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Registered number: 01511942










CHEALE MEATS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2023

 
CHEALE MEATS LIMITED
 
 
COMPANY INFORMATION


Directors
A G Clarke (appointed 8 June 2023)
J A Cornes (appointed 8 June 2023)
P Cheale (resigned 8 June 2023)
M Charlwood (resigned 8 June 2023)
A H J Cheale (resigned 8 June 2023)
M A Cheale (resigned 8 June 2023)
P Cheale (resigned 8 June 2023)




Company secretary
G Avrain



Registered number
01511942



Registered office
Orchard Farm, Little Warley
Brentwood


Essex


CM13 3EN




Independent auditor
MHA
Chartered Accountants & Statutory Auditor

11 Merus Court

Meridian Business Park


Leicester


LE19 1RJ





 
CHEALE MEATS LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditor's Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10 - 11
Statement of Changes in Equity
 
12
Notes to the Financial Statements
 
13 - 31

 
CHEALE MEATS LIMITED
 
 
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

Introduction
 
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.

Business review
 
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.

Principal risks and uncertainties
 
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.

Page 1

 
CHEALE MEATS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Financial key performance indicators
 
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.

Other key performance indicators
 
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.



................................................
A G Clarke
Director

Date: 24 September 2024
Page 2

 
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.

Principal activity

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.

Results and dividends

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)

Directors

The directors who served during the period were:

A G Clarke (appointed 8 June 2023)
J A Cornes (appointed 8 June 2023)
P Cheale (resigned 8 June 2023)
M Charlwood (resigned 8 June 2023)
A H J Cheale (resigned 8 June 2023)
M A Cheale (resigned 8 June 2023)
P Cheale (resigned 8 June 2023)

Political contributions

There were no political contributions made during the financial period. (2022 - £Nil).
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.

Future developments

Going forward the directors aim to continue to grow the business whilst keeping tight control over costs.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Page 3

 
CHEALE MEATS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Independent Auditor

The auditor, MHAwill 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).
 
Directors' responsibilities statement

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 2006They 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.
 





................................................
A G Clarke
Director

Date: 24 September 2024
Page 4

 
CHEALE MEATS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED
 

Opinion


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 policiesThe 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 loss for the period 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.


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.


Page 5

 
CHEALE MEATS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


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


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 directors' 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 set out on page 4, 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.


Page 6

 
CHEALE MEATS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED (CONTINUED)


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, 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.
Page 7

 
CHEALE MEATS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHEALE MEATS LIMITED (CONTINUED)


Use of our 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 2006Our 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.





Shelley Harvey FCCA (Senior Statutory Auditor)
  
for and on behalf of MHA, Statutory Auditor
Leicester, United Kingdom
Date:24/09/2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
MHA
 

Page 8

 
CHEALE MEATS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023

Continuing operations
Discontinued operations
Total
Continuing operations
Discontinued operations
Total
16 months ended
31 December
16 months ended
31 December
16 months ended
31 December
12 months ended
27 August
12 months ended
27 August
12 months ended
27 August
2023
2023
2023
2022
2022
2022
Note
£
£
£
£
£
£

  

Turnover
 4 
22,135,050
15,920,200
38,055,250
14,887,553
30,189,984
45,077,537

Cost of sales
  
(16,370,486)
(13,111,940)
(29,482,426)
(6,694,263)
(20,536,355)
(27,230,618)

Gross profit
  
5,764,564
2,808,260
8,572,824
8,193,290
9,653,629
17,846,919

Administrative expenses
  
(6,666,138)
(4,017,645)
(10,683,783)
(6,787,655)
(7,833,943)
(14,621,598)

Other operating income
 5 
-
154,469
154,469
-
-
-

Operating (loss)/profit
 6 
(901,574)
(1,054,916)
(1,956,490)
1,405,635
1,819,686
3,225,321

Interest receivable and similar income
 9 
9,797
-
9,797
2,012
424
2,436

Interest payable and similar expenses
 10 
-
-
-
-
(1,068)
(1,068)

(Loss)/profit before tax
  
(891,777)
(1,054,916)
(1,946,693)
1,407,647
1,819,042
3,226,689

Tax on (loss)/profit
 11 
170,406
201,580
371,986
(295,494)
(381,855)
(677,349)

(Loss)/profit for the financial period
  
(721,371)
(853,336)
(1,574,707)
1,112,153
1,437,187
2,549,340

There were no recognised gains and losses for 2023 or 2022 other than those included in the Statement of Comprehensive Income.

There was no other comprehensive income for 2023 (2022 - £NIL).

The notes on pages 13 to 31 form part of these financial statements.
Page 9

 
CHEALE MEATS LIMITED
REGISTERED NUMBER: 01511942

BALANCE SHEET
AS AT 31 DECEMBER 2023

31 December
27 August
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
-
-

Tangible assets
 14 
-
8,266,914

  
-
8,266,914

Current assets
  

Stocks
 15 
104,424
247,565

Debtors: amounts falling due within one year
 16 
1,855,221
4,593,315

Cash at bank and in hand
 17 
2,198,052
1,704,080

  
4,157,697
6,544,960

Current liabilities
  

Creditors: amounts falling due within one year
 18 
(1,072,238)
(2,487,468)

Net current assets
  
 
 
3,085,459
 
 
4,057,492

Total assets less current liabilities
  
3,085,459
12,324,406

Provisions for liabilities
  

Deferred tax
 19 
-
(149,896)

  
 
 
-
 
 
(149,896)

Net assets
  
3,085,459
12,174,510


Capital and reserves
  

Called up share capital 
 20 
51,040
51,040

Share premium account
  
503,813
503,813

Profit and loss account
  
2,530,606
11,619,657

  
3,085,459
12,174,510

Page 10

 
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: 




................................................
A G Clarke
Director

Date: 24 September 2024

The notes on pages 13 to 31 form part of these financial statements.
Page 11

 
CHEALE MEATS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 August 2021
51,040
503,813
15,070,317
15,625,170


Comprehensive income for the year

Profit for the year
-
-
2,549,340
2,549,340


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(6,000,000)
(6,000,000)



At 28 August 2022
51,040
503,813
11,619,657
12,174,510


Comprehensive income for the period

Loss for the period
-
-
(1,574,707)
(1,574,707)


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(7,514,344)
(7,514,344)


At 31 December 2023
51,040
503,813
2,530,606
3,085,459


The notes on pages 13 to 31 form part of these financial statements.

Share premium account
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of share are deducted from share premium.
Profit and loss account
Includes all current and prior year retained profits and losses. All amounts are distributable.
Page 12

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

1.


General information

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

 
2.1

Basis of preparation of financial statements

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:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

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.

Page 13

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

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.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'other operating income'.

Page 14

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.6

Interest income

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 15

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.9

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.10

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

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.

Page 16

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Freehold property
-
2% - 10% straight line
Plant and machinery
-
10% - 33.33% straight line and 15% - 25% reducing balance

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.

 
2.12

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at transaction price, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Page 17

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at transaction price, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to the Statement of Comprehensive Income.

 
2.17

Financial instruments

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.

 
Page 18

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.17
Financial instruments (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.

 
2.18

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
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.

Page 19

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


16 months ended
31 December
As restated
12 months ended
27 August
2023
2022
£
£

Slaughter of animals and packing of meat
15,920,200
30,189,984

Meat sales
22,135,050
14,887,553

38,055,250
45,077,537


Analysis of turnover by country of destination:

16 months ended
31 December
12 months ended
27 August
2023
2022
£
£

United Kingdom
29,409,554
30,991,455

Rest of Europe
8,645,696
14,086,082

38,055,250
45,077,537


There prior year turnover by class of business has been restated from entirely arising from one revenue stream.


5.


Other operating income

16 months ended
31 December
12 months ended
27 August
2023
2022
£
£

Other operating income
108,658
-

Net rents receivable
45,811
-

154,469
-


Page 20

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

6.


Operating (loss)/profit

The operating (loss)/profit is stated after charging/(crediting):

16 months ended
31 December
12 months ended
27 August
2023
2022
£
£

Depreciation of tangible fixed assets
648,945
409,102

Impairment of tangible fixed assets
-
276,814

Profit on sale of tangible assets
(36,652)
-

Foreign exchange loss
12,557
-


7.


Auditor's remuneration

During the period, the Company obtained the following services from the Company's auditor:


16 months ended
31 December
12 months ended
27 August
2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
21,000
25,250

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 21

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

8.


Employees

Staff costs were as follows:


16 months ended
31 December
12 months ended
27 August
2023
2022
£
£

Wages and salaries
144,357
-

Social security costs
10,728
-

Cost of defined contribution scheme
2,028
-

157,113
-


During the period there were no employees other than directors who received £Nil remuneration.

The average monthly number of employees, including the directors, during the period was as follows:


  16 months ended
     31 December
   12 months ended
       27 August
        2023
        2022
            No.
            No.







Employees
2
-



Directors
4
5

6
5


9.


Interest receivable

16 months ended
31 December
12 months ended
27 August
2023
2022
£
£


Other interest receivable
9,797
2,436

9,797
2,436

Page 22

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

10.


Interest payable and similar expenses

16 months ended
31 December
12 months ended
27 August
2023
2022
£
£


Other interest payable
-
1,068

-
1,068


11.


Taxation


16 months ended
31 December
12 months ended
27 August
2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
697,955

Adjustments in respect of previous periods
-
(427)


Total current tax
-
697,528

Deferred tax


Origination and reversal of timing differences
(371,986)
(20,179)

Total deferred tax
(371,986)
(20,179)


Tax on (loss)/profit
(371,986)
677,349
Page 23

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the period/year

The tax assessed for the period/year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 22.4% (2022 - 19%). The differences are explained below:

16 months ended
31 December
12 months ended
27 August
2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(1,946,693)
3,226,689


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 22.4% (2022 - 19%)
(436,059)
613,071

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
-
29,434

Capital allowances for period/year in excess of depreciation
(218,097)
-

Adjustments to tax charge in respect of prior periods
(16,042)
(427)

Difference due to change in tax rate
-
35,975

Unrelieved tax losses carried forward
298,212
-

Group relief
-
(704)

Total tax charge for the period/year
(371,986)
677,349
Page 24

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors that may affect future tax charges

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.


12.


Dividends

31 December
27 August
2023
2022
£
£


Equity dividends paid
7,514,344
6,000,000

7,514,344
6,000,000

Page 25

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

13.


Intangible assets






Goodwill

£





At 28 August 2022
25,000


Disposals
(25,000)



At 31 December 2023

-





At 28 August 2022
25,000


On disposals
(25,000)



At 31 December 2023

-



Net book value



At 31 December 2023
-



At 27 August 2022
-



Page 26

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

14.


Tangible fixed assets







Freehold property
Plant and machinery
Total

£
£
£



Cost or valuation


At 28 August 2022
9,078,428
8,847,908
17,926,336


Additions
-
500,253
500,253


Disposals
(9,078,428)
(9,100,472)
(18,178,900)



At 31 December 2023

-
247,689
247,689



Depreciation


At 28 August 2022
2,060,612
7,598,810
9,659,422


Charge for the period
65,726
583,219
648,945


Disposals
(2,126,338)
(7,934,340)
(10,060,678)



At 31 December 2023

-
247,689
247,689



Net book value



At 31 December 2023
-
-
-



At 27 August 2022
7,017,816
1,249,098
8,266,914


15.


Stocks

31 December
27 August
2023
2022
£
£

Raw materials and consumables
-
84,289

Finished goods and goods for resale
104,424
163,276

104,424
247,565


Page 27

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

16.


Debtors

31 December
27 August
2023
2022
£
£


Trade debtors
15,509
4,041,763

Amounts owed by group undertakings
1,440,187
-

Other debtors
99,513
331,540

Prepayments and accrued income
-
220,012

Deferred taxation
300,012
-

1,855,221
4,593,315


Trade debtors are stated after impairment of £9,079 (2022 - £8,047).
Amounts owed within one year by group undertakings are non-interest bearing and are repayable on demand.


17.


Cash and cash equivalents

31 December
27 August
2023
2022
£
£

Cash at bank and in hand
2,198,052
1,704,080

2,198,052
1,704,080


Page 28

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

18.


Creditors: Amounts falling due within one year

31 December
27 August
2023
2022
£
£

Trade creditors
362,608
1,579,116

Amounts owed to group undertakings
10,627
126,006

Corporation tax
-
285,217

Other taxation and social security
97,312
-

Other creditors
82,036
3,068

Accruals and deferred income
519,655
494,061

1,072,238
2,487,468


Amounts owed within one year to group undertakings are non-interest bearing and are repayable on demand.
Barclays Bank PLC held a fixed and floating charge over all property and undertakings of the Company. This charge was satisfied on 4 December 2023.
Barclays Bank PLC held a fixed charge over all property and undertakings of the Company. This charge was satisfied on 24 May 2024.
HSBC UK Bank PLC hold a fixed and floating charge over all assets of the Company.

Page 29

 
CHEALE MEATS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

19.


Deferred taxation






2023


£






At beginning of year
(149,896)


Charged to profit or loss
449,908



At end of year
300,012

The deferred taxation balance is made up as follows:

31 December
27 August
2023
2022
£
£


Accelerated capital allowances
-
(149,896)

Tax losses carried forward
300,012
-

300,012
(149,896)


20.


Share capital

31 December
27 August
2023
2022
£
£
Allotted, called up and fully paid



51,040 (2022 - 51,040) Ordinary shares of £1.00 each
51,040
51,040

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.



21.


Pension commitments

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 £2,028 (2022 - £Nil) were payable to the fund at the reporting date and are included in creditors.

Page 30

 
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 £1,425,055 (2022 - £1,593,394) for consideration of €1,645,000 (2022 - €1,880,720).


23.


Related party transactions

The Company has taken advantage of the exemption available under FRS102 33.1A not to disclose transactions with wholly owned subsidiaries of the Group.
Transactions and balances with related parties are as follows:


31 December
27 August
2023
2022
£
£

Sales made to other related parties
15,051
27,802
Purchases made to other related parties
45,045
21,100
Salary recharges from other related parties
875,763
2,153,380
Dividends issued to other related parties
7,514,344
6,000,000


24.


Controlling party

Until 17 January 2023 the Company's ultimate controlling party was Cheale Group Limited. On 17 January 2023 Cheale Holdings Limited became the ultimate controlling party following a group reorganisation.
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.
CPC Foods Limited is controlled by Tonnies Holding GmbH & Co kg, a company incorporated in Germany.
CPC Foods Limited produces consolidated accounts which are publicly available at Oak House, Heyford Close, Aldermans Green, Coventry, West Midlands, CV2 2QB.

 
Page 31