ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
COMPANY INFORMATION
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NEXUS FOODS LIMITED
CONTENTS
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NEXUS FOODS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.
The Company trades under KFC franchised restaurants.
The Company is subject to the difficult trading conditions that are affecting much of the high street and the current economic climate means that it is challenging times. However, the directors are pleased with the results for the year.
The company is subject to the same general risks and uncertainties as any other business, for example, the impact of natural disasters, changes in general economic conditions including currency and interest rate fluctuations and the impact of competition.
The Company, like many, will be exposed to any severe economic slump due to COVID-19 and any further national lockdown scenarios; however, the directors are of the opinion that the Company is well-placed to see out the impact of COVID-19.
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company, these being turnover and EBITDA.
Turnover £6.52m (2019 - £6.28m) EBITDA £0.56m (2019 - £0.66m)
This report was approved by the board on 19 February 2021 and signed on its behalf.
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NEXUS FOODS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2020
The director presents his report and the financial statements for the year ended 31 March 2020.
The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The director is 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 to enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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.
The director who served during the year was:
The director at the time when this Director's Report is approved has confirmed that:
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NEXUS FOODS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
The Quick Service Restaurant market is competitive as ever with customer attitudes evolving to healthier eating and their spending in light of difficult economic conditions.
The Company’s performance shows a continuing positive trend however the business still continues to focus on mitigating the impact of Covid-19 but notwithstanding, the business has fared favourably on the whole during the various lockdowns, with consumers opting to choose take-away, drive-thru and delivery with regards our business. The Company does not face difficulties in meeting its responsibilities with trade and other creditors. Negotiations with landlords on rent demands has been an ongoing exercise to ease matters. The dine-in element of the business has however seen challenges but has been mitigated to a degree by consumers transitioning to delivery and drive-thru channels. The reduction of VAT to 5% has assisted greatly during the Covid-19 period and we as a business utilised various government incentives such as the CJRS (furlough) scheme.
This report was approved by the board on
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NEXUS FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NEXUS FOODS LIMITED
We have audited the financial statements of Nexus Foods Limited (the 'Company') for the year ended 31 March 2020, which comprise the Statement of Income and Retained Earnings, the Balance Sheet, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The director is responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's Report thereon. 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.
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NEXUS FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NEXUS FOODS LIMITED (CONTINUED)
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Director's 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:
As explained more fully in the Director's Responsibilities Statement on page 2, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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NEXUS FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NEXUS FOODS LIMITED (CONTINUED)
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
This report is made solely to the Company's members 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Leytonstone House
Leytonstone
E11 1GA
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NEXUS FOODS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
REGISTERED NUMBER: 03325784
BALANCE SHEET
AS AT 31 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 10 to 21 form part of these financial statements.
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NEXUS FOODS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Nexus Foods Limited ("the Company") is a private company limited by shares, incorporated in England and Wales. Its registered office is 137a High Street North, East Ham, London, E6 1HZ.
The principal activity of the Company is that of KFC franchisees.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Auriga Holdings Limited as at 31 March 2020 and these financial statements may be obtained from Companies House.
The financial statements have been prepared on a going concern basis.
As disclosed in the strategic report, whilst the business still continues to focus on mitigating the impact of COVID-19, the business has fared favourably on the whole during various lockdowns, and this is expected to continue.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the statement of income and retained earnings over its useful economic life being the length of the licence. Other intangible assets Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. Amortisation expense is recognised within Administrative expenses in the statement of income and retained earnings. Licence fees are amortised over the term of the licence as the economic benefit is consumed.
The estimated useful lives range as follows:
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following annual bases:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Income and Retained Earnings.
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
Investments in unlisted Group entities are stated at historic cost less impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment.
Short-term creditors are measured at the transaction price.
Rentals paid under operating leases are charged to the Statement of Income and Retained Earnings on a straight line basis over the lease term.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in the Statement of Income and Retained Earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical judgements in applying accounting policies The Company does not consider there to be any critical judgements in applying accounting policies. Accounting judgements and estimation (i) Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 10 for the carrying amount of tangible fixed assets. (ii) Estimated useful life of intangible assets The annual amortisation charge for intangible assets is sensitive to changes in the estimated useful lives. The useful lives are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the condition of the asset. See note 9 for the carrying amount of license fees and goodwill.
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
7.Taxation (continued)
There were no factors that may affect future tax charges.
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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NEXUS FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Profit and loss account
The Company has guaranteed the bank borrowings of its ultimate parent undertaking, Auriga Holdings Limited. At the year end the amounts guaranteed were £10,870,097 (2019 - £11,586,737).
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £17,288 (2019 - £11,669). Contributions totalling £4,017 (2019 - £3,654) were payable to the fund at the balance sheet date and are included in creditors.
Auriga Holdings Limited whose company number is 03326486 and registered office is 137A High Street North, East Ham, London, E6 1HZ is the ultimate parent undertaking.
The consolidated financial statements of this Company are available to the public and can be obtained from Companies House.
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