Denhay Farms Limited 00504226 false 2022-04-01 2023-03-31 2023-03-31 The principal activity of the company is Bacon Curing. 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Registration number: 00504226

Denhay Farms Limited

Annual Report and Financial Statements

for the Year Ended 31 March 2023

 

Denhay Farms Limited

Contents

Company Information

1

Strategic Report

2

Directors' Report

3 to 4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 9

Profit and Loss Account

10

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Statement of Cash Flows

14

Notes to the Financial Statements

15 to 28

 

Denhay Farms Limited

Company Information

Directors

The Rt. Hon. H L A Hood

Mr J P Loescher

Mr S J Streatfeild

Mr G H Streatfeild

Mrs A C Streatfeild

The Hon. J S Hood

Mr D K Homan

Company secretary

Thrings Company Secretarial Limited

Registered office

The Paragon
Counterslip
Bristol
Avon
BS1 6BX

Auditors

Mitchams Accountants Limited
1 Cornhill
Ilminster
Somerset
TA19 0AD

 

Denhay Farms Limited

Strategic Report for the Year Ended 31 March 2023

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

Principal activity

The principal activity of the company is Bacon Curing.

Fair review of the business

The company continued to concentrate on its core activities of bacon curing, slicing and packing at its factory in Honiton. Its focus remains on the production of premium quality dry-cured bacon. Reflecting the structure of the UK food chain, the company sells the bulk of its bacon to national supermarkets, though it also supplies smaller retailers and local businesses.

The company ceased its farming operations and disposed of the majority of farming-related assets in the comparative period. Income and expenditure relating to these discontinued operations is reported on the face of the Profit and Loss Account.

The company's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2023

2022

Turnover - continuing operations

£

7,035,923

7,035,001

Gross profit margin - continuing operations

%

15

10

Profit/(loss) before tax - continuing operations

£

589,071

288,479

Turnover from continuing operations remained consistent with the prior year. A change in promotional programs resulted in less volume being sold compared to the prior year but the company responded to significant cost inflation by increasing its selling prices.

Principal risks and uncertainties

Consumer Demand
A change in consumer behaviour or a deterioration to the UK economy could lead to a fall in demand for bacon products. To mitigate this risk the company works closely with its customers, and is able to adapt its product range to meet different price points or align with certain market trends.

Pig Meat Price and Availability
Although all pork is procured from the UK, changes in the global pig market could impact the price and availibility of UK pork.

Other Input Costs and Availability
The company has a variety of input costs which include plastic and cardboard. Global demand could impact the price and availability of these products.

Approved and authorised by the Board on 20 October 2023 and signed on its behalf by:
 

.........................................
Mr J P Loescher
Director

 

Denhay Farms Limited

Directors' Report for the Year Ended 31 March 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors of the company

The directors who held office during the year were as follows:

The Rt. Hon. H L A Hood

Mr J P Loescher

Mr S J Streatfeild

Mr G H Streatfeild

Mrs A C Streatfeild

The Hon. J S Hood

Mr D K Homan

Dividends

The directors do not recommend the payment of a final dividend for the year ended 31 March 2023.

Financial instruments

Objectives and policies

The company's activities expose it to a number of financial risks as set out below.

Price risk, credit risk, liquidity risk and cash flow risk

The company's principal financial instruments comprise bank balances (including short-term deposits), trade creditors, trade debtors and finance lease agreements. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.

Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.

In respect of bank balances the liquidity risk is managed by maintaining sufficient cash reserves in the business to fund day-to-day working capital requirements, including the repayment of trade creditors. The company also ensure that term deposits are only invested for short periods of time with staggered maturity dates.

In respect of outstanding hire purchase creditors, the company manages the liquidity risk by ensuring there are sufficient funds to meet the monthly repayment and interest charges when they fall due.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

 

Denhay Farms Limited

Directors' Report for the Year Ended 31 March 2023

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Mitchams Accountants Limited as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved and authorised by the Board on 20 October 2023 and signed on its behalf by:
 

.........................................
Mr J P Loescher
Director

 

Denhay Farms Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

 

Denhay Farms Limited

Independent Auditor's Report to the Members of Denhay Farms Limited

Opinion

We have audited the financial statements of Denhay Farms Limited (the 'company') for the year ended 31 March 2023, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and 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 auditor 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 director's 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 original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Denhay Farms Limited

Independent Auditor's Report to the Members of Denhay Farms Limited

We have nothing to report in this regard.

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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 5], 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 is 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.

Auditor 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 an auditor’s report 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:

 

Denhay Farms Limited

Independent Auditor's Report to the Members of Denhay Farms Limited

In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud, we have obtained an understanding of the nature of the industry, the control environment and the legal and regulatory frameworks that the company operates in.

We determinded that the most significant applicable legal and regulatory frameworks are those directly relevant to the reporting framework and preparation of the financial statements (FRS102, Companies Act 2006 and UK tax legislation). We considered the extent to which non-compliance might have material effect on the financial statements.

We determinded the principle risks which could lead to material misstatement of the financial statements to be related to posting inappropriate journal entries and accounting estimates.

Audit procedures performed by the engagement team included:

- Enquiries with management to understand managements' approach to ensuring compliance with laws and regulations, and to obtain knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements;

- Testing journal entries to identify any unusual transactions, or those outside the normal course of business, which may indicate risks of material misstatement due to fraud;

- Testing of balances and transaction that are subject to estimation uncertainty by review of evidence supporting the assumptions and judgements used, and determining whether those judegments used indicate potential bias;

- Reading minutes of meetings of those charged with governance;

- Review of legal expense accounts to identify spend which may be indicative of breaches of laws and regulations;

- Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with the provisions of laws and regulations described above.

The engagement team also remained aware of the need for professional scepticism to identify any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in the audit procedures described above and further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

Denhay Farms Limited

Independent Auditor's Report to the Members of Denhay Farms Limited

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 an auditor’s report 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.

......................................
Timothy Maclellan (Senior Statutory Auditor)
For and on behalf of Mitchams Accountants Limited, Statutory Auditor

1 Cornhill
Ilminster
Somerset
TA19 0AD

25 October 2023

 

Denhay Farms Limited

Profit and Loss Account for the Year Ended 31 March 2023

Note

Continuing operations
2023
£

Discontinued operations
2023
£

Total
2023
£

Continuing operations
2022
£

Discontinued operations
2022
£

Total
2022
£

Turnover

3

7,035,923

125,883

7,161,806

7,035,001

1,058,353

8,093,354

Cost of sales

 

(6,005,056)

(113,032)

(6,118,088)

(6,302,370)

(1,040,154)

(7,342,524)

Gross profit

 

1,030,867

12,851

1,043,718

732,631

18,199

750,830

Administrative expenses

 

(455,319)

-

(455,319)

(423,925)

(59,313)

(483,238)

Other operating income

4

10,405

-

10,405

-

53,889

53,889

Operating profit

5

585,953

12,851

598,804

308,706

12,775

321,481

Gain on disposal of fixed asset investments

 

-

113,430

113,430

-

-

-

Other interest receivable and similar income

6

7,255

-

7,255

53

-

53

Interest payable and similar charges

7

(4,137)

-

(4,137)

(20,280)

(3,357)

(23,637)

 

3,118

113,430

116,548

(20,227)

(3,357)

(23,584)

Profit before tax

 

589,071

126,281

715,352

288,479

9,418

297,897

Tax on profit

11

(102,746)

-

(102,746)

(145,015)

-

(145,015)

Profit for the financial year

 

486,325

126,281

612,606

143,464

9,418

152,882

The company has no recognised gains or losses for the year other than the results above.

 

Denhay Farms Limited

Statement of Comprehensive Income for the Year Ended 31 March 2023

2023
£

2022
£

Profit for the year

612,606

152,882

Total comprehensive income for the year

612,606

152,882

 

Denhay Farms Limited

(Registration number: 00504226)
Balance Sheet as at 31 March 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

12

480,824

251,447

Other financial assets

13

-

56

 

480,824

251,503

Current assets

 

Stocks

14

405,751

498,822

Debtors

15

937,582

914,273

Cash at bank and in hand

 

2,172,093

1,759,240

 

3,515,426

3,172,335

Creditors: Amounts falling due within one year

17

(740,845)

(788,289)

Net current assets

 

2,774,581

2,384,046

Total assets less current liabilities

 

3,255,405

2,635,549

Creditors: Amounts falling due after more than one year

17

(48,652)

(109,783)

Provisions for liabilities

18

(68,381)

-

Net assets

 

3,138,372

2,525,766

Capital and reserves

 

Called up share capital

250,280

250,280

Share premium reserve

2,798

2,798

Capital redemption reserve

32,500

32,500

Retained earnings

2,852,794

2,240,188

Shareholders' funds

 

3,138,372

2,525,766

Approved and authorised by the Board on 20 October 2023 and signed on its behalf by:
 

.........................................
The Rt. Hon. H L A Hood
Director

.........................................
Mr J P Loescher
Director

 

Denhay Farms Limited

Statement of Changes in Equity for the Year Ended 31 March 2023

Share capital
£

Share premium
£

Capital redemption reserve
£

Profit and loss account
£

Total
£

At 1 April 2022

250,280

2,798

32,500

2,240,188

2,525,766

Profit for the year

-

-

-

612,606

612,606

Total comprehensive income

-

-

-

612,606

612,606

At 31 March 2023

250,280

2,798

32,500

2,852,794

3,138,372

Share capital
£

Share premium
£

Capital redemption reserve
£

Profit and loss account
£

Total
£

At 1 April 2021

250,280

2,798

32,500

2,640,639

2,926,217

Profit for the year

-

-

-

152,882

152,882

Total comprehensive income

-

-

-

152,882

152,882

Dividends

-

-

-

(553,333)

(553,333)

At 31 March 2022

250,280

2,798

32,500

2,240,188

2,525,766

 

Denhay Farms Limited

Statement of Cash Flows for the Year Ended 31 March 2023

Note

2023
 £

2022
 £

Cash flows from operating activities

Profit for the year

 

612,606

152,882

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

85,895

136,502

Profit on disposal of tangible assets

(81)

-

Profit from disposals of investments

(113,430)

-

Finance income

6

(7,255)

(53)

Finance costs

7

4,137

23,637

Income tax expense

11

102,746

145,015

 

684,618

457,983

Working capital adjustments

 

Decrease in stocks

14

93,071

923,627

(Increase)/decrease in trade debtors

15

(86,294)

664,615

Decrease in trade creditors

17

(39,853)

(683,197)

Decrease in deferred income, including government grants

 

-

(5,060)

Cash generated from operations

 

651,542

1,357,968

Income taxes received

11

29,985

-

Net cash flow from operating activities

 

681,527

1,357,968

Cash flows from investing activities

 

Interest received

6

7,185

-

Acquisitions of tangible assets

(315,741)

(14,544)

Proceeds from sale of tangible assets

 

550

1,510,098

Proceeds from sale of investments

 

113,486

101

Dividend income

6

70

53

Net cash flows from investing activities

 

(194,450)

1,495,708

Cash flows from financing activities

 

Interest paid

7

(4,137)

(23,637)

Repayment of bank borrowing

 

(43,333)

(278,248)

Payments to finance lease creditors

 

(26,754)

(281,798)

Dividends paid

23

-

(553,333)

Net cash flows from financing activities

 

(74,224)

(1,137,016)

Net increase in cash and cash equivalents

 

412,853

1,716,660

Cash and cash equivalents at 1 April

 

1,759,240

42,580

Cash and cash equivalents at 31 March

16

2,172,093

1,759,240

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
The Paragon
Counterslip
Bristol
Avon
BS1 6BX

The principal place of business is:
Devonshire Road
Heath Park
Honiton
Devon
EX14 1SD

These financial statements were authorised for issue by the Board on 20 October 2023.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The company's functional and presentational currency is Sterling (£). All amounts have been rounded to the nearest £.

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Judgements

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical accounting judgements and Key sources of estimation uncertainty

In preparing these financial statements, the directors have made the following judgements and estimates:

Depreciation rates
Tangible fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining useful life of the asset and projected disposal values. The carrying amount of fixed assets can be seen in the note headed Tangible assets below.

Deferred tax assets
The inclusion of deferred tax assets, either to recognise as a debtor or to set off against a deferred tax liability requires the use of estimates as to the likely recoverable value of tax losses. The ultimate realisation of deferred tax assets is also dependent upon the generation of future taxable profits against which those tax losses can be utilised. The carrying amount of deferred tax assets can be seen in the note headed Taxation below.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when goods are received by the customer, as determined by the terms agreed in the contract.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in other operating income over the period in which the related costs are recognised, and timing differences are presented as other creditors or deferred income within the balance sheet.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

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

Deferred tax is measured using 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.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Tenant improvements post 2003

Over 15 years on a straight line basis

Plant and machinery

25% on a reducing balance basis

Computer equipment

Over 3 years on a straight line basis

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.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. 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.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Trade creditors

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 creditor 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 are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

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 costs, 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 expense is recognised 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.

Leases

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

Share capital

Ordinary and preference shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

The Company contributes to two defined contribution pension schemes. The assets of the schemes are held separately from those of the Company within independently administered insurance funds. Contributions in respect of these schemes are charged to the Profit and Loss Account in the year in which they are payable to the schemes.

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Discontinued operations

Denhay Farms Limited withdrew from dairy farming activities during the comparative accounting period. In these financial statements, the results from dairy farming are shown as discontinued operations in both the current and comparative columns.

3

Turnover

The analysis of the company's revenue for the year is as follows:

2023
 £

2022
 £

Sale of goods

7,161,806

8,093,354

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
 £

2022
 £

Government grants

10,405

5,060

Sub lease rental income

-

48,829

10,405

53,889

5

Operating profit

Arrived at after charging/(crediting)

2023
 £

2022
 £

Depreciation expense

85,895

136,502

Operating lease expense - property

62,000

62,000

(Profit)/loss on disposal of property, plant and equipment

(81)

17,346

6

Other interest receivable and similar income

2023
 £

2022
 £

Interest income on bank deposits

7,136

-

Dividend income

70

53

Other finance income

49

-

7,255

53

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

7

Interest payable and similar expenses

2023
 £

2022
 £

Interest on bank overdrafts and borrowings

785

4,596

Interest on obligations under finance leases and hire purchase contracts

3,352

7,753

Interest expense on other finance liabilities

-

11,288

4,137

23,637

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

1,144,799

1,413,677

Social security costs

111,725

115,824

Pension costs, defined contribution scheme

42,051

53,819

1,298,575

1,583,320

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

34

37

Administration and support

7

8

41

45

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
 £

2022
 £

Remuneration

140,775

132,063

Contributions paid to money purchase schemes

-

8,700

140,775

140,763

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
 No.

2022
 No.

Accruing benefits under money purchase pension scheme

1

1

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

10

Auditors' remuneration

2023
 £

2022
 £

Audit of the financial statements

19,405

16,115

Other fees to auditors

All other non-audit services

5,895

5,610


 

11

Taxation

Tax charged/(credited) in the income statement

2023
 £

2022
 £

Current taxation

UK corporation tax

1,365

-

UK corporation tax adjustment to prior periods

-

(29,985)

1,365

(29,985)

Deferred taxation

Arising from origination and reversal of timing differences

101,381

175,000

Tax expense in the income statement

102,746

145,015

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 19% (2022 - 19%).

The differences are reconciled below:

2023
 £

2022
 £

Profit before tax

715,352

297,897

Corporation tax at standard rate

135,917

56,600

Effect of tax losses

(75,944)

(225,526)

Deferred tax expense (credit) from unrecognised tax loss or credit

101,381

175,000

Increase (decrease) in UK and foreign current tax from adjustment for prior periods

-

(29,985)

Tax increase (decrease) from effect of capital allowances and depreciation

(58,595)

168,926

Tax increase (decrease) from effect of dividends from UK companies

(13)

-

Total tax charge

102,746

145,015

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Tax losses carried forward

-

44,183

Accelerated tax depreciation

-

(112,564)

-

(68,381)

2022

Asset
£

Liability
£

Tax losses carried forward

90,000

-

Accelerated tax depreciation

(57,000)

-

33,000

-

12

Tangible assets

Tenant improvements
£

Computer equipment
 £

Plant and machinery
 £

Total
£

Cost or valuation

At 1 April 2022

363,074

50,877

1,929,583

2,343,534

Additions

12,148

1,296

302,297

315,741

Disposals

-

(699)

(51,053)

(51,752)

At 31 March 2023

375,222

51,474

2,180,827

2,607,523

Depreciation

At 1 April 2022

342,056

40,678

1,709,353

2,092,087

Charge for the year

3,942

5,205

76,748

85,895

Eliminated on disposal

-

(699)

(50,584)

(51,283)

At 31 March 2023

345,998

45,184

1,735,517

2,126,699

Carrying amount

At 31 March 2023

29,224

6,290

445,310

480,824

At 31 March 2022

21,018

10,199

220,230

251,447

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2023
£

2022
£

Plant and machinery

75,059

100,078

     
 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

13

Other financial assets (current and non-current)

Financial assets at cost less impairment
£

Total
£

Non-current financial assets

Cost or valuation

At 1 April 2022

56

56

Disposals

(56)

(56)

At 31 March 2023

-

-

Impairment

At 1 April 2022

-

-

At 31 March 2023

-

-

Carrying amount

At 31 March 2023

-

-

At 31 March 2022

56

56

14

Stocks

2023
 £

2022
 £

Raw materials and consumables

122,895

127,308

Work in progress

131,411

122,421

Finished goods and goods for resale

151,445

249,093

405,751

498,822

15

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

761,329

657,759

Other debtors

 

34,921

57,663

Prepayments

 

141,332

135,866

Deferred tax assets

11

-

33,000

Income tax asset

11

-

29,985

   

937,582

914,273

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

16

Cash and cash equivalents

2023
 £

2022
 £

Cash on hand

367

347

Cash at bank

441,726

1,758,893

Short-term deposits

1,730,000

-

2,172,093

1,759,240

17

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

21

27,798

36,754

Trade creditors

 

476,658

405,254

Social security and other taxes

 

27,273

18,326

Other payables

 

-

48,994

Accrued expenses

 

207,751

278,961

Corporation tax liability

11

1,365

-

 

740,845

788,289

Due after one year

 

Loans and borrowings

21

48,652

109,783

18

Provisions for liabilities

Deferred tax
£

Total
£

At 1 April 2022

-

-

Increase (decrease) in existing provisions

68,381

68,381

At 31 March 2023

68,381

68,381

19

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £42,051 (2022 - £53,819).

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

20

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary of £1 each

237,780

237,780

237,780

237,780

Preference of £1 each

12,500

12,500

12,500

12,500

 

250,280

250,280

250,280

250,280

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
Each ordinary share is entitled to one vote at meetings of the company, entitled to participate in a winding up of the company and entitled to dividends as declared from time to time, The ordinary shares are not redeemable.

Preference shares have the following rights, preferences and restrictions:
Each preference share is entitled to a 4.2% non-cumulative dividend, The preference shares carry no voting rights and are not redeemable.

21

Loans and borrowings

2023
 £

2022
 £

Non-current loans and borrowings

Bank borrowings

-

33,333

HP and finance lease liabilities

48,652

76,450

48,652

109,783

2023
 £

2022
 £

Current loans and borrowings

Bank borrowings

-

10,000

HP and finance lease liabilities

27,798

26,754

27,798

36,754

HP and finance lease liabilities are secured on the assets to which they relate.

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

22

Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

27,798

26,754

Later than one year and not later than five years

48,652

76,450

76,450

103,204

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

78,380

78,380

Later than one year and not later than five years

295,840

312,220

Later than five years

108,500

170,500

482,720

561,100

The amount of non-cancellable operating lease payments recognised as an expense during the year was £78,380 (2022 - £78,380).

23

Dividends

Interim dividends paid

   

2023
£

 

2022
£

Interim dividend of £Nil (2022 - £2.3271) per each Ordinary share

 

-

 

553,333

         

24

Commitments

Capital commitments

At 31 March, the company had contracts for future capital expenditure in respect of Property, plant and equipment.

The total amount contracted for but not provided in the financial statements was £Nil (2022 - £249,084).

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

25

Related party transactions

Transactions with directors

2023

At 1 April 2022
£

Repayments by director
£

At 31 March 2023
£

Mr S J Streatfeild

Director's current account

22,832

(22,832)

-

       

2022

At 1 April 2021
£

Advances to director
£

Repayments by director
£

At 31 March 2022
£

Mr S J Streatfeild

Director's current account

-

162,832

(140,000)

22,832

         
       

 

Other transactions with directors

During the year the following rents were paid to directors in respect of land used by the company: Mr G H Streatfeild, £Nil (2022 - £12,563) and Mr S J Streatfeild £Nil (2022 - £4,269).

During the year the following interest charges were paid to directors in respect of unsecured loans advanced to the company: Mr G H Streatfeild £Nil (2022 - £6,987), The Rt. Hon. H L A Hood £Nil (2022 - £1,075) and The Hon. J S Hood £Nil (2022 - £1,075).

Summary of transactions with other related parties

During the year the following rents were paid to other related parties in respect of land used by the company: Penntrust Limited as trustees of the Hood 1958 Settlement £nil (2022 - £22,400).

During the year the following interest charges were paid to other related parties in respect of unsecured loans advanced to the company: Penntrust Limited as trustees of the Hood 1958 Settlement £nil (2022 - £2,151).

 

Denhay Farms Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

26

Analysis of changes in net debt

At 1 April 2022
£

Financing cash flows
£

At 31 March 2023
£

Cash and cash equivalents

Cash

1,759,240

(1,317,147)

442,093

Cash equivalents

-

1,730,000

1,730,000

1,759,240

412,853

2,172,093

Borrowings

Short term borrowings

(43,333)

43,333

-

Lease liabilities

(103,204)

26,754

(76,450)

(146,537)

70,087

(76,450)

 

1,612,703

482,940

2,095,643