| Kismet Kebabs Ltd |
| Strategic Report |
|
| Review of the business |
|
The Company was incorporated in 2008 to trade as a manufacturer, wholesaler and retailer of doner kebab products. The business has grown in turnover over the year mainly due to the successful introduction of new product lines and an increase in existing lines. The main reason for this success being that the company sells quality and consistent goods and provides a great customer service.
The directors are pleased to report that Kismet Kebabs Ltd has maintained its profitability and its positive progression in the manufacturing and retail of doner kebab products.
The company has only seen a small drop in it's gross profit margin during the year, it was primarily due to the fact of high rates of inflation, especially in the food sector. However, the company operates at a competitive rate due to the purchase of raw materials in bulk at competitive rates. |
|
| Principal risks and uncertainties |
|
The management and the nature of the business are subject to risks that are considered insignificant.
The director is of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks identified below. Where possible , processes are in place to monitor and mitigate such risks. |
|
| Competition |
|
| The market in which the business operates is highly competitive, however because of the purchasing power Kismet Kebabs Ltd maintained their margins. Policies of constant price monitoring and ongoing market research are in place to mitigate any further risks, together with a continuing effort to differentiate the business's offer from that of its competitors. |
|
| Product obsolescence |
|
| In common with many other retailers and wholesalers, the directors are committed to the ongoing monitoring of products and implementation of new products and are confident that the business is able to react effectively to developments within the market. |
|
| Liquidity risk |
|
| Kismet Kebabs Ltd seeks to manage financial risk to ensure sufficient liquidity is available to meet |
| its needs for the foreseeable future. Cashflow forecasting is performed to identify challenging |
| periods in advance. |
|
| Currency risk |
|
| The company forward purchases its foreign exchange for the whole year and is not exposed to its |
| fluctuation. This lowers the risk and aids the company with competitive prices of raw materials. |
|
| Credit risk |
|
| All customers who trade with the company are subject to credit checks and must follow the |
| company policy on payment terms. Strict credit control systems are in place to monitor |
| customer accounts to lower the risk of potential bad debts. |
|
| This report was approved by the board on 5 December 2023 and signed on its behalf. |
|
|
|
| Huseyin Enver |
| Director |
|
|
| 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
| ● |
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. |
|
| Matters on which we are required to report by exception |
| Kismet Kebabs Ltd |
| Statement of Cash Flows |
| for the year ended 31 May 2023 |
|
| Notes |
|
2023 |
|
2022 |
| £ |
£ |
| Operating activities |
| Profit for the financial year |
1,025,240 |
|
1,064,216 |
|
| Adjustments for: |
| Interest receivable |
(783) |
|
(174) |
| Interest payable |
45,941 |
|
5,896 |
| Tax on profit on ordinary activities |
35,003 |
|
(330,401) |
| Depreciation |
307,949 |
|
259,196 |
| Increase in stocks |
(212,544) |
|
(359,094) |
| Increase in debtors |
(286,630) |
|
(132,505) |
| Increase in creditors |
6,506 |
|
100,181 |
|
|
|
920,682 |
|
607,315 |
|
| Interest received |
783 |
|
174 |
| Interest paid |
|
|
(28,153) |
|
(5,710) |
| Interest element of finance lease payments |
(17,788) |
|
(186) |
| Corporation tax paid |
- |
|
330,401 |
|
| Cash generated by operating activities |
875,524 |
|
931,994 |
|
|
|
|
|
|
| Investing activities |
| Payments to acquire tangible fixed assets |
(1,020,160) |
|
(1,080,313) |
| Proceeds from sale of tangible fixed assets |
36,847 |
|
- |
|
| Cash used in investing activities |
(983,313) |
|
(1,080,313) |
|
|
|
|
|
|
| Financing activities |
| Equity dividends paid |
(135,318) |
|
(81,647) |
| Repayment of loans |
157,613 |
|
163,502 |
| Capital element of finance lease payments |
360,842 |
|
60,958 |
|
| Cash generated by financing activities |
383,137 |
|
142,813 |
|
|
|
|
|
|
| Net cash generated/(used) |
| Cash generated by operating activities |
875,524 |
|
931,994 |
| Cash used in investing activities |
(983,313) |
|
(1,080,313) |
| Cash generated by financing activities |
383,137 |
|
142,813 |
|
| Net cash generated/(used) |
275,348 |
|
(5,506) |
|
| Cash and cash equivalents at 1 June |
164,260 |
|
169,765 |
| Cash and cash equivalents at 31 May |
439,608 |
|
164,259 |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
| Cash at bank |
464,500 |
|
164,259 |
| Bank overdrafts |
11 |
|
(24,892) |
|
- |
|
|
|
439,608 |
|
164,259 |
|
|
|
|
|
|
|
|
|
Investment property |
|
Investment property is initially recognised at cost and then subsequently measured at fair value. Changes in value are recognised in profit or loss. |
|
|
Investments |
|
Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction.
At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
| 2 |
Analysis of turnover |
2023 |
|
2022 |
| £ |
£ |
|
|
Sale of goods |
18,117,424 |
|
14,442,796 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
18,010,651 |
|
14,296,301 |
|
Europe |
106,773 |
|
146,495 |
|
|
|
|
|
|
18,117,424 |
|
14,442,796 |
|
|
|
|
|
|
|
|
|
|
| 3 |
Operating profit |
2023 |
|
2022 |
| £ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
274,215 |
|
225,462 |
|
Depreciation of assets held under finance leases and hire purchase contracts |
|
33,734 |
|
33,734 |
|
Auditors' remuneration for audit services |
5,200 |
|
4,800 |
|
Carrying amount of stock sold |
11,039,687 |
|
8,603,490 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Directors' emoluments |
2023 |
|
2022 |
| £ |
£ |
|
|
Emoluments |
248,770 |
|
257,459 |
|
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
|
Emoluments |
96,568 |
|
95,641 |
|
|
|
|
|
|
|
|
|
|
| 5 |
Staff costs |
2023 |
|
2022 |
| £ |
£ |
|
|
Wages and salaries |
2,173,366 |
|
1,760,491 |
|
Social security costs |
186,104 |
|
140,192 |
|
Other pension costs |
23,594 |
|
17,131 |
|
|
|
|
|
|
2,383,064 |
|
1,917,814 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
11 |
|
9 |
|
Manufacturing |
59 |
|
59 |
|
Marketing |
2 |
|
1 |
|
Sales |
6 |
|
6 |
|
|
|
|
|
|
78 |
|
75 |
|
|
|
|
|
|
|
|
|
|
| 6 |
Interest payable |
2023 |
|
2022 |
| £ |
£ |
|
|
Bank loans and overdrafts |
22,756 |
|
2,869 |
|
Other loans |
5,397 |
|
2,841 |
|
Finance charges payable under finance leases and hire purchase contracts |
|
17,788 |
|
186 |
|
|
|
|
|
|
45,941 |
|
5,896 |
|
|
|
|
|
|
|
|
|
|
| 7 |
Taxation |
2023 |
|
2022 |
| £ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
35,003 |
|
(146,829) |
|
Adjustments in respect of previous periods |
- |
|
(183,572) |
|
|
|
|
|
|
35,003 |
|
(330,401) |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit/(loss) on ordinary activities |
35,003 |
|
(330,401) |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2023 |
|
2022 |
| £ |
£ |
|
Profit on ordinary activities before tax |
1,060,243 |
|
733,815 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
| £ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
201,446 |
|
139,425 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
(166,443) |
|
(286,254) |
|
Adjustments to tax charge in respect of previous periods |
- |
|
(183,572) |
|
|
Current tax charge for period |
35,003 |
|
(330,401) |
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
|
|
| 8 |
Tangible fixed assets |
|
|
Land and buildings |
|
Motor vehicles |
|
Fixtures, fittings, tools and equipment |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
| £ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 June 2022 |
1,414,787 |
|
372,600 |
|
1,700,564 |
|
3,487,951 |
|
Additions |
339,816 |
|
13,250 |
|
667,094 |
|
1,020,160 |
|
Disposals |
- |
|
(94,655) |
|
- |
|
(94,655) |
|
At 31 May 2023 |
1,754,603 |
|
291,195 |
|
2,367,658 |
|
4,413,456 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 June 2022 |
749,213 |
|
176,556 |
|
602,094 |
|
1,527,863 |
|
Charge for the year |
- |
|
43,114 |
|
264,835 |
|
307,949 |
|
On disposals |
- |
|
(57,808) |
|
- |
|
(57,808) |
|
At 31 May 2023 |
749,213 |
|
161,862 |
|
866,929 |
|
1,778,004 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 May 2023 |
1,005,390 |
|
129,333 |
|
1,500,729 |
|
2,635,452 |
|
At 31 May 2022 |
665,574 |
|
196,044 |
|
1,098,470 |
|
1,960,088 |
|
|
|
|
|
|
|
|
|
|
|
| 9 |
Stocks |
2023 |
|
2022 |
| £ |
£ |
|
|
Finished goods and goods for resale |
928,064 |
|
715,520 |
|
|
|
|
|
|
|
|
|
|
| 10 |
Debtors |
2023 |
|
2022 |
| £ |
£ |
|
|
Trade debtors |
1,208,291 |
|
751,592 |
|
Other debtors |
552,438 |
|
722,584 |
|
Prepayments and accrued income |
846 |
|
769 |
|
|
|
|
|
|
1,761,575 |
|
1,474,945 |
|
|
|
|
|
|
|
|
|
|
| 11 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
| £ |
£ |
|
|
Bank overdrafts |
24,892 |
|
- |
|
Bank loans |
128,233 |
|
93,932 |
|
Obligations under finance lease and hire purchase contracts |
166,377 |
|
20,900 |
|
Trade creditors |
1,067,686 |
|
869,108 |
|
Corporation tax |
35,003 |
|
- |
|
Other taxes and social security costs |
10,090 |
|
56,989 |
|
Other creditors |
168,574 |
|
283,631 |
|
Accruals and deferred income |
5,203 |
|
35,319 |
|
|
|
|
|
|
1,606,058 |
|
1,359,879 |
|
|
|
|
|
|
|
|
|
|
| 12 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
| £ |
£ |
|
|
Bank loans |
192,882 |
|
69,570 |
|
Obligations under finance lease and hire purchase contracts |
255,423 |
|
40,058 |
|
|
|
|
|
|
448,305 |
|
109,628 |
|
|
|
|
|
|
|
|
|
|
| 13 |
Obligations under finance leases and hire purchase |
2023 |
|
2022 |
|
contracts |
£ |
£ |
|
|
Amounts payable: |
|
Within one year |
166,377 |
|
20,900 |
|
Within two to five years |
255,423 |
|
40,058 |
|
|
|
|
|
|
421,800 |
|
60,958 |
|
|
|
|
|
|
|
|
|
|
|
| 14 |
Share capital |
Nominal |
|
2023 |
|
2023 |
|
2022 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
100 |
|
100 |
|
100 |
|
|
|
|
|
|
|
|
|
|
| 15 |
Profit and loss account |
2023 |
|
2022 |
| £ |
£ |
|
|
At 1 June |
2,845,205 |
|
1,862,636 |
|
Profit for the financial year |
1,025,240 |
|
1,064,216 |
|
Dividends |
(135,318) |
|
(81,647) |
|
|
At 31 May |
3,735,127 |
|
2,845,205 |
|
|
|
|
|
|
|
|
|
|
| 16 |
Dividends |
2023 |
|
2022 |
| £ |
£ |
|
|
Dividends on ordinary shares (note 15) |
135,318 |
|
81,647 |
|
|
|
|
|
|
|
|
|
|
|
| 17 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
|
| 18 |
Legal form of entity and country of incorporation |
|
|
Kismet Kebabs Ltd is a private company limited by shares and incorporated in England. |
|
|
| 19 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
|
Milton House, Maldon Road, Latchingdon, Essex, CM3 6LF |
|
|
| 20 |
Reconciliations on adoption of FRS 102 |
|
|
Profit and loss for the year ended 31 May 2022 |
£ |
|
|
Profit under former UK GAAP |
1,064,216 |
|
|
Profit under FRS 102 |
1,064,216 |
|
|
|
|
|
|
|
|
Balance sheet at 31 May 2022 |
£ |
|
|
Equity under former UK GAAP |
2,845,305 |
|
|
Equity under FRS 102 |
2,845,305 |
|
|
|
|
|
|
|
|
Balance sheet at 1 June 2021 |
£ |
|
|
Equity under former UK GAAP |
- |
|
|
Equity under FRS 102 |
- |
|
|
|
|
|
|
|
