Company registration number NI066681 (Northern Ireland)
LYNCH'S FOODSTORES LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
LYNCH'S FOODSTORES LTD
CONTENTS
Page
Company Information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
LYNCH'S FOODSTORES LTD
COMPANY INFORMATION
- 1 -
Directors
Mrs Anne Lynch
Mr Denis Lynch
Mr. Paul Lynch
Mr. Gary Lynch
Mr. Conor Lynch
Secretary
Mr Denis Lynch
Company number
NI066681
Registered office
21/23 Clarendon Street
Derry/Londonderry
BT48 7EP
Auditor
Moore (NI) LLP
21/23 Clarendon Street
Derry/Londonderry
BT48 7EP
Bankers
Danske Bank
1-2 Broadway
Ballymena
Co. Antrim
BT43 7PE
Solicitors
Carson McDowell LLP
Murray House
Murray Street
Belfast
BT1 6DN
LYNCH'S FOODSTORES LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
The directors present the strategic report for the year ended 30 April 2024.
Review of the business
The principal activity of the company is to carry on all or any of the businesses of supermarkets or storekeepers in all their branches. There was no significant change in these activities during the year.
Review of business and future developments
The company has achieved a profit after tax of £2,280,283 shown in the profit and loss account for the year ended 30 April 2024. The company has maintained these high profit levels through continued efforts by directors to monitor and minimise costs and optimise areas of savings. The directors are hopeful that the next year growth will continue across all six retail outlets. The Board of Directors are pleased with the outcome and results for year ended 30 April 2024 which in our opinion is a significant achievement.
Principal risks and uncertainties
The company's operations expose it to a variety of financial risks that include price risk, credit risk, liquidity risk, interest rate and cash flow risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring and controlling the effects of these risks. Given the size of the company, the director has assumed responsibility for the monitoring of financial risk
Financial risk management
The company's operations expose it to a variety of financial risks including cash flow risk and credit risks. The company has in place risk management procedures to monitor and control the effects of these risks
Credit risk
The company is exposed to credit risk due to its policy of giving credit to customers. However the company does not give significant amounts of credit. The company will monitor bad debt on an ongoing basis and the companies policies ensure that bad debt is kept to a a minimum.
Liquidity risk
The Directors monitor the cash levels of company to ensure that there are always adequate cash funds available to meet the day to day working capital requirements of the company.
Interest rate cash flow risk
The group has interest bearing liabilities. The group has a policy of monitoring its debt finance to ensure certainty of future cash flows.
Key performance indicators
In monitoring performance the directors and management have regard to a range of key performance indicators (KPI's), including the following;
LYNCH'S FOODSTORES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
Mr. Paul Lynch
Director
23 December 2024
LYNCH'S FOODSTORES LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 4 -
The directors present their annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company is to carry on all or any of the businesses of supermarkets and storekeepers in all their outlets.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £332,501. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs Anne Lynch
Mr Denis Lynch
Mr. Paul Lynch
Mr. Gary Lynch
Mr. Conor Lynch
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Auditor
The auditor, Moore (NI) LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
LYNCH'S FOODSTORES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 5 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr. Paul Lynch
Director
23 December 2024
LYNCH'S FOODSTORES LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LYNCH'S FOODSTORES LTD
- 6 -
Opinion
We have audited the financial statements of Lynch's Foodstores Ltd (the 'company') for the year ended 30 April 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
LYNCH'S FOODSTORES LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LYNCH'S FOODSTORES LTD (CONTINUED)
- 7 -
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Based on our understanding of the company and its operating environment, we determined that the most significant frameworks which have a direct impact on the preparation of the financial statements are those related to the reporting framework (FRS 102 and the Companies Act 2006) and the relevant employment law and tax compliance regulations. Our required procedures in this area are limited to inquiry of directors and other management, and inspection of any regulatory or legal correspondence. These limited procedures did not identify any actual or suspected non-compliance.
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, including evaluating management's incentives and opportunities to manage earnings or influence the reported results. From the results of our assessment, we determined that the principal risk of fraud related to posting inappropriate journal entries. In common with all audits under ISAs (UK), we are required to perform specific procedures to respond to the risk of management override.
LYNCH'S FOODSTORES LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LYNCH'S FOODSTORES LTD (CONTINUED)
- 8 -
Audit response to risks identified
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. Audit procedures performed by the engagement team included:
We obtained an understanding of the company's internal control systems in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company's internal control.
We obtained an understanding of how the company complies with relevant laws and regulations, including food safety requirements, by making enquiries of management and those charged with governance.
Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
Enquiry of entity staff to identify any instances of non-compliance with laws and regulations.
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud
Reviewing minutes of management and directors meetings
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
We test the completeness of sales to address the risk of fraud in revenue recognition.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions that are unusual or outside the normal course of business.
We communicated relevant laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment through collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
John Bradley
Senior Statutory Auditor
For and on behalf of Moore (NI) LLP
23 December 2024
Chartered Accountants
Statutory Auditor
21/23 Clarendon Street
Derry/Londonderry
BT48 7EP
LYNCH'S FOODSTORES LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
33,353,407
30,063,290
Cost of sales
(25,389,806)
(22,662,303)
Gross profit
7,963,601
7,400,987
Administrative expenses
(5,266,605)
(5,130,815)
Other operating income
195,599
193,205
Operating profit
4
2,892,595
2,463,377
Interest receivable and similar income
7
86,892
25,955
Interest payable and similar expenses
8
(866)
(2,708)
Profit before taxation
2,978,621
2,486,624
Tax on profit
9
(698,338)
(526,484)
Profit for the financial year
2,280,283
1,960,140
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LYNCH'S FOODSTORES LTD
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
92,012
115,012
Other intangible assets
11
12,750
29,750
Total intangible assets
104,762
144,762
Tangible assets
12
1,417,850
1,441,919
1,522,612
1,586,681
Current assets
Stocks
13
947,306
913,409
Debtors
14
2,882,986
2,321,079
Cash at bank and in hand
6,958,610
5,927,865
10,788,902
9,162,353
Creditors: amounts falling due within one year
15
(2,238,682)
(2,553,484)
Net current assets
8,550,220
6,608,869
Total assets less current liabilities
10,072,832
8,195,550
Creditors: amounts falling due after more than one year
16
(156,000)
(195,000)
Provisions for liabilities
Deferred tax liability
18
24,800
56,300
(24,800)
(56,300)
Net assets
9,892,032
7,944,250
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
9,891,932
7,944,150
Total equity
9,892,032
7,944,250
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 23 December 2024 and are signed on its behalf by:
Mr. Paul Lynch
Mr. Gary Lynch
Director
Director
Company registration number NI066681 (Northern Ireland)
LYNCH'S FOODSTORES LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2022
100
6,407,110
6,407,210
Year ended 30 April 2023:
Profit and total comprehensive income
-
1,960,140
1,960,140
Dividends
10
-
(423,100)
(423,100)
Balance at 30 April 2023
100
7,944,150
7,944,250
Year ended 30 April 2024:
Profit and total comprehensive income
-
2,280,283
2,280,283
Dividends
10
-
(332,501)
(332,501)
Balance at 30 April 2024
100
9,891,932
9,892,032
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
1
Accounting policies
Company information
Lynch's Foodstores Ltd is a private company limited by shares incorporated in Northern Ireland. The registered office is 21/23 Clarendon Street, Derry/Londonderry, BT48 7EP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Lynch's Foodstores (Holdings) Limited. These consolidated financial statements are available from Companies House website.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenues from supermarket sales is earned when the company sells a product to the customer and is recognised when the risks and rewards of ownership are transferred to the customer, provided that the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and costs incurred or to be incurred in respect of the sale can be measured reliably.
Revenues from the provision of services associated with the supermarket trade is recognised when a right to consideration is obtained from the performance of contractual obligations.
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Licences
20% straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
straight line over 50 years
Plant and machinery
25% straight line
Fixtures, fittings & equipment
20% straight line
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
32,356,435
29,281,670
Sale of services
890,982
97,666
Intershop sale of goods
105,990
683,954
33,353,407
30,063,290
2024
2023
£
£
Other revenue
Interest income
86,892
25,955
Commissions received
66,475
70,595
Rental income arising from investment properties
7,800
7,800
Sundry income
121,324
114,810
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
9,000
Depreciation of owned tangible fixed assets
219,646
273,283
Amortisation of intangible assets
40,000
40,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Shop employees
299
293
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,403,918
3,246,753
Pension costs
166,949
104,128
3,570,867
3,350,881
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
67,043
67,864
Company pension contributions to defined contribution schemes
120,000
60,000
187,043
127,864
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
86,892
25,955
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
866
2,708
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
729,838
470,184
Deferred tax
Origination and reversal of timing differences
(31,500)
(7,300)
Adjustment in respect of prior periods
63,600
Total deferred tax
(31,500)
56,300
Total tax charge
698,338
526,484
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
9
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
2,978,621
2,486,624
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.49%)
744,655
484,643
Effect of change in corporation tax rate
14,052
Group relief
(61,337)
(49,606)
Depreciation on assets not qualifying for tax allowances
7,117
7,569
Amortisation on assets not qualifying for tax allowances
7,875
6,139
Deferred tax adjustments in respect of prior years
63,600
Other tax adjustments
28
87
Taxation charge for the year
698,338
526,484
10
Dividends
2024
2023
£
£
Interim paid
332,501
423,100
11
Intangible fixed assets
Goodwill
Licences
Total
£
£
£
Cost
At 1 May 2023 and 30 April 2024
1,836,538
166,297
2,002,835
Amortisation and impairment
At 1 May 2023
1,721,526
136,547
1,858,073
Amortisation charged for the year
23,000
17,000
40,000
At 30 April 2024
1,744,526
153,547
1,898,073
Carrying amount
At 30 April 2024
92,012
12,750
104,762
At 30 April 2023
115,012
29,750
144,762
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 21 -
12
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 May 2023
1,334,380
948,783
1,187,311
55,985
3,526,459
Additions
21,993
10,767
162,817
195,577
At 30 April 2024
1,334,380
970,776
1,198,078
218,802
3,722,036
Depreciation and impairment
At 1 May 2023
184,969
846,562
1,035,425
17,584
2,084,540
Depreciation charged in the year
21,970
60,345
91,538
45,793
219,646
At 30 April 2024
206,939
906,907
1,126,963
63,377
2,304,186
Carrying amount
At 30 April 2024
1,127,441
63,869
71,115
155,425
1,417,850
At 30 April 2023
1,149,411
102,221
151,886
38,401
1,441,919
Freehold land and buildings with a carrying amount of £1,127,441 (2023 - £1,149,411) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
947,306
913,409
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
319,860
93,602
Amounts owed by group undertakings
2,519,440
2,185,348
Prepayments and accrued income
43,686
42,129
2,882,986
2,321,079
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
17
29,078
Other borrowings
17
385
385
Trade creditors
1,508,069
1,391,038
Amounts owed to group undertakings
24,204
558,124
Corporation tax
326,694
237,392
Other taxation and social security
190,832
161,670
Accruals and deferred income
188,498
175,797
2,238,682
2,553,484
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other borrowings
17
156,000
195,000
17
Loans and overdrafts
2024
2023
£
£
Bank loans
29,078
Other loans
156,385
195,385
156,385
224,463
Payable within one year
385
29,463
Payable after one year
156,000
195,000
The company's bank loans are secured by fixed and floating charges over property and undertakings of the company, directors' personal guarantees and intercompany guarantees.
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
24,800
56,300
LYNCH'S FOODSTORES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
18
Deferred taxation
(Continued)
- 23 -
2024
Movements in the year:
£
Liability at 1 May 2023
56,300
Credit to profit or loss
(31,500)
Liability at 30 April 2024
24,800
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
166,949
104,128
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
21
Events after the reporting date
There have been no significant events affecting the company since the reporting date.
22
Related party transactions
The company is a wholly owned subsidiary of Lynch's Foodstores (Holdings) Limited. As such, the company has taken advantage of the exemption available in Section 33 FRS 102 "Related party disclosures" whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
23
Ultimate controlling party
Lynch's Foodstores Ltd is a wholly owned subsidiary of Lynch's Foodstores (Holdings) Limited, a company incorporated in Northern Ireland.
The ultimate controlling parties are Mr. Conor Lynch, Mr. Gary Lynch and Mr. Paul Lynch, who equally own 100% of the issued share capital in Lynch's Foodstores (Holdings) Limited, the parent company of Lynch's Foodstores Ltd.
The financial statements of Lynch's Foodstores Ltd are consolidated into the group financial statements of Lynch's Foodstores (Holdings) Limited. Group financial statements can be obtained from the registered office of Lynch's Foodstores (Holdings) Limited which is 21-23 Clarendon Street, Derry, BT48 7EP.
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