Coquet Island Shellfish Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04874060 (England and Wales)

Coquet Island Shellfish Limited

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 30th April 2021

Page

Company information

1

Strategic report

2

Report of the directors

3

Report of the independent auditors

4

to

7

Income statement

8

Other comprehensive income

9

Balance sheet

10

Statement of changes in equity

11

Cash flow statement

12

Notes to the cash flow statement

13

Notes to the financial statements

14

to

23

Directors:

J C Cook

T Newton

Mrs S A Wilson

R Mark

Secretary:

T Newton

Registered office:

Coquet Enterprise Park

Amble

Morpeth

Northumberland

NE65 0PE

Registered number:

04874060 (England and Wales)

Auditors:

Rennie Welch Audit Limited

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

The directors present their strategic report for the year ended 30th April 2021.

Review of business

The board are generally satisfied with the results at year end. The strategy remains to keep stock low in order to be able to follow market trends. Cost increases post Brexit were inevitable and these need to be monitored moving forward specifically in transport, packaging and obviously in terms of clearing agents and health certification. The business had it's first dealings in Asia in the early part of the current year and providing it can retain the trading licence for China, it should be another area of growth in the coming period. The fresh sales in Europe have remained and will continue to be an integral part of the core business. Frozen sales have been compromised to some degree due to difficulties in the supply of liquid Nitrogen but demand seems to be strong and increasing. The scallop business has been scaled back due to volatility in the fresh market and poor prices. Covid continues to impact the business in many areas and will continue to do so for some time. All in all the margin and profitability of the business being retained in very trying and uncertain times is a success in itself.

Results for the year

The results for the year show a profit on ordinary activities before tax of £1,530,844 (2020: £890,905). The Board are satisfied with the performance for the financial year.

The board monitor the progress of the company by the following KPIs:

2021

2020

Turnover

£14,479,057

£15,869,005

GP

15.76%

11.99%

ROCE

53.09%

43.09%

Principal risks and uncertainties

Funding and liquidity risk

The company manages its cash and borrowing requirements in order to minimise interest expense whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

The company has sufficient funding arrangements in place with their bankers to ensure the growth of the business can be maintained.

Market and economic risk

On 1st January 2021 the exporting process changed at the end of the EU transition period. The company has made several changes to their processes to enable them to comply with the new exporting documentation requirements.

The company's international trade exposes it to currency risk. The company manages currency exposure by making appropriate FX hedges.

On behalf of the board:

T Newton - Director

3rd December 2021

The directors present their report with the financial statements of the company for the year ended 30th April 2021.

Principal activity

The principal activity of the company in the year under review was that of shellfish and seafood processing.

Dividends

The total distribution of dividends for the year ended 30th April 2021 will be £ 350,050 .

Directors

The directors shown below have held office during the whole of the period from 1st May 2020 to the date of this report.

J C Cook

T Newton

Mrs S A Wilson

R Mark

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Report of the directors 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;

-	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.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors

The auditors, Rennie Welch Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

T Newton - Director

3rd December 2021

Opinion

We have audited the financial statements of Coquet Island Shellfish Limited (the 'company') for the year ended 30th April 2021 which comprise the Income statement, Other comprehensive income, Balance sheet, Statement of changes in equity, Cash flow statement and Notes to the cash flow statement, 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 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 30th April 2021 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.

Basis for opinion

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 Auditors' 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic report and the Report of the directors, but does not include the financial statements and our Report of the auditors 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.

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 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 the audit:

-	the information given in the Strategic report and the Report of the directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic report and the Report of the directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Report of the directors.

We have nothing to report in respect of the following matters where 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 set out on page three, 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 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.

Auditors' 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 a Report of the auditors 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:

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

Audit response to risks identified

- the nature of the industry and sector, control environment and business performance.

- any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to:

- identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of noncompliance.

- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected, or alleged fraud.

- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.

- the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and have not identified any significant areas with potential for fraud to occur. We hold this view on the basis on that the company is classified under the Companies Act 2006 as a small company for reporting purposes and the nature and quantity of transactions carried out within the year mean that any irregularities or anomalies would be detected. Further to this no non-routine financial accounting has taken place from which we would expect an increase of fraud or error to occur.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company's ability to operate or to avoid a material penalty.

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 Report of the auditors.

Use of our 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 a Report of the auditors 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.

Gillian Adamson BSC (Hons) CA CTA (Senior Statutory Auditor)

for and on behalf of Rennie Welch Audit Limited

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

3rd December 2021

Turnover

3

14,479,057

15,869,005

Cost of sales

(12,196,555

)

(13,965,809

)

Gross profit

2,282,502

1,903,196

Administrative expenses

(960,142

)

(1,152,964

)

1,322,360

750,232

Other operating income

210,451

148,014

Operating profit

5

1,532,811

898,246

Interest receivable and similar income

-

257

1,532,811

898,503

Interest payable and similar expenses

8

(1,967

)

(7,598

)

Profit before taxation

1,530,844

890,905

Tax on profit

9

(270,154

)

(165,191

)

Profit for the financial year

1,260,690

725,714

Profit for the year

1,260,690

725,714

Other comprehensive income

-

-

Total comprehensive income for the year

1,260,690

725,714

Fixed assets

Intangible assets

11

324,782

378,913

Tangible assets

12

656,685

567,318

Investments

13

30,500

30,000

1,011,967

976,231

Current assets

Stocks

14

496,836

531,613

Debtors

15

2,173,928

1,250,140

Cash at bank and in hand

391,408

193,997

3,062,172

1,975,750

Creditors

Amounts falling due within one year

16

1,187,017

867,464

Net current assets

1,875,155

1,108,286

Total assets less current liabilities

2,887,122

2,084,517

Creditors

Amounts falling due after more than one year

17

(67,783

)

(202,091

)

Provisions for liabilities

21

(45,306

)

(19,033

)

Net assets

2,774,033

1,863,393

Capital and reserves

Called up share capital

22

80,501

80,501

Capital redemption reserve

23

22,000

22,000

Retained earnings

23

2,671,532

1,760,892

Shareholders' funds

2,774,033

1,863,393

The financial statements were approved by the Board of Directors and authorised for issue on 3rd December 2021 and were signed on its behalf by:

R Mark - Director

T Newton - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1st May 2019

80,501

1,135,498

22,000

1,237,999

Changes in equity

Dividends

-

(100,320

)

-

(100,320

)

Total comprehensive income

-

725,714

-

725,714

Balance at 30th April 2020

80,501

1,760,892

22,000

1,863,393

Changes in equity

Dividends

-

(350,050

)

-

(350,050

)

Total comprehensive income

-

1,260,690

-

1,260,690

Balance at 30th April 2021

80,501

2,671,532

22,000

2,774,033

Cash flows from operating activities

Cash generated from operations

1

867,985

1,123,125

Interest paid

(1,967

)

(7,598

)

Tax paid

(181,100

)

(158,286

)

Government Grants

110,451

148,014

Net cash from operating activities

795,369

1,105,255

Cash flows from investing activities

Purchase of tangible fixed assets

(187,584

)

(77,159

)

Purchase of fixed asset investments

(500

)

-

Sale of tangible fixed assets

10,000

-

Interest received

-

257

Net cash from investing activities

(178,084

)

(76,902

)

Cash flows from financing activities

Loan repayments in year

(77,324

)

(95,090

)

Amount introduced by directors

7,500

12,100

Equity dividends paid

(350,050

)

(100,320

)

Net cash from financing activities

(419,874

)

(183,310

)

Increase in cash and cash equivalents

197,411

845,043

Cash and cash equivalents at beginning of year

2

193,997

(651,046

)

Cash and cash equivalents at end of year

2

391,408

193,997

1.	Reconciliation of profit before taxation to cash generated from operations

2021

2020

£

£

Profit before taxation

1,530,844

890,905

Depreciation charges

141,907

118,343

Loss on disposal of fixed assets

440

-

Government grants

(110,451

)

(148,014

)

Finance costs

1,967

7,598

Finance income

-

(257

)

1,564,707

868,575

Decrease/(increase) in stocks

34,777

(128,727

)

(Increase)/decrease in trade and other debtors

(923,788

)

874,465

Increase/(decrease) in trade and other creditors

192,289

(491,188

)

Cash generated from operations

867,985

1,123,125

2.	Cash and cash equivalents

The amounts disclosed on the Cash flow statement in respect of cash and cash equivalents are in respect of these Balance sheet amounts:

Year ended 30th April 2021

30.4.21

1.5.20

£

£

Cash and cash equivalents

391,408

193,997

Year ended 30th April 2020

30.4.20

1.5.19

£

£

Cash and cash equivalents

193,997

393,263

Bank overdrafts

-

(1,044,309

)

193,997

(651,046

)

3.	Analysis of changes in net (debt)/funds

At 1.5.20

Cash flow

At 30.4.21

£

£

£

Net cash

Cash at bank and in hand

193,997

197,411

391,408

193,997

197,411

391,408

Debt

Debts falling due within 1 year

(77,818

)

(56,984

)

(134,802

)

Debts falling due after 1 year

(202,091

)

134,308

(67,783

)

(279,909

)

77,324

(202,585

)

Total

(85,912

)

274,735

188,823

1.	Statutory information

Coquet Island Shellfish 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.

The presentation currency of the financial statements is the Pound Sterling (£).

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" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is the amount derived from ordinary activities, and is measured at the fair value of the consideration received or receivable. Turnover is reduced for estimated customer returns, rebates and other similar allowances, and is stated net of VAT.

Revenue from sale of goods is recognised when all the following conditions are satisfied:

- the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the economic benefits associated with the transaction will flow to the company; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill

Goodwill arising on an acquisition of a business is carried at cost less accumulated amortisation and impairment losses, if any. Goodwill is amortised in equal instalments over its estimated useful economic life of 10 years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

-

2% on reducing balance

Improvements to property

-

8% on reducing balance

Plant and machinery

-

15% on reducing balance

Motor vehicles

-

25% on cost

Office equipment

-

15% on reducing balance

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

Stocks

Stock is valued at the lower of cost and estimated selling price less costs to sell. In respect of work in progress and finished goods, cost includes a relevant proportion of overheads according to the stage of completion.

When stocks are 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 of 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.

Financial instruments

The following assets and liabilities are classified as financial instruments - trade debtors, trade creditors, bank loans and directors' loans.

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction cost, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing. Interest expenses is recognised on the basis of the effective interest method and is included in interest payable and similar charges. Borrowings are classified on the basis of the effective interest method and is included in interest payable and similar charges. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business. Trade debtors with no stated interest rate are recognised initially at the transaction price. A provision for the impairment of trade debtors is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditors for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities. Trade creditors with no stated interest rate are recognised at the transaction price.

Directors' loans (being repayable on demand) are measured at the undiscounted amount of the cash or other consideration expected to be paid or received.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Income and Retained Earnings, 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.

Taxation

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

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into sterling at the rates of exchange ruling at the balance sheet date or the forward contract rate, where such contracts are in place. All differences are taken to the profit and loss account.

Leasing commitments

Leases in which substantially all risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Provisions

Provisions are set up only where it is probable that a present obligation exists as a result of an event prior to the balance sheet date and that a payment will be required in settlement that can be estimated reliably. Where material, provisions are calculated on a discounted basis.

Employee benefits

Short-term employee benefits, including holiday pay, are recognised as an expense in the Statement of Income and Retained Earnings in the period in which they are incurred.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. In the statement of financial position, bank overdrafts are shown within borrowings or current liabilities.

Unlisted Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Listed Investments

Listed investments in unquoted shares have been measured at cost less impairment. After initial recognition, listed investments are measured at fair value through the P&L.

Going concern

As set out in the strategic report, the directors believe that the company is continuing to grow, experiencing good levels of profitability and is well placed to manage its business risks successfully.

Accordingly, they have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

3.

Turnover

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2021

2020

£

£

Sale of goods

14,479,057

15,869,005

14,479,057

15,869,005

Revenue by geographical location

The directors consider that to disclose a geographical analysis of turnover would be seriously prejudicial to the company's interests.

4.	Employees and directors

2021

2020

£

£

Wages and salaries

253,567

297,512

Social security costs

8,590

9,450

Other pension costs

28,937

25,371

291,094

332,333

The average number of employees during the year was as follows:

2021

2020

Sales, production and distribution

69

66

2021

2020

£

£

Directors' remuneration

68,534

78,362

5.	Operating profit

The operating profit is stated after charging/(crediting):

2021

2020

£

£

Hire of plant and machinery

31,545

24,438

Other operating leases

-

273

Depreciation - owned assets

81,217

64,213

Loss on disposal of fixed assets

440

-

Goodwill amortisation

54,131

54,130

Foreign exchange differences

(32,099

)

(62,184

)

6.	Auditors' remuneration

2021

2020

£

£

Fees payable to the company's auditors for the audit of the company's financial statements

5,000

5,000

Non audit services £2,000 (2020 - £2,000).