Avebe UK Limited - Accounts to registrar (filleted) - small 18.2

AVEBE UK LIMITED

Financial Statements

for the Year Ended 31 July 2021

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

Directors:

C D H Brown

L Van Der Ree

E M Elderman

Registered office:

483 Green Lanes

London

N13 4BS

Registered number:

00892833 (England and Wales)

Auditors:

Haines Watts (City) LLP

Statutory Auditor

New Derwent House

69-73 Theobalds Road

London

WC1X 8TA

Current assets

Stocks

5

772,036

-

Debtors

6

363,110

907,021

Cash at bank

269,003

31,203

1,404,149

938,224

Creditors

Amounts falling due within one year

7

522,168

93,191

Net current assets

881,981

845,033

Total assets less current liabilities

881,981

845,033

Provisions for liabilities

(1,330

)

-

Pension asset/(liability)

11

7,000

(62,000

)

Net assets

887,651

783,033

Capital and reserves

Called up share capital

8

246,154

246,154

Share premium

9

253,848

253,848

Retained earnings

9

387,649

283,031

Shareholders' funds

887,651

783,033

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 22 February 2022 and were signed on its behalf by:

E M Elderman - Director

1.	Statutory information

Avebe UK Limited is a private Company, limited by shares, registered in England and Wales. The Company's registered number and registered office address can be found on the Company Information page.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The presentation currency is £ sterling, rounded to the nearest £1.

Related party exemption

The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the Group.

Critical accounting estimates and judgements

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. The estimates and assumptions that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(i) Defined benefit pension scheme

The Company has an obligation to pay pension benefits to certain employees. The cost of these benefits and present vales of the obligation depend on a number of factors, including: life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends. See note 10 for the disclosure relating to the defined benefit pension scheme.

(ii) Deferred tax

Deferred tax arises from timing differences that are between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.

Deferred tax is recognised on all timing differences at the reporting date expect for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing differences.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover comprises revenue recognised by the Company in respect of commissions derived from selling industrial starch derivatives, exclusive of Value Added Tax and trade discounts.

Management income is recognised when the Company incurs a liability in relation to an expense on which a cost, plus a margin, is recharged to the parent company under a transfer pricing agreement.

External income from the sale of goods are recognised when all the major risks and rewards have been transferred to the buyer, measured on the accruals basis.

Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow moving stocks. Cost includes all associated direct costs. Net realisable value is based on the estimated selling price.

The sale of stock is on a first in first out (FIFO) basis.

When stock is sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of stocks recognised as an expense in the period in which the reversal occurs.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Foreign currency transactions are translated into the functional currency using the rate ruling on the date the transaction occurred.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates prevailing at the reporting date. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account within administrative expenses.

Pensions

(i) Defined benefit pension plans

The Company operates a defined benefit pension plan. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan. This plan was closed to new entrants in 1991.

The asset recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of the plan assets at the reporting date. The Company recognizes an asset on the pension as the surplus is greater than the expected future service cost assuming all active members remain in service until retirement age.

The defined obligation is calculated using the projected unit credit method. Annually the Company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated is sterling and that have terms approximating the estimated period of the future payments (discount rate).

The fair value of plan assets is measured is accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from professional adjustments and changes in actuarial assumptions are changed or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interests are disclosed as "Remeasurement of net defined benefit asset".

The cost of the defined benefit plan, recognized in profit or loss as employee costs except where included in the cost of an asset, comprises:

(a) The increase in pension benefit asset arising from employee service during the period; and

(b) The cost of plan, benefit changes, curtailment and settlements.

The net interest cost is calculated by applying the discount rate to the net balances of the defined benefit obligation and the fair value of plan assets. This cost is recognized in profit or loss as "Finance expenses "

(ii) Defined contribution pension plans

A second scheme was started in October 1991, which is invested with an insurance company on a money purchase basis. The Company contributes to individual employees personal pension schemes. Once the contributions have been paid the Company has no further obligations. The cost of these contributions is recognized in the year in which payments are due. Any amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the Company in independently administered funds

Going concern

These financial statements have been prepared on a going concern basis.

The current economic conditions present increased risks for all businesses. In response to such conditions, the directors have carefully considered these risks including an assessment on uncertainty on future trading projection for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis. The directors have produced budgets including cash flow projections, which indicate that the Company will have sufficient resources.

In addition, the Company's assets are assessed for recoverability on a regular basis, and the directors consider that the Company is not exposed to losses on these assets which would affect their decision to adopt the going concern basis.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubts upon the Company's ability to continue as a going concern. Thus the directors have continued to adopt the going concern basis of accounting in preparing these financial statements. Avebe UA. has provided a letter of support, that they as the parent company will continue to support the UK Company for a period of at least 12 months from the signing of the financial statements.

The directors acknowledge the current outbreak of COVID-19 which is causing economic disruption in most countries and its potentially adverse economic impact on the Company. This is an additional risk factor which could impact the operations of the Company after year end.

The directors are actively monitoring developments closely. Given the nature of the outbreak and the on-going developments, there is a high degree of uncertainty and it is not possible at this time to predict the extent and nature of the overall future impact on the Company.

3.	Employees and directors

The average number of employees during the year was 4 (2020 - 4 ) .

4.	Tangible fixed assets

Plant and

machinery

£

Cost

At 1 August 2020

and 31 July 2021

341,699

Depreciation

At 1 August 2020

and 31 July 2021

341,699

Net book value

At 31 July 2021

-

At 31 July 2020

-

5.

Stocks

2021

2020

£

£

Stocks

772,036

-

6.

Debtors

2021

2020

£

£

Amounts falling due within one year:

Trade debtors

278,587

-

Amounts owed by group undertakings

51,961

870,000

Other debtors

12,103

-

Tax

-

601

VAT

-

2,750

Prepayments and accrued income

20,459

21,890

363,110

895,241

Amounts falling due after more than one year:

Deferred tax asset

-

11,780

Aggregate amounts

363,110

907,021

7.

Creditors: amounts falling due within one year

2021

2020

£

£

Trade creditors

35,876

4,784

Amounts owed to group undertakings

275,944

34,880

Tax

4,707

7,774

VAT

156,339

-

Accruals and deferred income

49,302

45,753

522,168

93,191

8.	Called up share capital

Allotted, issued and fully paid:

Number:

Class:

Nominal

2021

2020

value:

£

£

246,154

Ordinary

£1

246,154

246,154

9.

Reserves

Retained

Share

earnings

premium

Totals

£

£

£

At 1 August 2020

283,031

253,848

536,879

Profit for the year

48,728

48,728

Remeasure pension gain/(loss)

55,890

-

55,890

At 31 July 2021

387,649

253,848

641,497

10.	Disclosure under Section 444(5B) of the Companies Act 2006

The Auditors' Report was unqualified.

Andrew Jepson FCCA (Senior Statutory Auditor)

for and on behalf of Haines Watts (City) LLP

11.	Employee benefit obligations

The Company operates a Defined benefit pension scheme, which is funded. The pension cost and provision for the year ended 31 July 2021 are based on the advice of a professionally qualified actuary. The most recent formal valuation is dated 30 June 2017 and was updated to 31 July 2021.

The scheme is closed to new entrants. As a consequence, the current service cost calculated under the projected unit method can be expected to increase over time as the average age of membership increases.

The Company pays contributions at the rate of 58.1% (2020: 58.1%) of pensionable pay plus £13,417 (2020: £13,417) per month. Member contributions are payable in addition at the rate of 8.0% (2020: 8.0%) of pensionable pay.

The contribution made for the year ended 31 July 2021 was £29,000 (2020: £28,000). The agreed contribution rate for future years is 58.1% (2020: 58.1%) plus £29,000 for August 2021.

Under the projected unit method the current service cost will increase as the members of the scheme approach retirement.

Reconciliation of scheme liabilities and assets:

Reconciliation of present value of plan liabilities

2021

£

At the beginning of the year

(2,061,000

)

Expenses paid on behalf of the scheme

(12,000

)

Current service cost

(29,000

)

Interest expenses

(35,000

)

Actuarial Gains

60,000

Participant contributions

(4,000

)

Benefits paid and expenses

50,000

At the end of the year

(2,031,000

)

Reconciliation of present value of plan assets

2021

£

At the beginning of the year

1,999,000

Interest cost

34,000

Actuarial gains

24,000

Employer contributions

27,000

Benefits paid

(50,000

)

Participation contribution

4,000

At the end of the year

2,038,000

Employee benefit obligations (continued)

2021

2020

£

£

Fair value of plan assets at end of the year

2,038,000

1,999,000

Present value of plan liabilities at end of the year

(2,031,000

)

(2,061,000

)

Net pension scheme asset

7,000

(62,000

)

The total costs recognised as an expense are as follows:

2021

2020

£

£

Expenses on behalf of scheme

12,000

12,000

Current service cost

29,000

27,000

Interest income

1,000

(2,000

)

Closing defined benefit obligation

42,000

37,000

The fair value of plan assets were as follows:

2021

2020

£

£

With profit policy

2,036,000

1,988,000

Cash

2,000

11,000

2,038,000

1,999,000

The return on the plan assets was

2021

2020

£

£

Interest income

34,000

42,000

Return on plan assets less interest income

24,000

45,000

Total return on plan assets

58,000

87,000

Assumed healthcare cost trend rates have a significant effect on the amounts recognised in profit or loss. A one percentage point change in assumed healthcare cost trend rates would have the following effects:

2021

2020

years

years

Longevity at age 64 current pensioners

Males

21.7

23.5

Females

23.5

25.4

Longevity at age 64 future pensioners

Males

23.0

24.9

Females

25.0

27.0

Employee benefit obligations (continued)

Amounts for the current and previous year are as follows:

Defined benefit pension schemes

2021

2020

%

%

Expected rate of salary increases

4.2

3.9

Expected rate of increase of pensions in payment

3.2

2.9

Discount rates

1.6

1.7

Rates of inflation

3.2

2.9

Defined contribution schemes

In October 1991 the company commenced a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund.

The amount recognised as an expense for the defined contribution scheme was:

2021

2020

£

£

Current year contribution

19,000

21,800

12.	Ultimate controlling party

The parent undertaking and ultimate controlling party is Cooperative Verkoop-en Producievereniging van Aadappelmeel en Derivaten 'AVEBE' UA, a company incorporated in The Netherlands which is the smallest and largest group which consolidates these results.

Copies of the financial statements can be obtained from AVEBE UA. P.O Box 15, 9640 AA Veendam, The Netherlands.