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Company Information
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Contents
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Directors' report
For the 16 month period ended 31 December 2023
The directors present their annual report and the financial statements of IRCA Manufacturing UK Limited ('the company') for the 16 month period ended 31 December 2023.
The profit for the 16 month period, after taxation, amounted to £1,170k.
The directors who served during the 16 month period were:
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Directors' report (continued)
For the 16 month period ended 31 December 2023
During 2023, the company defined, for the first time, a strategic sustainability plan, identifying the strategic areas of impacts and the medium-long term objectives, with Key Performance Indicators (KPIs) to be achieved by 2025 and 2028. Leveraging existing best practices and initiatives, this plan is built on three pillars:
∙Healthier Indulgence & Wellbeing Options - to provide alternative options to customers and consumers and address specific nutritional needs or lifestyles, with a focus on people's health and wellbeing;
∙People Company - places people at the centre of the strategy and training as a key factor for success, with initiatives aimed at fostering employee growth, promoting diversity and inclusion, and investing in communities; and
∙Smart, Sustainable Solutions - to invest in operational processes and reduce the environmental impact of activities, working on efficiency, innovation, and supply chain sustainability.
With these actions, the company intends to responsibly play its role within the ongoing process of global transformation, so that it can make the necessary contribution to the identification of useful solutions for the people who work in the company, for the communities in the territory where it operates and, more generally, for the well-being of our planet.
Additionally, in December 2023, the first sustainability report was published, serving as a tool to periodically report on sustainability objectives and performance and initiate constructive dialogue with all relevant stakeholders, aiming towards common goals.
The emissions values for the period ended 31 December 2023 are as follows:
∙Scope 1 emissions: Natural gas: 4,004 MWh
∙Scope 2 emissions: Electricity: 3,243 MWh
∙CO2e intensity: 0.08 (metric tonnes CO2e/metric tonnes of product produced)
∙Total percentage of renewable energy: 97%
Energy efficiency actions
In 2024, we will invest in making the prioritised changes that will bring the greatest improvements based on the analysis from our carbon footprint exercise. Some projects we have already undertaken include:
∙Moving to LED lighting;
∙Insulating piping in our plants;
∙Installing energy-efficient electrical motors in our equipment; and
∙purchasing 100% renewable electricity for our production plants.
Sustainable sourcing We work closely with our suppliers to meet our customers’ requirements for sustainable sourcing. Our approach is based on working with recognised NGOs, including the industry-leading certification programmes Rainforest Alliance, Fairtrade International and Roundtable for Sustainable Palm Oil (RSPO) and membership organisations such as the World Cocoa Foundation. Improving the sustainability of our packaging As a B2B company, our products are mainly packaged in bulk volumes, unlike individually wrapped consumer items. Based on a product/packaging ratio, our packaging is already very efficient. However, we recognise the need to keep reducing the impact of the packaging we use. We are testing lighter materials, removing unnecessary materials, and moving to recyclable or reusable materials.
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Directors' report (continued)
For the 16 month period ended 31 December 2023
The directors are responsible for preparing the Directors' report, the Strategic 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 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
There have been no significant events affecting the company since the year end.
This report was approved by the board and signed on its behalf.
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Strategic report
For the 16 month period ended 31 December 2023
The company was incorporated in the Kerry Group (a world leading provider of taste and nutrition solutions for the food, beverage and pharmaceutical markets) to house the Kerry UK "Sweet Ingredients Portfolio" in a separate legal entity.
On 27 March 2023, IRCA finalised the purchase of the “Sweet Ingredients Portfolio” from Kerry Group and the company changed its name from Kerry Sweet & Cereals Limited to IRCA UK Limited. On 10 January 2024 the company updated its name to IRCA Manufacturing UK Limited. Founded in 1919 and headquartered in the northern Italian town of Gallarate, IRCA is one of the world’s leading B2B providers of semi-finished ingredients for artisanal chocolate, pastry and bakery products, with a strong platform to capture growth opportunities in the market for artisanal gelato ingredients. The group design, manufacture, sell and distribute a wide range of high-quality ingredients, serving as a onestop shop for artisanal pastry chefs, bakers, gelato shops, large industrial producers of B2C products and other customers, covering everything needed to create finished products from base to decoration. Price trends of raw materials and transportation costs for 2023 The trends observed in 2023 were characterised by divergent movements in the prices of the main raw materials utilised by the company. Some markets experienced significant inflation (such as cocoa and sugar), bolstered by lower production compared to both European and global demand, while other commodities underwent deflationary dynamics following peaks in post-pandemic contexts. Although the average values of commodity indices, spot, and forward prices remained well above pre-2020 levels, 2023 marked a gradual return to values closer to historical averages. The Food and Agriculture Organization (“FAO”) Price Index, which monitors international prices of frequently traded food commodities, averaged 124.7 for the year 2023, down from the average of 144.7 in 2022, representing a decrease of 13.8%. The Ukrainian crisis effects were partially absorbed by the markets, notably with the FAO index for vegetable oils decreasing by 32.7%, cereals by 15.7%, and dairy products by 17.2%, dropping from the historical peak of 149.5 in 2022 to an average of 123.7 for 2023. The FAO sugar price index showed continuous growth until September 2023, followed by a gradual but steady decline. On an annual basis, the index increased from 114.5 points to 145, with peaks of 162.7 recorded in September 2023. In the European market, the average quotation for Region 3, including Italy, saw an average increase of 50% in 2023 compared to 2022, with peaks of 70% compared to the previous year. Spot markets in Italy also experienced increases of over 100% compared to the previous year. Cocoa futures on the London and New York exchanges began an upward trend from January to December 2023, marking a 70% increase year-on-year. Unfavourable weather conditions, cocoa plant diseases, and unattractive prices paid to farmers led to lower production, particularly in Côte d'Ivoire and Ghana, causing a supply-demand imbalance. The European grinding index reported by the European Cocoa Association (“ECA”) dropped by a modest 2% in Europe, with more pronounced declines recorded in the USA and Asia but offset by increasing processing in cocoa-producing countries. Energy cost indices witnessed a significant decline during 2023: the industrial producer price index for the energy sector measured by Istat dropped from 247.9 in December 2022 to 143.8 in December 2023, while future contract values traded on the Title Transfer Facility (“TTF”), the benchmark market for continental Europe, fell by approximately 55% from the beginning of 2023 to the end of the year. Regarding transportation, freight costs, particularly for container transport, experienced a progressive reduction during 2022 and 2023 after a significant increase in 2021 due to the health pandemic. This reduction was predominantly linked to a decrease in transport demand due to economic growth slowdown and inflationary trends, as well as a "natural" return to normal freight rates coinciding with the stabilisation of the health situation and the decongestion of some strategically important global ports. In 2024, an increase in maritime freight costs is expected, mainly due to increased demand, turmoil in the Middle East, and the security of maritime transport through the Red Sea.
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Strategic report (continued)
For the 16 month period ended 31 December 2023
The company’s objective is to maintain a balanced approach to managing its financial exposure by matching assets and liabilities and achieving operational flexibility through the use of liquidity generated by current operating activities.
The company’s ability to generate liquidity from operations together with its borrowing capacity enable it to satisfy its operational requirements to fund working capital, invest and meet its financial obligations. Treasury and financial risk management are centralised at group level. Specifically, group management is responsible for evaluating and approving forecast financial requirements, monitoring trends and taking corrective action as necessary. The following paragraphs provide qualitative and quantitative information relating to the company’s exposure to the aforementioned risks. Exchange rate risk The company operates at an international level and is therefore exposed to the exchange rate risk arising from the different currencies in which it operates. The main exchange rate to which the company is exposed is the GBP/Euro exchange rate. This risk is mitigated by entering into contracts with suppliers that provide for the fixing of purchase prices of raw materials over agreed periods. Credit risk Credit risk represents the company’s exposure to the risk of potential losses resulting from the nonfulfilment of obligations by counterparts. Trade receivables are recognised net of provisions, calculated on the basis of the risk of non-fulfilment of obligations by counterparts, in turn based on available information regarding the counterparty’s solvency and historical data. Provisions are made against individually significant receivables for which an objective risk of partial or total non-collection is identified. The provision for doubtful receivables at 31 December 2023 amounted to £33k. Liquidity risk The company's policy on liquidity risk is to ensure that sufficient cash is available to fund ongoing operations. The cash flow of the company is monitored to ensure it has adequate funds to meet future working capital requirements. Risk related to Russia-Ukraine and Israeli-Palestinian conflicts The company has not encountered any significant critical issues related to the ongoing Russia-Ukraine conflict in terms of procurement, production, and sales. As of 31 December 2023, the company’s primary suppliers and customers are situated outside of Russia and Ukraine. However, it cannot be discounted that the persistence of a military conflict situation in Ukraine and the escalating tensions between Russia and the countries where the company operates could potentially impact global macroeconomics conditions and the economies of those nations. This may lead to a potential decrease in demand and subsequent reduction in production levels. The company’s management continually monitors the evolving sanctions framework. Regarding the Israeli-Palestinian conflict, the risk that could impact the company is related to the increase in transportation/container costs.
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Strategic report (continued)
For the 16 month period ended 31 December 2023
Principal risks and uncertainties (continued)
Climate change Climate change and related regulatory responses may adversely impact the business. There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Changes in weather patterns and an increased frequency, intensity and duration of extreme weather conditions could, among other things, disrupt the operation of the supply chain, increase the product costs and impact the types of products that consumers purchase. For example, the supply of certain raw materials the company sources as part of the business (including cocoa and sugar, among others) is extremely vulnerable to changing weather conditions such as droughts, extreme rainfall, poor terrain conditions, parasites or other pests. Any of these factors, or a combination thereof, may result in lower volumes made available by the suppliers, and increased prices. As a result, the effects of climate change could have a long-term adverse impact on the business, financial condition, results of operations and prospects. In addition, in many of the countries in which we operate, governmental bodies are increasingly enacting legislation and regulations in response to the potential impacts of climate change. These laws and regulations, which may be mandatory, have the potential to impact the operations of the company directly or indirectly as a result of required compliance by us, as well as by the suppliers, wholesale partners and distributors. Finally, the company has taken voluntary steps to mitigate the impact on climate change. For example, the company has launched an initiative aiming to reduce the CO2 emissions, implemented an ESG scorecard and reporting procedure and are in the process of assessing key climate change risks affecting both the assets and supply chain.
The company delivered a strong performance in 2023 supported by organic growth and the impact of M&A activity. For the period ended 31 December 2023 the company generated revenue of £47.8m (£44.1m for the year ended 31 December 2023 on a pro rata basis) and achieved an operating profit of £2.3m (£2.1m for the year ended 31 December 2023 on a pro rata basis).
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Strategic report (continued)
For the 16 month period ended 31 December 2023
The directors consider, both individually and collectively, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006) in the decisions taken during the period ended 31 December 2023.
In discharging their duties in relation to s172(1) of the Companies Act 2006, the directors have paid regard to the following matters:
∙the likely consequences of any decision in the long-term, such as strategic planning and business development opportunities;
∙the interests of the company's employees including health and safety, employee involvement and initiatives, diversity, inclusion and gender pay gap issues;
∙the need to foster relationships with suppliers, customers and others;
∙the need to act fairly between members of the wider IRCA group;
∙the impact of the company's operations on the community and the environment; and
∙the desirability of the company maintaining a reputation for high standards of business conduct including adoption of corporate governance standards, training of directors and whistleblowing reporting.
As the company is a wholly owned subsidiary, the group's directors discharge their duties within policies, procedures and authorisation limits set out on a group-wide basis. The directors also achieve this through attendance at relevant executive meetings, involvement in executive briefings and training, and through having responsibility for implementation of group-wide initiatives to promote best practice.
This report was approved by the board and signed on its behalf.
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Independent auditor's report to the members of IRCA Manufacturing UK Limited
For the 16 month period ended 31 December 2023
We have audited the financial statements of IRCA Manufacturing UK Limited (the 'company') for the 16 month period ended 31 December 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Independent auditor's report to the members of IRCA Manufacturing UK Limited (continued)
For the 16 month period ended 31 December 2023
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 16 month period for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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.
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Independent auditor's report to the members of IRCA Manufacturing UK Limited (continued)
For the 16 month period ended 31 December 2023
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:
How the audit was considered capable of detecting irregularities including fraud Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the Senior Statutory Auditor ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations, including knowledge specific to auditing food processing companies;
∙we made enquiries of management as to where they considered there was susceptibility to fraud, and their knowledge of actual, suspected and alleged fraud;
∙we identified the laws and regulations that could reasonably be expected to have a material effect on the financial statements of the company through discussions with directors and other management at the planning stage, and
from our knowledge and experience of food processing companies;
∙the audit team held a discussion to identify any particular areas that were considered to be susceptible to misstatement, including with respect to fraud and non-compliance with laws and regulations; and
∙we focused our planned audit work on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company including the Companies Act 2006, Health and Safety Act 1974, employment legislation and taxation legislation.
We assessed the extent of compliance with the laws and regulations identified above through:
∙making enquiries of management; and
∙considering the internal controls in place that are designed to mitigate risks of fraud and non-compliance with laws
and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙determined the susceptibility of the company to management override of controls by checking the implementation of controls and enquiring of individuals involved in the financial reporting process;
∙reviewed journal entries during the period to identify unusual transactions;
∙performed analytical procedures to identify any large, unusual or unexpected transactions;
∙reviewed accounting estimates and evaluated where judgements or decisions made by management indicated bias on the part of the company’s management, including stock and other provisions;
∙tested the completeness of revenue by obtaining a full list of despatch notes applicable to the period;
∙obtained a sample of corresponding invoices and investigated any material variances to expectations; and
∙carried out substantive testing to check the occurrence and cut-off of expenditure.
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Independent auditor's report to the members of IRCA Manufacturing UK Limited (continued)
For the 16 month period ended 31 December 2023
Auditor's responsibilities for the audit of the financial statements (continued)
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included:
∙agreeing financial statement disclosures to underlying supporting documentation; and
∙enquiring of management as to actual and potential litigation and claims.
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.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
130 Wood Street
EC2V 6DL
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Statement of comprehensive income
For the 16 month period ended 31 December 2023
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Statement of financial position
As at
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Statement of financial position (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 16 to 31 form part of these financial statements.
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Statement of changes in equity
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
IRCA Manufacturing UK Limited is a private company limited by shares and is registered in England and Wales. Its company registration number is 14342969. The registered office is Airfield Industrial Estate, Pocklington, York, YO42 1NR. The principal activity of the company is the sale of biscuits, chocolate coatings and other sweet solutions.
2.Accounting policies
The preparation of financial statements in compliance with FRS 101 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 financial statements have been prepared for the 16 month period started 7 September 2022 and ended 31 December 2023. The company commenced trading on 1 December 2022.
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions under FRS 101:
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
∙the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirements of paragraph 58 of IFRS 16, provided that the disclosure of details in indebtedness relating to amounts payable after 5 years required by company law is presented separately for lease liabilities and other liabilities, and in total
∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraph 74A(b) of IAS 16
∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
∙the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
This information is included in the consolidated financial statements of AI Tiramisu (Luxembourg) Midco 4 Sarl as at 31 December 2023 and these financial statements may be obtained from IRCA Group HQ, Viale Danimarca, 30, 21013 Gallarate VA, Italy.
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Notes to the financial statements
For the 16 month period ended 31 December 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
The company has one operating segment, being the sale of biscuits, chocolate coatings and other sweet solutions. Revenue is measured at the fair value of the consideration received or receivable. Sales are recognised upon the date of delivery which is when the transfer of the risks and rewards associated with the goods takes place. Shipping and handling costs are included in selling and distribution costs. IFRS 15 “Revenue from Contracts with Customers” (effective for the year beginning 1 April 2018) provides a single, principles-based, five-step model to be applied to all sales contracts, based on the transfer of control of goods and services to customers. Revenue arises exclusively from the sale of biscuits, chocolate coatings and other sweet solutions. To determine whether to recognise revenue, the company follows a 5-step process: 1. Identifying the contract with a customer 2. Identifying the performance obligations 3. Determining the transaction price 4. Allocating the transaction price to the performance obligations 5. Recognising revenue when/as performance obligation(s) are satisfied.
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Notes to the financial statements
For the 16 month period ended 31 December 2023
2.Accounting policies (continued)
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Notes to the financial statements
For the 16 month period ended 31 December 2023
2.Accounting policies (continued)
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Notes to the financial statements
For the 16 month period ended 31 December 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
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 profit or loss.
At each reporting 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 profit or loss.
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Notes to the financial statements
For the 16 month period ended 31 December 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The company's accounting policies in respect of financial instruments transactions are explained below:
Financial assets and financial liabilities are initially measured at fair value. Financial assets All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets Impairment of financial assets The company always recognises lifetime expected credit losses for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime expected credit losses represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. Financial liabilities At amortised cost Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.
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Notes to the financial statements
For the 16 month period ended 31 December 2023
the reporting of results and the financial condition of the company. The directors consider that the above accounting policies address the critical areas of the company, which themselves require judgement in selecting the appropriate accounting policies. Stock valuation Finished goods and work in progress are valued using an estimated costing model for cost absorption. There is estimation uncertainty on the standard costing of the stock through yields and volumes produced. The directors assess at regular intervals whether a provision needs to be recognised in regards to impairment of stock. Dilapidations provision The provision for dilapidations represents the cost of making good on alterations made to the company's leasehold premises. There is inherent estimation uncertainty in predicting the future cost. The company has estimated the required provision through information retrieved during the wider group's acquisition of the company. The difference between the right of use asset and dilapidations provision has been recognised directly in equity.
The whole of revenue is attributable to the sale of biscuits, chocolate coatings and other sweet solutions.
Analysis of revenue by country of destination:
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Notes to the financial statements
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
10.Taxation (continued)
With effect from 1 April 2023 the rate of corporation tax increased, tapering from 19% for businesses with profits of less than £50,000 to 25% for businesses with profits over £250,000.
There are no other factors that may affect future tax charges.
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Notes to the financial statements
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
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Notes to the financial statements
For the 16 month period ended 31 December 2023
On incorporation the company issued 2 £1 ordinary shares at par.
On 23 March 2023, the company issued 1,000 £1 ordinary shares for total cash consideration of £9,000,000. On 27 March 2023, the company issued 1 £1 ordinary share for cash consideration of £128,250.
Called up share capital
Called up share capital represents the nominal value of the shares issued.
Share premium account
Profit and loss account
The company operates a defined contribution 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 group to the fund and amounted to £461k.
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Notes to the financial statements
For the 16 month period ended 31 December 2023
The company has taken advantage of the exemption in paragraph 17 and 18A of IAS 24 Related Party Disclosures and has not disclosed key management personnel compensation or transactions with wholly owed companies in the group.
The immediate parent company is AI Charlie UK Bidco Limited and the ultimate parent company is AI Tiramisu (Luxembourg) Midco 3 Sarl, a company registered in Luxembourg. The registered office of AI Tiramisu (Luxembourg) Midco 3 Sarl is rue 124 boulevard de la Petrusse.
The smallest group of undertakings, of which the company is a member, for which consolidated financial statements are prepared is that headed by AI Tiramisu (Luxembourg) Midco 3 Sarl and these financial statements may be obtained from rue 124 boulevard de la Petrusse. The directors do not believe that there is an ultimate controlling party.
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