From To Date SubjectSamantha James Phil Roberts 19/7/2013 Palate financial issues I have just came back from the meeting with ABGS. Unfortunately , AGBS decided to terminate the contract following the review by Morgan Catering Advisors and has decided to tender out the contract after the termination. . Nevertheless, Palate has completed an important trading year and we are now in preparation for the board meeting for the year end performance review and initiatives. Please draft for my review a reprt address to Palate Board and the Report should comprise : 1 A review of Palate management accounts for the year to 30/5/2013 You review should analyse the revenue, gross profit and working capital by comparing to 30/5/2012 and by reference to each revenue streams. You should also include an analysis of the minutes of meeting with ABGS and impact to Palate business in future. 2 An assessment of the new contract opportunity with St Albans Performing Arts Centre Using the information provided by Nasir Khan, you should access the expected GP and the breakeven point for the contract for year 2014 and 2015. You should also review and comment on the assumptions made by Nasir Khan and any other assumptions you made. You should also consider any other factors to consider for the contract for the bid of the concession amount. 3 An evaluation of the potential acquisition of Trenchard as identified by Oswald. You should consider all the benefits and risk of the business opportunities for Palate, including any possible ethical concerns Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes From To Date Subject Samantha James Phil Roberts 19/7/2013 Management accounts I have attached the management accounts but have not started any analysis on the statement as I am outstation. Below are the major events happen in FY2013 1 HH opened 3 new superstores in Luton which is about 20‐40km from Palate Palace with the company expected to go listing in December 2014 2 Feedback received from new seasonal menus in RL and Greatwell shows that 82% gave "very satisfactory" rating to the new healthy menu mix, which is slightly lower than 2012 of 89% 3 Wastage for FY 2013 is 7% 4 V park increased the location fees by $5000 and visitors are 209,000 with refurbishment of St Albans Catedral in V park. 5 TGMF Nostalgia weekend in August was a successful event with visitor number at 400,000 as rockband in 2002 such as" backstreet boys" were invited. 6 Following our meeting with ABGS, they have decided to terminate our contract immediately.Nevertheless, wastage in 2012 decreased from 8% to 7% with take up rate per dinner decreased by 15%. 7 Clarkstone take up rate remained at 95% with introduction of healthy eating in Clarkstone Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes Statement of comprehensive income 2013 2012 Var/move % Revenue Cost of sales Food and consumables Wage costs Location fees Transport costs GP 21,885 (10,007) (8,930) (120) (130) 2,698 20,658 (9,597) (8,166) (115) (231) 2,549 1,227 ‐ (410) (764) (5) 101 ‐ 149 6% 4% 9% ‐44% 6% 12% Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes 12% 0% 2013 000 Statement of Financial Position Asset Non‐current assets PPE Current assets Inventories Receivables Cash and cash equivalents Total current assets Total asset Equity & Liabilites Ordinary share capital Retained Earnings Total Equities Total Equity Current liabilities 2012 000 90 98 502 2,571 1,930 5,003 5,093 570 1,709 1,863 4,142 4,240 10 2,553 2,563 2,530 10 1,745 1,755 2,485 Total equity and liabilities Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes 5,093 4,240 XX Executive Exclusive 2013 000 Revenue Humbells hardware Ross Laboratories Greatwell Other Total COS Humbells hardware Ross Laboratories Greatwell Other Total 4,530 2,400 1,532 930 9,392 2012 000 4,059 2,226 1,373 1,936 9,594 3,997 2,090 1,332 800 8,219 3,648 1,958 1,213 1,631 8,450 GP Humbells hardware Ross Laboratories Greatwell Other Total Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes 533 310 200 130 1,173 411 268 160 305 1,144 45% 36% TN ‐ catering for public 2013 000 Revenue V park TG Music Festival Hall Golf Club Other Total 1,450 2,010 1,033 2,750 7,243 38% 2012 000 1,440 1,329 1,287 2,281 6,337 36% Var/move 000 10 681 (254) 469 906 2% % 1% 51% ‐20% 21% 14% COS V park TG Music Festival Hall Golf Club Other Total 1,240 1,753 803 2,300 6,096 20% 1,216 1,092 1,041 1,910 5,259 23% 24 661 (238) 390 837 ‐3% 2% 61% ‐23% 20% 16% GP V park TG Music Festival Hall Golf Club Other Total 210 257 230 450 1,147 18% 224 237 246 371 1,078 21% (14) 20 (16) 79 69 ‐2% ‐6% 8% ‐7% 21% 6% Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes LA ‐ Lunch Ace 2013 000 Revenue ABGS Clarkstone Devaney's Other Total 1,020 1,320 930 1,980 5,250 19% 2012 000 1,147 1,019 872 1,689 4,727 24% COS ABGS Clarkstone Devaney's Other Total GP ABGS Clarkstone Devaney's Other Total 932 1,218 847 1,875 4,872 19% 88 102 83 105 378 23% 1,057 933 799 1,611 4,400 24% 90 86 73 78 327 28% Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes ABGS Minutes of meeting Summary of minutes 1 Headmaster feel that they were cheated with the differences of manual records and POS. Further investigation found that one of our staff have eaten the meal himself without paying 2 Promotion of loyalty schemes is not AGBS's concern. 3 Staff levels below contractual amount is unacceptable and this is seen even during our meeting lunch time Used after used by date caused 2 food poisoning in school in early June 4 2013 5 Shorterning of lunch break ‐ school policy and unable to change Conference catering is now being handled in‐house due to inability of 6 Palate to act in a few incidents 7 Upon completing the meeting, headmaster was disappointed and not confident that Palate can continue to deliver quality services in the future and thus has initiated a termination of the contract. Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes From To Date Subject Nasir Khan Management team 19/7/2013 St Albans Performing Arts Centre (SAPAC) Exhibit 16 SAPAC is a well established entertainment venue in St Albans . In 2012, SAPAC with other established entertainment team and groups were appointed to perform for the opening ceremony for Olympics 2012 and Queen Diamond Jubilee. Following end of the event, they will be back to St Albans to provide a busy programme of National Touring Shows, Rock and Pop Concerts, Comedy, Films, Exhibitions and the region’s most popular Christmas Pantomime, Old English cultural shows, Arabic muslims cultural show, Indian cultural show and etc in 2013/2014. The face value of SAPAC's shows are expensive and some individual even pay more than double the face value through exernal internet sites, both authorised and unauthorised Recently,their catering contract with Revenous is expired and is up for tender. We know the information following advertisement in the local newspaper. We are confident the contract can generate sufficient profit Conditions of the tender as stipulated are as follow: 1 Provide healthy catering for all visitors SAPAC events and to cater the menu according to the theme of shows or entertainment 2 Total catering are for 100 events for the year. There may be other ad hoc catering required but this sill be tendered on separate basis. Successful tender will be the exclusive provider of the restaurant of food in SAPAC. The catering is for food provided before or after the show to the visitors 3 Bidding from concession fees will start from $ 15,000. Tender with the highest concession fees will be preferred but this also depends on the quality of food provided and other factors 4 Caterers have to provide own kitchen equipment Following my own research, there are no information of number of visitors for 2012 due to cancellation of events for olympics 2012 and QDJ. For 2011, The shows had an average 1200 visitors per show. Take up rate for Ravenous catering is 75% Revenue per meal is expected to be $15 Information from our business planning division The average cost of food from our TGMF contract is around $7.50 per meal For these visitors, we require all full time staff of 7 cooks ( $50,000p.a/each ) and 30 casual staff who will work for 6 hours for an event ( $30 per hour) Transportation is expected to be 12 k p.a We would like to know how much location should we bid hence to optimize our gross margin of 18% which is similar to TGMF gross margin in 2012. Secondly, the number of visitors per show are uncertain. We would like to know how many visitors are required in order to cover the locations fees and transportation cost. Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes From To Date Subject Oswald King Phil Roberts 19/7/2013 Potential acquisiton of Trenchard In December, we are shocked to know that one of the founder of Trenchard T Unwin had passed away. The other existing owner has decided to sell the business and have engaged BIMB investment bank for the structure of the deal. In June 2013, Palate was invited to bid for the sale of trade and business of Trenchard. Background on Trenchard From its website, it is noted that : Trenchard was established as a national full service facilities management provider. Understanding that success in business is rarely achieved in isolation and that effective Facilities Management has a key role to play, we offer flexible and measured solutions delivered with real passion. Trenchard was founded in 2003 and is now an established Facilities Management provider that has achieved strong growth, through strong client relationships, built on trust and openness. Our systematic, customer centric approach gives our clients the absolute assurance that their non‐core activities are in a safe pair of hands. Results focused, we measure everything we do from client KPI performance to internal procedures. In 2011, we have acquired a new subsidiary called : Tremendy which specializes in contract catering Trenchard has also won nemerous catering contract following its success in revitalising a few education catering contract which was in the verge of failing. The improvement in these contracts have given significant revenue to Trenchard in which recently Trenchard started to focus on catering. Trenchard customers included state schools , independent schools, football club such as St Alban FC in both facilities management and catering. Most of the contracts of Trenchard are of cost plus nature with facilitites management are at fixed price. Trenchard had stable supply chain with their main supplier 3663 which supply to most of its services in the mass market sector. Trenchard also have accrediation such as fairtrade, ISO 14001, Good egg award, Marine Steardship council membership, soil association food for life and etc Preliminary details of the bid Only 4 companies are invited exclusively for the bid Bidders are required to submit business plan for the future of Trenchard Bidder with the best price and with the most suitable bisness plan will be considered. This is a closed competitive bidding (also called closed bidding), the sealed bids are opened in presence only of authorized personnel. Actions plans for Palate At the moment, we are interested on submiting the bid for acquisition of the trades and business but we are in the midst of submitting the proposal to the board. We would like to have to have your input on the evaluation of the bid and other factors to consider. Please do not worry of the price of the bid as we will engage RK consultant to do the pricing. Thank you. Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes Jamie Oliver to take over catering at Manchester City By Alice Philipson 9:54AM GMT 11 Jan 2013 Jamie Oliver, the television chef will team up with an American hospitality group to take over catering at the Etihad Stadium in a five-year deal. Oliver's catering business Fabulous feasts will be responsible for match-day food as well as catering for conferences and events. The chef will be kept busy providing sustenance for the 48,000-capacity crowd at the stadium, which boasts 11 kitchens, 19 bars and 69 corporate hospitality boxes. American company Legends Hospitality, owned by the Dallas Cowboys and the New York Yankees, will be teaming up with Oliver. Nigel Harris, managing director of Fabulous feats said: "We believe this will be the best stadium catering in the Premier League." The company had shown it could deliver "world-class food on a grand scale", he added. The project will not be Oliver's first Manchester-based venture. The chef already has a branch of his Jamie's Italian restaurant in the city centre. However, the bar is set high at the Etihad Stadium. Since 2002, former MasterChef judge John BensonSmith has worked as a catering consultant for the club, joining forces with current caterers Lindley Venue Catering Last month, Oliver's book 15-Minute Meals became the biggest-selling hardback title of the year, overtaking JK Rowling's The Casual Vacancy three weeks before the end of the year. Oliver's 30-Minute Meals title sold in excess of 1.5 million copies and topped the bestseller chart for more than half a year. purposes Supplier of halal meat containing pork DNA is named 3 February 2013 Last updated at 16:18 GMT The company which supplied halal food found to contain traces of pork DNA to prisons has been named. McColgan's Quality Foods Limited was the source of "the very small number of halal savoury beef pastry products," said food distributor 3663. The County Tyrone company said it was co-operating with The Food Standards Agency. 3663 carried out tests on five products after suspecting the halal products may have contained horsemeat. A 3663 company spokeswoman said it was "shocked" to find pork DNA traces. Under Islamic law, Muslims are required to eat halal food - and eating pork is strictly forbidden. 'Swift measures' The 3663 spokeswoman added the affected products had been withdrawn from supply and were only distributed to prisons. "The products in question are from one particular food manufacturer, McColgan's Quality Foods Limited, and have not been distributed to any other customer. All halal products from this manufacturer have been withdrawn" 3663 said initial tests were carried out on the products after the manufacturer's name appeared on a report by the Food Safety Authority of Ireland (FSAI) following an investigation which discovered horsemeat in some frozen burgers. McGolgan's spokesman "3663 recognised a potential connection between a supplier of halal savoury pie products for the Ministry of Justice and one of their halal beef suppliers mentioned with the FSAI report," the company said. 3663 said horsemeat was not found but "disappointingly, we received evidence that within the products tested there were traces of porcine protein. McGolgan's, based in County Tyrone since the mid-1970s, employs about 100 people at its site on the Dublin Road, Strabane. A spokesman for McColgan's said: "McColgan's has already taken swift measures to identify, isolate and withdraw all of the products which are supplied to the Prison Service while an investigation to determine the circumstances surrounding this deeply regrettable and unforeseen incident takes place. "McColgan's is keen to stress that at no point has pork of any kind been included in the recipes of any of the Halal-certified products it supplies." The Food Standards Agency is now investigating whether the contaminated products were distributed more widely across the UK. Steve Wearne, from the Food Standards Agency, said it had called an urgent meeting "of a range of suppliers" on Monday where it would "stress again the responsibility of all food businesses to ensure the food that they sell contains what it says on the label". Islamic law Halal meat is defined as meat slaughtered by hand and blessed by the person doing the killing, however some Muslims believe a mechanised form is also now acceptable. The editor of the Muslim News, Ahmed Versi, said: "This is very serious because no Muslim would ever eat pork meat anything to do with pork - and it must be very distressing for those in prison who have been given this meat to realise they may have been eating food which was contaminated with pig." Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes 3663 update on horsemeat in 3663 website 3663 can confirm that we have now have over 100 test results for products containing comminuted beef (minced and chopped beef) and that all of these have come back negative for the presence of horsemeat. We continue to compile all the test results from our branded suppliers in line with the FSA recommendations and will keep you updated with these as they are released. We value the trust you place in us and are taking a very proactive approach to managing suppliers and withdrawing products from sale where suppliers are implicated with horse meat contamination even if there is no evidence that our products are directly affected. As soon as we are made aware of any possible contamination with a supplier we take the following precautionary actions: We will withdraw from sale to our customers any comminuted beef lines from suppliers who become connected with any suspicion of potential horse meat contamination. These lines will remain off sale until they have been tested and proved not to contain any horse meat. If any are found to contain horse meat we will pro-actively recall these products. We will continue to provide our customers with a range of suitable alternative products Additionally even where we have test results that show a negative result from a supplier, we will continue to monitor the supplier status. If we have any further information that indicates possible contamination with any supplier we will withdraw products from sale to conduct additional testing even where we already have a test certificate that is negative for the presence of horse meat. We appreciate that this policy may cause some issues with product availability but as a leading distributor of own brand and manufactured food brands, 3663 are committed to having a very proactive approach to this issue in order that our customers can continue to trust the food they buy from us. However, we must stress that this is a precautionary measure as all our test results to date on products have been negative for the presence of horse meat. Disclaimer : the illustrative excersie is designed purely artificial and has no direct relation to ICAEW exams. The exercise is only designed for practice purposes