Company registration number 02441760 (England and Wales)
CONNECT CATERING LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2024
Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
CONNECT CATERING LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 4
Directors' report
5 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 11
Statement of comprehensive income
12
Balance sheet
13
Statement of changes in equity
14
Statement of cash flows
15
Notes to the financial statements
16 - 26
CONNECT CATERING LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr. J. R. Herring
Mrs. E. J. Herring
Mrs. S. L. Laver
Mrs. E. G. Mbaziira
Mrs. V. J. Murrell
Secretary
Mrs. E. J. Herring
Company number
02441760
Registered office
4-5 Hithercroft Court
Lupton Road
Wallingford
Oxfordshire
United Kingdom
OX10 9BT
Auditor
TC Group
Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
CONNECT CATERING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
The directors present their strategic report for the year ended 30 June 2024.
Principal activity
The principal activity of the company has continued to be that of contract catering since its formation in 1989.
Fair review of the business
Connect Catering is a family business, managed by two daughters of the founder and Chairman.
The widely publicised food price increases and catering staff shortages have been a challenge to all catering companies. Connect has worked hard to ensure these issues have not affected our customers and continue to deliver freshly prepared food every day. Connect has worked closely with suppliers to keep costs to a minimum and we have increased training for the Chefs. The company remains entirely family owned and independent, with no company loans and a healthy cashflow.
Connect remains focused on quality and sustainability. Continually monitoring and auditing the ISO certifications ensures that the company objectives are achieved. Connect’s effect on energy, the environment and health and safety are all closely monitored and managed with ISO’s in energy (50001) and environment (14001). Whilst ISO 9001 (Quality Management System) ensures all processes are audited internally and assessed by external assessors annually.
Future developments
Connect’s aim is to grow the company while maintaining its financial stability. Our policy is to concentrate on “Cost Plus” contracts. We have fifty-three contracts across many sectors including: business and industry, banking, conference centres, residential establishments, colleges, and independent schools. Operating in these different sectors gives the company a vibrant mix of ideas and a stable base.
Principal risks and uncertainties
Principal risks associated with the contract catering industry are treated seriously by the board, and include food safety, health and safety, allergens, labour shortages, inflation and food shortages. To ensure risk is mitigated there are many key features that Connect use including training which is closely monitored, strategy meetings and the ISO structure ensures the company's systems are audited and fit for purpose.
All contracts are scrutinised by senior managers before they are signed. We have a disaster plan associated with Head Office and computer backups are held remotely and securely.
Working closely with our suppliers, we ensure that the impact of food inflation is kept to a minimum and any food shortages and price rises are circulated to the Catering Managers, empowering them to create dishes with the ingredients available.
Staff shortages have been an issue within the whole of the hospitality sector since the pandemic. We have found recruitment difficult, but our reputation from being rated Excellent in The Sunday Times Best Companies to Work For and maintaining our Investor in People Gold accreditation has resulted in a very loyal workforce enabling us to continue to deliver our service reliably.
CONNECT CATERING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
Key performance indicators
The industry valuation for catering companies is based on EBITDA which the company uses to monitor its own performance.
The directors are satisfied with the performance of EBITDA when considering the investment the company has made in its administrative functions and the difficult trading conditions.
The budget is monitored every month at board meetings to check all the financial indicators. Client accounts are produced and scrutinised by managers at every level, exceptions are discussed at the monthly board meetings and any necessary solutions put into action.
Cash flow remains stable. The number of contracts and their contribution to gross profit is also monitored every month.
Connect are committed to reducing waste, pollution, and energy usage, by continual improvement, year on year.
By putting our employees and customers at the forefront of everything we do, treating our employees fairly, encouraging a diverse and inclusive culture, we are working together for a greener and more responsible future.
ENVIRONMENTAL
Energy: We are committed to reducing our energy use year on year, through our ISO 50001:2018 certification process.
Environment: We are committed to minimising the impact of our operations on the environment and promote responsible practices throughout the company, with a focus on Reduce, Re-use, Recycle. Our Environmental Policy is led by our ISO 14001:2015 certification process.
Carbon: With our commitment to Connect’s carbon management plan, we have set our business on the path to Net Zero carbon impact.
SOCIAL
People: We are committed to a safe, diverse, inclusive, and fair working environment for all our employees, offering equal pay and the opportunity to thrive, and develop their career through training. Our ISO 9001: 2015 and ISO 45001:2018 certification processes influence our Quality and Health & Safety Policies and systems throughout the business.
Community: Working in partnership with the community, we actively encourage our employees to volunteer, or donate, through our ‘Giving Something Back’ initiative, following the lead of the company ethos.
Suppliers: We create fair working partnerships with suppliers who have similar values and will help us to achieve our environmental goals.
CONNECT CATERING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -
GOVERNANCE
Compliance: We are committed to ensuring the security and protection of the personal information and data that we process, and to provide a compliant and consistent approach to all corporate and regulatory rules.
Ethics: Our commitment to ethical practices is evident in our sustainable practices. We respect our employees by valuing opinions and treating each employee as an equal, respect our customers by listening to feedback and assessing needs, and respect our suppliers, by paying on time and utilising fair buying practices.
Accounting: We have always operated a transparent ‘open book’ policy. Integrity, confidentiality, professional competence, and due care are our priority.
Mr. J. R. Herring
Mrs. V. J. Murrell
Director
Director
19 March 2025
19 March 2025
CONNECT CATERING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 5 -
The directors present their Directors' report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of contract catering since its formation in 1989.
Results and dividends
The results for the year are set out on page 12.
No ordinary dividends were paid. 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:
Mr. J. R. Herring
Mrs. E. J. Herring
Mrs. S. L. Laver
Mrs. K. F. Bendall
(Resigned 9 July 2024)
Mrs. E. G. Mbaziira
Mrs. V. J. Murrell
Disabled persons
The company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the company's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training, career development and promotion to disabled employees whenever appropriate.
Employee involvement
During the period, the policy of providing employees with information about the company has been continued through the internal media methods of a comprehensive monthly newsletter. Staff are encouraged to present their suggestions and views on the company, this has included every facet of the operation and performance of the company. Regular meetings are held by each Area and Operations manager for their teams, a senior manager will always be present. This facilitates the flow of information in all directions.
We also have two meetings each year for the whole company when the joint managing directors give a progress report of the company and news on where we are planning to go in the future.
Auditor
TC Group are deemed to be re-appointed 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.
CONNECT CATERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 6 -
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.
Financial risk management objectives and policies
The company has extensive controls in place to ensure that both income and costs are regularly reviewed and analysed against internal budgets.
As the majority of direct costs are recharged to customers there is minimal exposure to price risk, credit risk or liquidity risk. Most contracts involve a fixed management fee in relation to cover ongoing administration costs.
On behalf of the board
Mr. J. R. Herring
Mrs. V. J. Murrell
Director
Director
19 March 2025
CONNECT CATERING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 7 -
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;
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.
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.
CONNECT CATERING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CONNECT CATERING LIMITED
- 8 -
Opinion
We have audited the financial statements of Connect Catering Limited (the 'company') for the year ended 30 June 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 June 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.
CONNECT CATERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONNECT CATERING LIMITED
- 9 -
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.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. 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 to 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; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
CONNECT CATERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONNECT CATERING LIMITED
- 10 -
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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.
CONNECT CATERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CONNECT CATERING LIMITED
- 11 -
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.
Robert Keen FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
20 March 2025
Office: London
CONNECT CATERING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
2024
2023
Notes
£
£
Turnover
3
17,017,599
15,638,130
Cost of sales
(14,492,860)
(13,006,976)
Gross profit
2,524,739
2,631,154
Administrative expenses
(2,418,284)
(2,463,430)
Other operating income
44,000
21,600
Operating profit
5
150,455
189,324
Interest receivable and similar income
8
49,592
13,900
Profit before taxation
200,047
203,224
Tax on profit
9
(47,022)
(51,904)
Profit for the financial year
153,025
151,320
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
CONNECT CATERING LIMITED
BALANCE SHEET
- 13 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
249,302
262,866
Current assets
Stocks
12
1,101
1,101
Debtors
13
1,997,611
2,258,785
Cash at bank and in hand
1,160,986
749,059
3,159,698
3,008,945
Creditors: amounts falling due within one year
14
(2,448,017)
(2,463,026)
Net current assets
711,681
545,919
Total assets less current liabilities
960,983
808,785
Provisions for liabilities
Deferred tax liability
15
45,356
46,183
(45,356)
(46,183)
Net assets
915,627
762,602
Capital and reserves
Called up share capital
17
900
900
Capital redemption reserve
80,000
80,000
Profit and loss reserves
834,727
681,702
Total equity
915,627
762,602
The financial statements were approved by the board of directors and authorised for issue on 19 March 2025 and are signed on its behalf by:
Mr. J. R. Herring
Mrs. V. J. Murrell
Director
Director
Company registration number 02441760 (England and Wales)
CONNECT CATERING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 14 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 July 2022
900
80,000
530,382
611,282
Year ended 30 June 2023:
Profit and total comprehensive income
-
-
151,320
151,320
Balance at 30 June 2023
900
80,000
681,702
762,602
Year ended 30 June 2024:
Profit and total comprehensive income
-
-
153,025
153,025
Balance at 30 June 2024
900
80,000
834,727
915,627
CONNECT CATERING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
515,500
199,251
Income taxes paid
(43,043)
(59)
Net cash inflow from operating activities
472,457
199,192
Investing activities
Purchase of tangible fixed assets
(152,764)
(39,649)
Proceeds from disposal of tangible fixed assets
42,642
Interest received
49,592
13,900
Net cash used in investing activities
(60,530)
(25,749)
Net increase in cash and cash equivalents
411,927
173,443
Cash and cash equivalents at beginning of year
749,059
575,616
Cash and cash equivalents at end of year
1,160,986
749,059
CONNECT CATERING LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 16 -
1
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.
In the opinion of the directors there are no estimates or judgements which could have a material impact on the financial statements.
2
Accounting policies
Company information
Connect Catering Limited is a private company limited by shares incorporated in England and Wales. The registered office is 4-5 Hithercroft Court, Lupton Road, Wallingford, Oxfordshire, United Kingdom, OX10 9BT.
2.1
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 on the historical cost convention. The principal accounting policies adopted are set out below.
2.2
Going concern
As set out in the statement of directors' responsibilities statement on page 7, in preparing these financialtrue statements the directors are required to prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have prepared forecasts (including cash flows) for the next 12 months and considered the company's ability to meet its liabilities as they fall due, based upon the information available to the directors at the date of these financial statements.
On the basis of the above, the directors therefore have a reasonable expectation that the company has adequate resources to contend with the uncertainties that may arise, and to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing these financial statements.
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2
Accounting policies
(Continued)
- 17 -
2.3
Revenue recognition
Revenue is recognised in the period in which food and support services are provided in accordance with the terms of the contractual relationships with third parties. Revenue represents the fair value of the consideration received or receivable for food and support services provided in the normal course of business, excluding trade discounts, value added tax and similar sales taxes. A fixed monthly management fee is charged for each site in order to cover administrative costs, and this revenue is recognised in the month to which it relates.
Rebates and other amounts received from the suppliers include agreed discounts from suppliers' list prices, value and volume related rebates. Agreed discounts relating to inventories are credited to the income statement within cost of sales as the goods are consumed.
2.4
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:
Fixtures and fittings
20% straight line
Equipment
33% straight line
Motor vehicles
20% 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.
2.5
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
2.6
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, and deposits held at call with banks.
2.7
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.
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
2
Accounting policies
(Continued)
- 18 -
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.
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 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 receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
2.8
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.
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.
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
2
Accounting policies
(Continued)
- 19 -
2.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
2.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
2
Accounting policies
(Continued)
- 20 -
2.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
17,017,599
15,638,130
2024
2023
£
£
Other revenue
Interest income
49,592
13,900
4
Turnover
All turnover arose from the United Kingdom.
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
157,392
150,941
Profit on disposal of tangible fixed assets
(33,706)
-
Operating lease charges
56,056
56,056
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 21 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2024
2023
Number
Number
Number of production staff
303
306
Number of administrative staff
16
16
Number of management staff
12
12
331
334
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
7,718,428
7,163,648
Social security costs
699,964
636,516
Pension costs
216,350
194,213
8,634,742
7,994,377
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
452,585
424,377
Company pension contributions to defined contribution schemes
11,850
10,510
464,435
434,887
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
7
Directors' remuneration
(Continued)
- 22 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
121,367
103,875
Company pension contributions to defined contribution schemes
4,085
3,875
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
49,592
13,900
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
49,592
13,900
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
47,849
43,043
Deferred tax
Origination and reversal of timing differences
(827)
8,861
Total tax charge
47,022
51,904
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
9
Taxation
(Continued)
- 23 -
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
200,047
203,224
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
50,012
50,806
Tax effect of utilisation of tax losses not previously recognised
(17,966)
Effect of change in corporation tax rate
(9,145)
Permanent capital allowances in excess of depreciation
(1,333)
19,500
Deferred tax movement
(794)
8,853
Marginal relief
(863)
(144)
Taxation charge for the year
47,022
51,904
10
Intangible fixed assets
Goodwill
£
Cost
At 1 July 2023 and 30 June 2024
147,000
Amortisation and impairment
At 1 July 2023 and 30 June 2024
147,000
Carrying amount
At 30 June 2024
At 30 June 2023
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
11
Tangible fixed assets
Fixtures and fittings
Equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2023
120,159
587,725
355,459
1,063,343
Additions
7,127
9,746
135,891
152,764
Disposals
(97,971)
(97,971)
At 30 June 2024
127,286
597,471
393,379
1,118,136
Depreciation and impairment
At 1 July 2023
102,452
489,367
208,658
800,477
Depreciation charged in the year
5,126
78,436
73,830
157,392
Eliminated in respect of disposals
(89,035)
(89,035)
At 30 June 2024
107,578
567,803
193,453
868,834
Carrying amount
At 30 June 2024
19,708
29,668
199,926
249,302
At 30 June 2023
17,707
98,358
146,801
262,866
12
Stocks
2024
2023
£
£
Stocks of consumables
1,101
1,101
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,718,374
1,885,904
Other debtors
246,638
295,500
Prepayments and accrued income
32,599
77,381
1,997,611
2,258,785
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 25 -
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
974,453
1,010,867
Corporation tax
47,849
43,043
Other taxation and social security
391,976
459,015
Other creditors
573,145
604,292
Accruals and deferred income
460,594
345,809
2,448,017
2,463,026
15
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
45,356
46,183
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
216,350
194,213
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.
At the year end, the company had a liability of £38,084 (2023 - £67,827) in respect of pension contributions, payable to the pension scheme.
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
900
900
900
900
CONNECT CATERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 26 -
18
Related party transactions
Transactions with related parties
During the current year and previous period, the company was under the control of Mr and Mrs J. Herring by virtue of their majority shareholding.
During the year, the company paid rent to the shareholders totalling £56,056 (2023 - £56,056).
During the year, the company purchased goods from a connected company in the sum of £13,693 (2023 - £Nil).
At the year-end, the company owed £7,500 (2023 - £Nil) to this connected company.
The remuneration of key management personnel in the year was £672,016 (2023 - £524,512). This includes amounts disclosed in note 6.
19
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
153,025
151,320
Adjustments for:
Taxation charged
47,022
51,904
Investment income
(49,592)
(13,900)
Gain on disposal of tangible fixed assets
(33,706)
-
Depreciation and impairment of tangible fixed assets
157,392
150,941
Movements in working capital:
Decrease in stocks
1
851
Decrease in debtors
261,174
262,161
Decrease in creditors
(19,815)
(404,026)
Cash generated from operations
515,501
199,251
20
Analysis of changes in net funds
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
749,059
411,927
1,160,986
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