Company Registration No. 07265685 (England and Wales)
MARKET TOWN FOODS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
PAGES FOR FILING WITH REGISTRAR
MARKET TOWN FOODS LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
MARKET TOWN FOODS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2020
31 March 2020
- 1 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
3
221,329
193,496
Current assets
Stocks
118,564
86,293
Debtors
4
1,026,519
784,562
Cash at bank and in hand
117,730
153,023
1,262,813
1,023,878
Creditors: amounts falling due within one year
5
(7,360,472)
(6,490,351)
Net current liabilities
(6,097,659)
(5,466,473)
Total assets less current liabilities
(5,876,330)
(5,272,977)
Creditors: amounts falling due after more than one year
6
(45,312)
(11,499)
Net liabilities
(5,921,642)
(5,284,476)
Capital and reserves
Called up share capital
1,000
1,000
Profit and loss reserves
(5,922,642)
(5,285,476)
Total equity
(5,921,642)
(5,284,476)
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 30 March 2021
N Jones
Director
Company Registration No. 07265685
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
- 2 -
1
Accounting policies
Company information
Market Town Foods Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Martlet House, E1, Yeoman Gate, Yeoman Way, Worthing, West Sussex, BN13 3QZ.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
At the balance sheet date there was an excess of liabilities over assets. The company is held in a small group
and is supported indirectly by the beneficial owner K M M Al Tajir with loans from companies both within
and outside the group structure, in which K M M Al Tajir has a material interest. K M M Al Tajir has
informed the board of directors that he will continue to support the company indirectly with loans from
companies both within and outside the group structure until the company is in a position to support itself.
The board of directors for this reason consider it appropriate for the accounts to be prepared on a going
concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
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.
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 3 -
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:
Leasehold land and buildings
Straight line per annum over 15 years
Kitchen equipment
15% straight line per annum
Fixtures and fittings
20% and 25% straight line per annum
Motor vehicles
25% straight line per annum
Cutlery, crockery and glassware
33.33% straight line per annum
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 stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 4 -
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.
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 balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts 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. A
m
ounts 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.
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.
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 5 -
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 lease
s
asset are consumed.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Total
72
72
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 6 -
3
Tangible fixed assets
Leasehold land and buildings
Kitchen equipment
Fixtures and fittings
Motor vehicles
Cutlery, crockery and glassware
Total
£
£
£
£
£
£
Cost
At 1 April 2019
141,924
360,033
262,824
84,828
15,321
864,930
Additions
-
37,198
10,053
50,176
92
97,519
Disposals
-
-
-
(18,500)
-
(18,500)
At 31 March 2020
141,924
397,231
272,877
116,504
15,413
943,949
Depreciation and impairment
At 1 April 2019
59,516
341,101
192,246
63,251
15,320
671,434
Depreciation charged in the year
9,795
9,960
31,264
18,654
13
69,686
Eliminated in respect of disposals
-
-
-
(18,500)
-
(18,500)
At 31 March 2020
69,311
351,061
223,510
63,405
15,333
722,620
Carrying amount
At 31 March 2020
72,613
46,170
49,367
53,099
80
221,329
At 31 March 2019
82,408
18,932
70,578
21,577
1
193,496
4
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
89,196
83,153
Amounts owed by group undertakings
712,702
490,174
Other debtors
224,621
211,235
1,026,519
784,562
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 7 -
5
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
240,561
205,929
Amounts owed to group undertakings
4,018,652
3,891,522
Taxation and social security
50,888
50,446
Other creditors
3,050,371
2,342,454
7,360,472
6,490,351
Hire purchase agreements are secured against the asset, which they were originally raised for.
6
Creditors: amounts falling due after more than one year
2020
2019
£
£
Other creditors
45,312
11,499
Hire purchase agreements are secured against the asset, which they were originally raised for.
7
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was qualified and the auditor reported as follows:
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
7
Audit report information
(Continued)
- 8 -
Qualified opinion on financial statements
We have audited the financial statements of Market Town Foods Limited (the 'company') for the year ended 31 March 2020 which comprise , the balance sheet and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2020 and of its loss 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.
Basis for qualified opinion
Due to the coronavirus pandemic it was not practical to attend and observe the physical counting of the inventory at the end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 March 2020, which are included in the balance sheet at £118,564, by using other audit procedures.
Consequently, we were unable to determine whether any adjustment to this amount was necessary.
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 qualified opinion.
The senior statutory auditor was David Macdonald B.A. F.C.A.
The auditor was Martlet Audit Limited.
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2020
2019
£
£
759,750
866,745
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 9 -
9
Events after the reporting date
In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China. The virus has promulgated significantly outside China, and now exists in most of the world. As a result, the World Health Organization declared COVID-19 a pandemic in March 2020.
The company is closely monitoring the situation, by taking all required measures to limit the risk of contagion of employees, to maintain the company’s business, together with taking several steps to further strengthen the financial position and maintaining the company’s financial liquidity. The company’s management has activated several operating and safety procedures, in order to mitigate the potential impact on operations.
MARKET TOWN FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 10 -
10
Related party transactions
Transactions with related parties
The company has provided an interest free loan to Augustus Brandt Antiques International Limited, a company registered in the United Kingdom and outside the group structure. The amount outstanding at the balance sheet date was £158,985 (2019: £136,941). This loan was provided with no formal repayment terms.
The company was provided with an interest free loan from companies outside the group structure, companies in which the former director K M M Al Tajir has a material interest. The loans outstanding at the balance sheet date totalled £2,687,840 (2019: £2,194,948). The director has confirmed that the loans from companies outside the group will not be repaid until the company is in a position to do so.
11
Parent company
The company's ultimate parent company is Palladian Real Estate Limited, a company registered at Unit E1, Yeoman Gate, Yeoman Way, Worthing, England.
The company is included in the consolidated accounts of Palladian Real Estate Limited.