Company registration number 00566338 (England and Wales)
PASTA FOODS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
PASTA FOODS LIMITED
COMPANY INFORMATION
Directors
Mr S Webber
Mr A Gunton
Mr G Chetwood
Company number
00566338
Registered office
Pasta Foods Limited
Forest Way
New Costessey
Norwich
NR5 0JH
Auditor
Ensors Accountants LLP
3 St James Court
Whitefriars
Norwich
NR3 1RJ
PASTA FOODS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
PASTA FOODS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 1 -
The directors present the strategic report for the year ended 31 October 2024.
Review of the business
Pasta Foods is a vertically integrated pasta manufacturer. The company buys high quality durum wheat which it mills at its own mill and then makes pasta from the semolina. The pasta is sold to a wide variety of customers which make pasta salads, recipe dishes, canned goods, snack pots and to a number of food service distributors and a small number of retail brands. It also sells semolina as an ingredient along with other added value products from the mill.
It has been a difficult year for our UK customer base, as the UK endured long periods of wet weather with a very un- summer like season and consumption of pasta salads was down significantly. That has had a profound impact on our business, along with general weakness in demand in the UK.
Despite poor UK sales, our export business, both direct and indirect, has been more robust with direct export volumes continuing to grow in a highly competitive market.
Sales to retail are in double-digit growth with foodservice being even more significant. Our added value products from the mill continue to grow, albeit at a lower rate.
Pasta Foods has continued to deliver 100% of all customer needs on time, in full. We are winning new business as our quality service and product is appreciated by a wider group of customers. We support a number of charities with donations of pasta in difficult times for many.
Sales of £29.9m whilst down on the record pasta sales of the previous year is well up on earlier years with a creditable Operating Profit of £2.4m.
Given the huge investment made over the last 10 or so years, it is key that we focus on our Return on Invested Capital (ROIC). This year it stands at 8.6%. We need to strive to improve returns on investment in the coming year.
A continuing theme is that we work closely with our customers, both existing and new, to meet their needs. We have also worked successfully to increase the range of suppliers of durum wheat, as our purchased volumes increase over the longer term and as a natural hedge in our buying portfolio.
The business, like all UK businesses, confronts the challenges posed by inflationary pressures including upcoming increases in employers’ NI, minimum wage increases above inflation, interest rates higher for longer and the threats of no/slow economic growth.
Debt is specifically allocated to companies within the group, with the exception of £8.7m that Pasta Foods is holding on behalf of group companies.
Capex in the year was £299k following the significant investment in previous years.
Principal risks and uncertainties
The principal risks faced by the company are focused on raw material price movements, energy cost volatility and exchange rate fluctuations.
The business seeks to pass on underlying raw material price increases to customers as appropriate.
The business protects itself with long term agreements and insurance policies where possible.
PASTA FOODS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 2 -
Key performance indicators
The business operates using a range of KPIs which are cascaded through the business.
The business reviews health and safety metrics at Board level and acts accordingly upon that information.
HR metrics regarding employee performance and wellbeing are measured and reviewed.
The business focuses on various financial KPIs including operating profit, ROIC, EBITDAE, net assets and cash.
The non-financial KPIs that are reviewed involve production volumes, waste volumes and manufacturing metrics.
Sales volumes are measured against manufacturing volumes. In turn, KPIs regarding customer service levels and efficiency are monitored very closely.
Mr S Webber
Director
25 February 2025
PASTA FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 October 2024.
Principal activities
The principal activity of the company continued to be that of wheat milling and the production of dry pasta.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid (2023: £nil). The directors do not recommend payment of a final dividend.
Profit for the year amounted to £930,116 (2023: £3,930,780).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Webber
Mr A Gunton
Mr G Chetwood
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
The company's financial risk management objective is broadly to seek to make neither profit nor loss from exposure to currency or interest rate risks. Its policy is to finance working capital through retained earnings and where necessary through borrowings with third party banks.
The company's exposure to the price risk of financial instruments is therefore minimal. As the counter party to all financial instruments is its bankers, it is also exposed to minimal credit and liquidity risks in respect of these instruments. Its cash flow risk in respect of forward currency purchases is also minimal as it aims to pay suppliers in accordance with their stated terms, matching the maturity of currency purchases.
The directors do not consider any other risks attaching to the use of financial instruments to be material to an assessment of its financial position or profit.
At the Statement of Financial Position date, the company was not entered into forward foreign exchange contracts. The company does not use hedge accounting.
Research and development
The development and technical function is focused not only on improving efficiency and quality by use of technology, but also by further development of pasta products offering a point of difference or meeting changed market needs. Resource is allocated to achieve this aim.
Future developments
We continue to monitor opportunities to invest in the business to support our customers who value our approach to service and quality.
Auditor
Ensors Accountants LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
PASTA FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 4 -
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 S Webber
Director
25 February 2025
PASTA FOODS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 5 -
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; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
PASTA FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PASTA FOODS LIMITED
- 6 -
Opinion
We have audited the financial statements of Pasta Foods Limited (the 'company') for the year ended 31 October 2024 which comprise the statement of comprehensive income, the statement of financial position, 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 31 October 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.
PASTA FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PASTA FOODS LIMITED (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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Enquiring of those charged with governance and management, including obtaining and reviewing supporting documentation, concerning the company's internal policies and procedures relating to:
Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
The internal controls established to mitigate the risks related to fraud or non-compliance with laws and regulations.
Obtaining an understanding, as gathered from accumulated knowledge of the company and the industry, of the legal and regulatory (including reporting framework) environment that the company operates in, focusing on those laws and regulations that could reasonably be expected to have a direct effect on the financial statements or a fundamental effect on the operations of the company. For Pasta Foods Limited, we consider these to include Companies Act 2006, UK GAAP, Employment Law, Data Protection, Health and Safety Regulations, Food Hygiene Standards and standard UK tax legislation.
PASTA FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PASTA FOODS LIMITED (CONTINUED)
- 8 -
Where available and provided, reviewing all correspondence with regulatory authorities.
Undertaking analytical procedures to identify any unusual or unexpected relationships that may indicate risks or material misstatement due to fraud.
In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Additionally, we reviewed the revenue recognition policy and ensured the adopted policy was in line with UK GAAP requirements, we tested the application of this policy throughout our substantive audit procedures over revenue.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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 by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed 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 are to become aware of it.
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.
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.
Barry Gostling (Senior Statutory Auditor)
For and on behalf of Ensors Accountants LLP, Statutory Auditor
Chartered Accountants
3 St James Court
Whitefriars
Norwich
NR3 1RJ
5 March 2025
PASTA FOODS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
29,864,992
35,530,384
Cost of sales
(23,979,504)
(25,771,255)
Distribution costs
(1,708,641)
(1,612,498)
Gross profit
4,176,847
8,146,631
Administrative expenses
(2,111,517)
(2,633,003)
Other operating income
449,220
449,220
Exceptional administrative expenses
4
(85,599)
(87,052)
Operating profit
5
2,428,951
5,875,796
Interest payable and similar expenses
8
(1,231,359)
(1,043,225)
Profit before taxation
1,197,592
4,832,571
Tax on profit
9
(267,476)
(901,791)
Profit for the financial year
930,116
3,930,780
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 12 to 24 form part of these financial statements.
PASTA FOODS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 OCTOBER 2024
31 October 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,147,457
3,869,651
Current assets
Stocks
11
3,357,533
2,848,754
Debtors
12
32,169,784
26,108,663
Cash at bank and in hand
2,040,310
1,901,502
37,567,627
30,858,919
Creditors: amounts falling due within one year
13
(15,855,416)
(9,628,077)
Net current assets
21,712,211
21,230,842
Total assets less current liabilities
24,859,668
25,100,493
Creditors: amounts falling due after more than one year
14
(6,926,167)
(7,998,667)
Provisions for liabilities
Deferred tax liability
16
348,860
447,301
(348,860)
(447,301)
Net assets
17,584,641
16,654,525
Capital and reserves
Called up share capital
18
10,000,000
10,000,000
Profit and loss reserves
7,584,641
6,654,525
Total equity
17,584,641
16,654,525
The notes on pages 12 to 24 form part of these financial statements.
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 25 February 2025 and are signed on its behalf by:
Mr S Webber
Director
Company registration number 00566338 (England and Wales)
PASTA FOODS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 November 2022
10,000,000
2,723,745
12,723,745
Year ended 31 October 2023:
Profit and total comprehensive income
-
3,930,780
3,930,780
Balance at 31 October 2023
10,000,000
6,654,525
16,654,525
Year ended 31 October 2024:
Profit and total comprehensive income
-
930,116
930,116
Balance at 31 October 2024
10,000,000
7,584,641
17,584,641
The notes on pages 12 to 24 form part of these financial statements.
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 12 -
1
Accounting policies
Company information
Pasta Foods Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pasta Foods Limited, Forest Way, New Costessey, Norwich, NR5 0JH.
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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Milton Webber Ltd as at 31 October 2024. These consolidated financial statements are available from, Companies House, Crown Way, Cardiff, CF14 3UZ.
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 comprises sales recognised by the company in respect of goods and services supplied during the year, exclusive of Value Added Tax and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), 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 the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 13 -
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:
Plant & machinery
10 - 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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
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.
1.6
Stocks
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost is determined on a first in first out basis, and includes all direct costs incurred and attributable production overheads. Net realisable value is based on estimated selling price allowing for all further costs of completion and disposals. Work in progress is stated on the basis of direct costs plus attributable overheads based on a normal level of activity. Provision is made for any foreseeable losses where appropriate.
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.
1.7
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.
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 14 -
1.8
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 statement of financial position 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.
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.
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 15 -
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.
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.
1.9
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.
1.10
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.
The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 16 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 income statement, 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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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.
1.15
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.
1.16
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 17 -
1.17
The company has an invoice discounting arrangement. The amount owed by customers to the company is included within trade debtors and the amount owed to the invoice discounting company is included within other creditors. The amount owed to the invoice discounting company represents the difference between the amounts advanced by the discounting group and the invoices discounted. The interest element of the invoice discounting charges and other related costs are recognised as they accrue and are included in the Statement of Comprehensive Income within 'interest payable and similar expenses'.
1.18
Exceptional items in the current year and prior year relate to costs related to refinancing.
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for the stock provision. Provision is made for slow moving or obsolete stock that is written down to its original cost without absorbed overheads.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Processed goods
24,609,924
30,448,717
Milled goods
5,255,068
5,081,667
29,864,992
35,530,384
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
3
Turnover
(Continued)
- 18 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
28,976,849
34,633,382
Rest of Europe
406,132
202,285
Rest of World
482,011
694,717
29,864,992
35,530,384
4
Exceptional item
2024
2023
£
£
Expenditure
Exceptional items
85,599
87,052
5
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
80,814
16,291
Research and development costs
88,442
72,624
Fees payable to the company's auditor for the audit of the company's financial statements
17,350
17,010
Depreciation of owned tangible fixed assets
1,021,691
977,949
Operating lease charges
721,968
721,967
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
44
42
Selling and distribution
17
16
Administration
17
16
Total
78
74
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
6
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,764,987
3,156,398
Social security costs
316,053
351,375
Pension costs
84,343
79,902
3,165,383
3,587,675
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
244,713
328,870
Company pension contributions to defined contribution schemes
4,271
4,030
248,984
332,900
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023: 2).
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,231,359
1,043,225
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
365,917
630,515
Deferred tax
Origination and reversal of timing differences
(98,441)
271,276
Total tax charge
267,476
901,791
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 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
1,197,592
4,832,571
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.50%)
299,398
1,087,328
Group relief
(184,623)
Deferred tax adjustments in respect of prior years
357
Fixed asset differences
316
Additional deduction for R&D expenditure
(37,625)
(24,319)
Remeasurement of deferred tax for changes in tax rates
26,988
Ineligible depreciation
5,346
(3,899)
Taxation charge for the year
267,476
901,791
10
Tangible fixed assets
Plant & machinery
£
Cost
At 1 November 2023
11,206,661
Additions
299,497
At 31 October 2024
11,506,158
Depreciation and impairment
At 1 November 2023
7,337,010
Depreciation charged in the year
1,021,691
At 31 October 2024
8,358,701
Carrying amount
At 31 October 2024
3,147,457
At 31 October 2023
3,869,651
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 21 -
11
Stocks
2024
2023
£
£
Raw materials and consumables
1,950,766
1,263,752
Finished goods and goods for resale
1,406,767
1,585,002
3,357,533
2,848,754
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,672,482
6,896,871
Amounts owed by group undertakings
29,862
472,458
Other debtors
110,332
64,650
Prepayments and accrued income
698,709
552,855
6,511,385
7,986,834
2024
2023
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
25,658,399
18,121,829
Total debtors
32,169,784
26,108,663
Amounts owed by group undertakings due within one year are interest free, unsecured and repayable on demand.
Amounts due by group undertakings due after more than one year are interest free and unsecured.
The directors have confirmed that payment will not be requested from fellow group companies within 12 months from the date these financial statements are approved.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
15
4,750,776
2,333,055
Trade creditors
1,790,895
1,820,515
Amounts owed to group undertakings
3,496,033
156,407
Taxation and social security
77,087
77,585
Other creditors
4,751,132
3,845,282
Accruals and deferred income
989,493
1,395,233
15,855,416
9,628,077
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
13
Creditors: amounts falling due within one year
(Continued)
- 22 -
Bank loans totalling £4,750,776 (2023: £2,333,055) are secured by a fixed and floating charge by way of an unlimited multilateral guarantee over the assets of the following companies; Pretty Investments Limited, Pasta Foods Limited, Snack Creations Ltd, Milton Webber Ltd and Pretty Properties Limited.
Other creditors includes £4,506,916 (2023: £3,589,627) secured on the trade debts of the company, and by way of an unlimited multilateral guarantee over the assets of fellow group undertakings, Pretty Investments Limited, Snack Creations Ltd, Milton Webber Ltd and Pretty Properties Limited.
Amounts owed to group undertakings due within one year are interest free, unsecured and repayable on demand.
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
6,499,167
7,571,667
Other creditors
427,000
427,000
6,926,167
7,998,667
Bank loans totaling £6,499,167 (2023: £7,571,667) are secured by a fixed and floating charge by way of an unlimited multilateral guarantee over the assets of the following companies; Pretty Investments Limited, Pasta Foods Limited, Snack Creations Ltd, Milton Webber Ltd and Pretty Properties Limited.
Amounts included above which fall due after five years are as follows:
Payable by instalments
3,015,833
3,850,000
15
Loans and overdrafts
2024
2023
£
£
Bank loans
11,249,943
9,904,722
Payable within one year
4,750,776
2,333,055
Payable after one year
6,499,167
7,571,667
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 23 -
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
354,057
452,460
Short term timing differences
(5,197)
(5,159)
348,860
447,301
2024
Movements in the year:
£
Liability at 1 November 2023
447,301
Credit to profit or loss
(98,441)
Liability at 31 October 2024
348,860
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
84,343
79,902
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.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Allotted, called up and fully paid of £1 each
10,000,000
10,000,000
10,000,000
10,000,000
The ordinary shares each carry one voting right.
Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.
19
Financial commitments, guarantees and contingent liabilities
The company has guaranteed the bank debts of the group. The debts are secured by a fixed and floating charge by way of an Unlimited Multilateral Guarantee over the assets of the following companies: Pretty Investments Limited, Pretty Properties Limited, Pasta Foods Limited, Snack Creations Ltd and Milton Webber Ltd. The maximum amount payable under this guarantee at 31 October 2024 is £6,865,833 (2023: £7,700,000).
PASTA FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 24 -
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
812,759
811,714
Between two and five years
3,247,029
3,243,129
In over five years
506,072
1,318,451
4,565,860
5,373,294
21
Related party transactions
During the year, sales totalling £906,505 (2023: £657,261) were made to a related company by virtue of a director's common control.
Pasta Foods Limited also made recharges of directly attributable costs and overheads amounting to £498,551 (2023: £487,774) during the year to this company.
At the year end an amount totalling £652,552 (2023: £650,816) was due to this company. Of this, there was £427,000 (2023: £427,000) due after more than one year. There is no interest charged on, or security over, this balance.
During the year, purchases totalling £Nil (2023: £131,158) were made to a partnership involving a Director.
22
Ultimate controlling party
The immediate parent company is Milton Webber Ltd, a company incorporated in England and Wales.
The ultimate controlling party is Simon Webber by way of a majority shareholding.
The smallest and largest group in which the results of the company are consolidated is that headed by Milton Webber Ltd. The address of Milton Webber Ltd's registered office is Pasta Foods Limited, Forest Way, New Costessey, Norwich, NR5 0HJ. The consolidated financial statements can be obtained from Companies House.
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