. S172 (1) (b) The interests of the Group's employees The directors recognise that the employees are key to the business and its success. What makes them different is their approach to relationships, which extends past the expected customer focus, to all their employees. Employee welfare and wellbeing is of upmost importance and they ensure all employees work in a safe and healthy environment and this is supported through regular external health and safety compliance checks. The directors regularly engage with employees through internal communication methods. When making decisions, the directors consider which course of action best delivers the Group strategy in the long term, taking into consideration all stakeholders of the Group, including the employees. S172 (1) (c) The need to foster the Group's business relationships with suppliers, customers and others The directors recognise that building relationships with suppliers and customers is also key to the success of the business. Their objective is to become a key partner, delivering quality products each time. This can only be achieved if they are also building relationships with their key suppliers. The directors recognise that working with suppliers and customers is also key to ensuring the impact to the environment is minimised. S172 (1) (d) The impact of the Group's operations on the community and the environment CPC Foods Limited recognise the importance of minimising the impact of their operations on the community and environment. S172 (1) (e) The desirability of the Group maintaining a reputation for high standards of business conduct The Group is committed to improving quality and reducing any environmental impact, as noted above. This ensures that their reputation within the local community is maintained.
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CPC FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
S172 (1) (f) The need to act fairly between members of the Group
When making decisions, the directors consider which course of action best delivers the Group strategy in the long term, taking into consideration all stakeholders of the Group.
This report was approved by the board and signed on its behalf.
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CPC FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The loss for the year, after taxation and minority interests, amounted to £7,820,488 (2022 - loss £6,727,923).
There were no dividends paid in the year under review (2022 - £Nil).
The directors who served during the year were:
Environmental matters CPC Foods Limited, Riverway Foods Holdings Limited and Cheale Meats Limited are exempt from the requirement to disclose SECR information. The below disclosures relate to Beckett's Foods Limited, Riverway Foods Limited and C & K Meats Limited. The Companies qualifying for SECR will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The Companies qualifying for SECR have complied with all applicable legislation and regulations. The Companies Act 2006 (Strategic Report and Directors' Report) Regulation 2018 requires companies qualifying for SECR reporting to disclose annual UK energy consumption and Greenhouse Gas emissions from SECR regulated sources. Energy and Greenhouse Gas emissions have been independently calculated by Net Zero Compliance, a division of Inspired Energy PLC. This report (including Scope 1, 2 and 3 consumption and CO2e emissions data) has been developed and calculated using the GHG protocol – A Corporate Accounting and Reporting Standard (World Resources Institute and World Business Council for Sustainable Development, 2004); Greenhouse Gas Protocol – Scope 2 Guidance (World Resources Institute, 2015); ISO 14064-1 and ISO 14064-2 (ISO, 2018; ISO, 2019); Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance (HM Government, 2019). Government Emissions Factor Database 2023 version 1.1 has been used, utilising the published kWh gross calorific value (CV) and kgCO2e emissions factors relevant for the reporting period 01/01/2023 – 31/12/2023. Estimations were undertaken to cover missing billing period for properties directly invoiced to the Companies qualifying for SECR. These were calculated on a kWh/day pro-rata basis at the meter level. Supplier specific emissions factors were applied to the kWh of electricity to calculate market-based emissions. Consumption (kWh) and Greenhouse Gas emissions (tCO2e) totals Scope 1 consumption and emissions relate to direct combustion of natural gas, and fuels utilised for transportation operations, such as company vehicle fleets. Scope 2 consumption and emissions relate to indirect emissions relating to the consumption of purchased electricity in day to day business operations. Scope 3 consumption and emissions relate to emissions resulting from sources not directly owned by the Companies qualifying for SECR. This relates to grey fleet (business travel undertaken in employee-owned vehicles) only.
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CPC FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The total consumption (kWh) figures for energy supplies reportable by Beckett's Foods Limited, Riverway Foods Limited and C & K Meats Limited are as follows:
The total emissions (tCO2e) figures for energy supplies reportable by Beckett's Foods Limited, Riverway Foods Limited and C & K Meats Limited are as follows: Intensity Metric Intensity metrics based on revenue and tonnes of production have been calculated, results of this analysis is as follows: tCO2e / £m - 16.01 (2022 - 13.93) tCO2e / tonne of production - 0.20 (2022 - 0.05) Energy Efficiency Improvements The Group are committed to year-on-year improvements in their operational energy efficiency. A register of energy efficiency measures has been compiled, with a view to implementing these measures in the next five years.
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CPC FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Measures ongoing and undertaken through FY 2023 and looking forwards: Beckett's Foods Limited - An ESG Taskforce was formed to drive the site's ESG agenda. The group meets every two weeks to track ongoing ESG projects and discuss opportunities to further the scope. Phase 1 of the LED lighting project was completed which is expected to reduce the electricity usage. A shut down procedure on equipment at Oak and Moat House has been introduced. This is monitored by line management and the ESG team and is expected to save energy as equipment will be turned off when not in use. Monitoring of equipment has been introduced to track electricity usage, allowing the Beckett's team to monitor where the most energy is being used so a more focused approach to reducing energy consumption can be taken. C & K Meats Limited - The detaining fridge was changed over to the ammonia glycol plant. This reduced energy demand from the Freon plant. There are plans to implement this for two further chillers in FY2024. This will mean that all the refrigeration will be on the ammonia glycol system, further improving energy efficiency. This also eliminates the refrigerant gas R404A from site. Riverway Foods Limited - A diesel jet wash used in cleaning protocols was replaced with an electric version, reducing diesel usage. Staff coach service ended from September 2023, from this date all staff were back at Riverway's site rather than being driven to the sister company, Direct Table Foods Limited, each day by coach. Finally, a project was started to replace all lighting with LEDs, which will reduce electricity consumption.
Going forward the directors aim to continue to grow the business whilst keeping a tight control over costs.
The directors have significant experience in the sector and have developed review procedures and control systems to effectively manage the exposure of the entity to price risk, credit risk, liquidity risk and cash flow risk. The Group's principal financial instruments comprise of bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the Group's operations and to finance the Group's operations. Due to the nature of the financial instruments used by the Group there is no exposure to price risk. The liquidity risk in respect of these is managed by way of a funding strategy set by the directors which includes setting operating limits to liquidity risk exposure. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
During the year, the policy of providing employees with information about the Group has been continued through internal media methods in which employees have also been encouraged to present their suggestions and views on the Group's performance. Regular meetings are held between local management and employees to allow a free flow of information and ideas.
The directors recognise that building relationships with suppliers and customers is also key to the success of the business. Their objective is to become a key partner, delivering quality products each time. This can only be achieved if they are also building relationships with their key suppliers. The directors recognise that working with suppliers and customers is also key to ensuring the impact to the environment is minimised.
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CPC FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Directors' insurance and indemnities The Directors have the benefit of the indemnity provisions contained in the Group’s Articles of Association (‘Articles’), and the Group has maintained throughout the year Directors’ and officers’ liability insurance for the benefit of the Group, the Directors and its officers. The Group has entered into qualifying third party indemnity arrangements for the benefit of all its Directors in a form and scope which comply with the requirements of the Companies Act 2006 and which were in force throughout the year and remain in force.
There have been no significant events affecting the Group since the year end.
Going Concern After reviewing the Group's forecasts and projections, the directors have a reasonable expectation that the Group has adequate resources and support to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial information. Financial support from the wider group has been obtained which confirms their intent to support CPC Foods Limited for a period of 12 months from the signing of the financial statements. The directors therefore believe the Group has the ability to continue as a going concern for the next 12 months.
Following a rebranding exercise on 15 May 2023 the trading name of the Company's independent auditor changed from MHA MacIntyre Hudson to MHA. The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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CPC FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group 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 the Group 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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CPC FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CPC FOODS LIMITED
We have audited the financial statements of CPC Foods Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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 Group's or the parent 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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CPC FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CPC FOODS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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 Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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CPC FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CPC FOODS 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 Auditors' 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 Group 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 tax and compliance functions and external advisors 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 the financial statements disclosures and testing these to supporting documentation to assess 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.
∙Reviewing minutes of meetings of those charged with governance.
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 Auditors' Report.
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CPC FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CPC FOODS 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 Auditors' 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.
Shelley Harvey FCCA (Senior Statutory Auditor) 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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CPC FOODS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
REGISTERED NUMBER: 07592875
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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CPC FOODS LIMITED
REGISTERED NUMBER: 07592875
CONSOLIDATED 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 24 to 49 form part of these financial statements.
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CPC FOODS LIMITED
REGISTERED NUMBER: 07592875
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
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CPC FOODS LIMITED
REGISTERED NUMBER: 07592875
COMPANY 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 24 to 49 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The entity is a private company, limited by shares, domiciled in England and Wales, registration number 07592875. The registered office is Oak House, Heyford Close, Aldermans Green, Coventry, West Midlands, CV2 2QB.
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
After reviewing the Group's forecasts and projections, the directors have a reasonable expectation that the Group has adequate resources and support to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial information. Financial support from the wider group has been obtained which confirms their intent to support CPC Foods Limited for a period of 12 months from the signing of the financial statements. The directors therefore believe the Group has the ability to continue as a going concern for the next 12 months.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Goodwill
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
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 Consolidated Statement of Comprehensive Income.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR 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 instrument 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 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 in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows 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 Consolidated 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 Group would receive for the asset if it were to be sold at the balance sheet date. 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.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans.
(i) Short term benefits Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received. (ii) Annual bonus plan
The Group operates a number of annual bonus plans for employees. An expense is recognised in the Consolidated Statement of Comprehensive Income when the Group has a legal or constructive obligation to make payments under the plans as a result of past events and a reliable estimate of the obligation can be made.
The Company has taken advantage of the following exemptions:
(i) from preparing a statement of cash flows, on the basis that it is a qualifying entity and the consolidated statement of cash flows, included in these financial statements, includes the Company’s cash flows; and
(ii) from the requirement to disclosure intra-group related party transactions, under FRS102 paragraph 33.7.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group 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) Impairment of intangible assets and goodwill The Group considers whether intangible assets and/or goodwill are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cash flows. (ii) 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. (iii) Stocks provisioning The Group 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. (iv) Impairment of assets The Group 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. (v) Accruals The Group provides for liabilities from customers in proportion to the risk they are exposed to on a percentage basis.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
From 1 April 2023, the corporation tax main rate increased to 25% for profits over £250,000. A small profits rate has also been 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 a marginal relief providing a gradual increase in the effective corporation tax rate.
BEPS 2.0 Pillar Two Legislation CPC Foods limited is part of a group which operates in a number of jurisdictions. The effective tax rate for the financial year 2023 was 0% (2022: 0%) as a result of losses made in the year. 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, the Group's effective rate has been below 15%, but the Group has assessed its exposure to Domestic Top Up Tax to be immaterial. In addition, the Group is taking advantage of the temporary deferred tax exemption within the "International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)" in relation to the current year and retrospectively in accordance with IAS 8. This means the Group does not recognise deferred tax assets and liabilities related to OECD pillar two income taxes and does not disclose information about them.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the parent Company for the year was £
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.Tangible fixed assets (continued)
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The bank loans and overdrafts are secured by a debenture dated 30 January 2023, which is a fixed charge over all of the assets of the Company.
Assets under hire purchase are secured against the assets to which they relate.
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
24.Deferred taxation (continued)
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
26.Business combinations (continued)
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CPC FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group is controlled by its immediate parent company,
Copies of the ultimate parent company's consolidated financial statements are available from In der Mark 2, 33378 Rheda-Wiedenbrück, Germany.
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