Village Quality Products Limited - Limited company accounts 23.2

REGISTERED NUMBER: 08373109 (England and Wales)

Village Quality Products Limited

Strategic Report,

Report of the Directors and

Audited Financial Statements

for the Year Ended 31 March 2023

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Statement of Cash Flows

14

Notes to the Statement of Cash Flows

15

Notes to the Financial Statements

17

DIRECTORS:

Mr C Agcagul

Mr S Cagin

SECRETARY:

REGISTERED OFFICE:

Unit 1

The Britannia Centre

Lenthall Road

Loughton

IG10 3SQ

REGISTERED NUMBER:

08373109 (England and Wales)

SENIOR STATUTORY AUDITOR:

Altan Kemal FCA FCCA

AUDITORS:

Alton & Co

Chartered Accountants

& Statutory Auditors

239-241 Kennington Lane

London

SE11 5QU

The directors present their strategic report for the year ended 31 March 2023.

The company's performance has been in accordance with the expectations of the directors. The company has shown a high degree of resilience in a competitive industry to achieve targeted results.

REVIEW OF BUSINESS

There has been a rise in the company's turnover compared with last year mainly due to the company's performance improvement drive and increasing the product lines. Profitability over the period has been in line with expectations increasing in line with the rise in sales. The directors expect this trend of growth in sales to continue for the foreseeable future. Village Quality Products Ltd mainly sells groceries and basic food items; the general economic fluctuations in the country do not impact much on the industry in which they operate and the main threat to the company is their competitors. The company's main strategy is to provide a complete service to customers thereby increasing their customer base and the resulting impact on the turnover. It also aims at concentrating on what it does best and ensuring that customers get the best possible service. The company aims at specific markets (and customers) to ensure that a clear strategy to win and maintain these customers are implemented and sustained.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's ability to get an insurance cover is key to their ability to acquire inputs on credit. Most of the company's creditors require an insurance cover to continue supplying on credit. The level of cover depends on the financial health of the company.This is managed by keeping close watch on monthly results and dealing with poor performing lines on a timely basis.

Also maintaining existing customers is key to the companies growth and success.

To manage this risk, the company maintains more than one supplier in order to ensure that failure of one supplier will not affect their ability to meet anticipated demand and customer satisfaction for that matter. Also new product lines are being introduced to ensure that poor performance in one line might not have a significant impact on the company.

KEY PERFORMANCE INDICATORS

The main performance indicators are the sales and the profit margins. Most products are sold at a fixed margin thereby leading to a positive correlation between sales and profit. All other costs apart from cost of sales are fairly fixed. The directors monitor these on a monthly basis to ensure that poor performers are picked up on time and dealt with. They also ensure that other overheads are within cost limits as their effect on the ability to remain in operational existence and profitability is very critical.

The Key Performance Indicators over the last two years are as follows:

2023

2022

£

£

Turnover

30,388

29,410

Gross Profit

6,343

5,798

Net Profit before tax

1,330

865

The directors believe that other variables of performance indicators are marginal and are not the best indicators of the overall performance, development and position of the company.

COMPANY POLICY ON PAYMENT OF CREDITORS

The policy of the company is to agree terms of payment prior to commencing trade with a supplier and to abide by those terms on a timely submission of invoices.

POLICY ON EMPLOYEES

The company is committed to achieving a working environment which provides equality of opportunity and freedom from unlawful discrimination on the basis of gender, sexual orientation, marital or civil partner status, gender reassignment, race, religion or belief, colour, nationality, ethnic or national origin, disability or age, pregnancy or maternity, trade union membership or the fact that they are part-time workers. The company's Equality and Diversity policy aims to remove unfair and discriminatory practices within the company and to encourage full contribution from its diverse community. The company is committed to actively opposing all forms of discrimination. The company also aims to provide a service that does not discriminate against its clients in the means by which they can access the services supplied by the company. The company believes that the directors, employees and customers are entitled to be treated with respect and dignity.The company's employment policy is to provide equal opportunity to all current and prospective employees without any discrimination. They endeavour to provide a work environment in which all individuals are treated with respect and dignity.

SOCIAL, ENVIRONMENT AND ETHICAL MATTERS

The company believes that by operating in an ethical and social aware manner they will help preserve the environment; that being an integral part of efficient and profitable business management. The directors recognise that success in these areas depends on the involvement and commitment of everyone in the organisation.

FUTURE DEVELOPMENT

The directors expect a growth in sales in the future as the company explores new products and customers.

ON BEHALF OF THE BOARD:

Mr S Cagin - Director

16 August 2023

The directors present their report with the financial statements of the company for the year ended 31 March 2023.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of wholesale of groceries.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2023.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

Mr C Agcagul

Mr S Cagin

POLITICAL DONATIONS AND EXPENDITURE

Donations made in the year were not political.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Alton & Co, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S Cagin - Director

16 August 2023

Opinion

We have audited the financial statements of Village Quality Products Limited (the 'company') for the year ended 31 March 2023 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 31 March 2023 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 Statement of Directors' Responsibilities set out on page four, 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:

We obtained an understanding of the legal and regulatory framework that are applicable to the company and determined that the most significant are the food standards regulation and anti bribery regulations. We understand how the company is complying with those regulations by making enquiries of management and key personel; we also reviewed correspondence files. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements using our general commercial and sector experience, through discussion with the directors and other management (as required by auditing standards) and from inspection of the company's regulatory and legal correspondence. We discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated those identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures, we did not become aware of actual or suspected non-compliance.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

Altan Kemal FCA FCCA (Senior Statutory Auditor)

for and on behalf of Alton & Co

Chartered Accountants

& Statutory Auditors

239-241 Kennington Lane

London

SE11 5QU

1 October 2023

TURNOVER

30,387,937

29,410,448

Cost of sales

24,044,639

23,612,320

GROSS PROFIT

6,343,298

5,798,128

Administrative expenses

6,051,431

5,305,494

291,867

492,634

Other operating income

1,040,676

373,270

OPERATING PROFIT

4

1,332,543

865,904

Interest payable and similar expenses

5

1,583

827

PROFIT BEFORE TAXATION

1,330,960

865,077

Tax on profit

6

241,576

123,278

PROFIT FOR THE FINANCIAL YEAR

1,089,384

741,799

PROFIT FOR THE YEAR

1,089,384

741,799

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,089,384

741,799

FIXED ASSETS

Intangible assets

7

4,666

5,145

Tangible assets

8

785,876

1,049,379

790,542

1,054,524

CURRENT ASSETS

Stocks

9

4,544,935

4,442,785

Debtors

10

5,080,408

5,671,861

Cash at bank and in hand

3,597,788

2,430,140

13,223,131

12,544,786

CREDITORS

Amounts falling due within one year

11

8,156,663

8,823,787

NET CURRENT ASSETS

5,066,468

3,720,999

TOTAL ASSETS LESS CURRENT LIABILITIES

5,857,010

4,775,523

CREDITORS

Amounts falling due after more than one year

12

(2,319

)

(6,958

)

PROVISIONS FOR LIABILITIES

15

(191,470

)

(194,728

)

NET ASSETS

5,663,221

4,573,837

CAPITAL AND RESERVES

Called up share capital

16

1

1

Retained earnings

17

5,663,220

4,573,836

SHAREHOLDERS' FUNDS

5,663,221

4,573,837

The financial statements were approved by the Board of Directors and authorised for issue on 16 August 2023 and were signed on its behalf by:

Mr S Cagin - Director

Mr C Agcagul - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2021

1

3,832,037

3,832,038

Changes in equity

Total comprehensive income

-

741,799

741,799

Balance at 31 March 2022

1

4,573,836

4,573,837

Changes in equity

Total comprehensive income

-

1,089,384

1,089,384

Balance at 31 March 2023

1

5,663,220

5,663,221

Cash flows from operating activities

Cash generated from operations

1

2,263,176

2,220,399

Interest paid

(756

)

-

Interest element of hire purchase payments paid

(827

)

(827

)

Tax paid

(63,104

)

(102,735

)

Net cash from operating activities

2,198,489

2,116,837

Cash flows from investing activities

Purchase of intangible fixed assets

(420

)

-

Purchase of tangible fixed assets

-

(766,505

)

Net cash from investing activities

(420

)

(766,505

)

Cash flows from financing activities

Capital repayments in year

(4,639

)

(4,640

)

Inter Company balance

(1,026,386

)

537,219

Net cash from financing activities

(1,031,025

)

532,579

Increase in cash and cash equivalents

1,167,044

1,882,911

Cash and cash equivalents at beginning of year

2

2,430,140

547,229

Cash and cash equivalents at end of year

2

3,597,184

2,430,140

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2023

2022

£

£

Profit before taxation

1,330,960

865,077

Depreciation charges

264,402

351,424

Finance costs

1,583

827

1,596,945

1,217,328

Increase in stocks

(102,150

)

(272,485

)

Decrease/(increase) in trade and other debtors

688,110

(1,095,886

)

Increase in trade and other creditors

80,271

2,371,442

Cash generated from operations

2,263,176

2,220,399

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 March 2023

31/3/23

1/4/22

£

£

Cash and cash equivalents

3,597,788

2,430,140

Bank overdrafts

(604

)

-

3,597,184

2,430,140

Year ended 31 March 2022

31/3/22

1/4/21

£

£

Cash and cash equivalents

2,430,140

547,229

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/4/22

Cash flow

At 31/3/23

£

£

£

Net cash

Cash at bank and in hand

2,430,140

1,167,648

3,597,788

Bank overdrafts

-

(604

)

(604

)

2,430,140

1,167,044

3,597,184

Debt

Finance leases

(11,598

)

4,639

(6,959

)

(11,598

)

4,639

(6,959

)

Total

2,418,542

1,171,683

3,590,225

1.	STATUTORY INFORMATION

Village Quality Products 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.

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.

Masca Holdings Limited is the parent company of the group and copies of the consolidated accounts can be obtained from Unit 2, The Britannia Centre, Lenthall Road, Loughton, IG10 3SQ.

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 is recognised when the customer takes delivery of the goods and is derived from the ordinary activities of the business. All turnover are derived from sales in the UK.

The accrual model is used in recognition of grants where grants are matched against the expenditure it is compensating for.

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.

Patents and licences are being amortised evenly over their estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Short leasehold

-

straight line over the life of the lease

Plant and machinery

-

25% on reducing balance

FF & equipment

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is determined on a first in first out basis. Net realisable value is the selling price less any direct cost to sell.

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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid 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.

3.	EMPLOYEES AND DIRECTORS

2023

2022

£

£

Wages and salaries

1,980,460

1,534,022

Social security costs

180,827

129,189

Other pension costs

16,907

8,288

2,178,194

1,671,499

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

2023

2022

Directors

2

2

Administration and finance

4

2

Operations

81

65

87

69

2023

2022

£

£

Directors' remuneration

-

-

4.	OPERATING PROFIT

The operating profit is stated after charging:

2023

2022

£

£

Hire of plant and machinery

542,838

429,551

Leasing of motor vehicle

1,045,650

1,123,530

Depreciation - owned assets

260,968

347,188

Depreciation - assets on hire purchase contracts

2,535

3,380

Patents and licences amortisation

899

857

Auditors' remuneration

17,000

15,000

Auditors' remuneration for non audit work

15,913

18,000

Foreign exchange differences

-

23,715

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2023

2022

£

£

Interest and penalties

756

-

Hire purchase interest

827

827

1,583

827

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2023

2022

£

£

Current tax:

UK corporation tax

244,834

42,183

Deferred tax provision

(3,258

)

81,095

Tax on profit

241,576

123,278

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023

2022

£

£

Profit before tax

1,330,960

865,077

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2022 - 19%)

252,882

164,365

Effects of:

Expenses not deductible for tax purposes

111

-

Capital allowances in excess of depreciation

-

(41,087

)

Depreciation in excess of capital allowances

46,392

-

Group loss releif

(57,809

)

-

Total tax charge

241,576

123,278