NORVITE ANIMAL NUTRITION COMPANY LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
MHA
12 CARDEN PLACE
ABERDEEN
AB10 1UR
NORVITE ANIMAL NUTRITION COMPANY LIMITED
COMPANY INFORMATION
Directors
Mr Edward Smith
Mr David McClelland
Mrs Lorna Smith
Ms Claire King
Secretary
Mackinnons Solicitors
Company number
SC281433
Registered office
Wardhouse
Insch
Aberdeenshire
AB52 6YD
Auditor
MHA
Aberdeen
United Kingdom
Solicitors
Mackinnons Solicitors
14 Carden Place
Aberdeen
AB10 1 UR
NORVITE ANIMAL NUTRITION COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 33
NORVITE ANIMAL NUTRITION COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

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

 

Norvite Animal Nutrition Company Limited is involved in the manufacture and supply of animal feed supplements, complete feeds and associated products. The company also has 3 ‘Farm and Country’ retail outlets across Aberdeenshire and an e-commerce site providing quality products for pets, horses and other livestock. The company is committed to local manufacture and providing the best quality products and services for our customers.

Review of the business

During the year our turnover increased by 8.4% to £19,864,915 (2022 £18,303,355) and our pre-tax profit was £298,755 (2022 £591,578). The increase in turnover was driven by an increase in manufactured and trading volumes and a rise in commodity prices. Our ongoing efforts to optimise processes and technology including a significant investment in automated packing at our Wardhouse mineral plant have helped to reduce the unit cost we have seen in prior years and increase our productivity.

 

The year to May 2023 has been challenging. Having navigated the global COVID-19 pandemic over the previous two years we entered a period of rapidly rising inflation and record high commodity prices driven largely by the Ukraine war. Fuel, power and interest rates rapidly drove up overheads and we reacted to the huge increase in living costs for our staff with a substantial rise in rates of pay across the business.

 

The commodity price spikes had a serious effect on several of the markets we supply - particularly the pig and poultry industries which are reliant on grain and soya, both of which reached record levels in a matter of months following the Russian invasion of Ukraine. Profitability and cash flow in these sectors was particularly hard hit and will take a long time to recover, which thankfully was beginning to happen by the end of the financial year.

 

Supply chains began to repair over the year and our emphasis on using local products meant our standard practice of working closely with suppliers enabled us to manage stocks carefully and ensure customers were not impacted.

 

In April 2023 we acquired the entire share capital of Trustach Shooting Supplies Ltd. The directors feel this business compliments very well our retail offering and opens a new market across the UK as well as being able to offer our rural customer base an additional range of products. In addition, we further invested in our infrastructure with a dedicated retail warehouse at our Insch premises.

 

The net assets of the group have increased from £1,847,149 to £2,114,934 in the year.

 

The directors monitor performance using key performance indicators. The main indicators for the business are turnover and profit before tax. Performance of these indicators is in line with expectations and are as disclosed above.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Principal risks and uncertainties

The global supply chain shortages and high levels of inflation are contributing to a challenging work environment. We consider our internal communication and management processes to be robust and capable of adapting to fast evolving situations, ensuring that we remain in a position of strength going forward.

 

A key element of our business is that we source as many of our raw materials locally as possible so the level of imported goods is minimal. At the time of this report the agriculture bill, which will affect the future of farming post EU membership, is still going through parliament and we are monitoring the progress closely.

 

The animal feed industry is a very competitive environment and volatile raw materials prices and competition can make it unpredictable. The directors attempt to lessen this risk by utilising contract prices to help reduce exposure to short term fluctuations and continuing to develop innovative new products and provide a high quality product and superior service to our customers.

 

Health, Safety and Quality Control are important factors for day to day operations and the company complies with a number of accreditations to ensure any risks are managed effectively. The company also employs IT systems and support to maintain the security of the ERP on which the smooth functioning of the business relies and a significant further investment in a new ERP is planned for the year ahead.

 

The directors seek to minimise financial risks using a number of different measures. These include preparing profit forecasts and regularly monitoring the actual performance against those forecasts. Cash management can be a challenge in this industry and the directors work to ensure we have financing in place to meet the needs of the business and also manage any potential credit control risk through its robust credit control processes.

Development and performance

The directors are always open to improvements and future developments.

On behalf of the board

Mr Edward Smith
Director
21 December 2023
NORVITE ANIMAL NUTRITION COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

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

Principal activities

The principal activity of the group continued to be that of manufacturing and supplying of animal feed supplements, complete feed and associated products.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr Edward Smith
Mr David McClelland
Mrs Lorna Smith
Ms Claire King
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and financial risks.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr Edward Smith
Director
21 December 2023
NORVITE ANIMAL NUTRITION COMPANY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 4 -

The directors are responsible 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NORVITE ANIMAL NUTRITION COMPANY LIMITED
- 5 -
Opinion

We have audited the financial statements of Norvite Animal Nutrition Company Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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:

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 group and parent 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 group's and parent 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 our audit:

NORVITE ANIMAL NUTRITION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NORVITE ANIMAL NUTRITION COMPANY LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. 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 frameworks that are applicable to the group, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frame works we identified include:

 

NORVITE ANIMAL NUTRITION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NORVITE ANIMAL NUTRITION COMPANY LIMITED
- 7 -

We gained an understanding of how the group is complying with these laws and regulations by making enquiries of management. We corroborated these enquiries through our review of submitted returns, external inspections and relevant correspondence with regulatory bodies. We have reviewed evidence of relevant accreditations held.

 

We assessed the susceptibility of the group's financial statements to material misstatement, whether due to fraud or error, by meeting with management to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk.

 

The following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

 

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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

Mark Brown BA CA (Senior Statutory Auditor)
For and on behalf of MHA
Statutory Auditor
Aberdeen
United Kingdom
21 December 2023
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership based in England and Wales (registered number OC312313).
NORVITE ANIMAL NUTRITION COMPANY LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
19,846,914
18,303,355
Cost of sales
(16,182,940)
(14,718,137)
Gross profit
3,663,974
3,585,218
Administrative expenses
(3,343,723)
(2,973,409)
Operating profit
4
320,251
611,809
Interest receivable and similar income
38,435
15,969
Interest payable and similar expenses
8
(59,931)
(36,200)
Profit before taxation
298,755
591,578
Tax on profit
9
(31,010)
(43,849)
Profit for the financial year
23
267,745
547,729
Profit for the financial year is all attributable to the owners of the parent company.
NORVITE ANIMAL NUTRITION COMPANY LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
2023
2022
£
£
Profit for the year
267,745
547,729
Other comprehensive income
-
-
Total comprehensive income for the year
267,745
547,729
Total comprehensive income for the year is all attributable to the owners of the parent company.
NORVITE ANIMAL NUTRITION COMPANY LIMITED
GROUP BALANCE SHEET
AS AT
31 MAY 2023
31 May 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
200,285
-
0
Tangible assets
11
1,660,184
1,581,411
1,860,469
1,581,411
Current assets
Stocks
14
2,297,500
2,035,804
Debtors
15
2,534,814
2,457,087
Cash at bank and in hand
410,777
393,774
5,243,091
4,886,665
Creditors: amounts falling due within one year
16
(4,039,971)
(3,583,592)
Net current assets
1,203,120
1,303,073
Total assets less current liabilities
3,063,589
2,884,484
Creditors: amounts falling due after more than one year
17
(802,949)
(832,988)
Provisions for liabilities
Deferred tax liability
20
145,706
204,307
(145,706)
(204,307)
Net assets
2,114,934
1,847,189
Capital and reserves
Called up share capital
22
100
100
Share premium account
23
99,998
99,998
Profit and loss reserves
23
2,014,836
1,747,091
Total equity
2,114,934
1,847,189

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 21 December 2023 and are signed on its behalf by:
21 December 2023
Mr Edward Smith
Director
Company registration number SC281433 (Scotland)
NORVITE ANIMAL NUTRITION COMPANY LIMITED
COMPANY BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
200,000
-
0
Tangible assets
11
1,660,184
1,581,411
Investments
12
-
0
21,003
1,860,184
1,602,414
Current assets
Stocks
14
2,297,500
2,035,804
Debtors
15
2,552,079
2,457,087
Cash at bank and in hand
395,985
360,267
5,245,564
4,853,158
Creditors: amounts falling due within one year
16
(4,032,848)
(3,598,229)
Net current assets
1,212,716
1,254,929
Total assets less current liabilities
3,072,900
2,857,343
Creditors: amounts falling due after more than one year
17
(802,949)
(832,988)
Provisions for liabilities
Deferred tax liability
20
145,706
204,307
(145,706)
(204,307)
Net assets
2,124,245
1,820,048
Capital and reserves
Called up share capital
22
100
100
Share premium account
23
99,998
99,998
Profit and loss reserves
23
2,024,147
1,719,950
Total equity
2,124,245
1,820,048

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £304,197 (2022 - £520,588 profit).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 21 December 2023 and are signed on its behalf by:
21 December 2023
Mr Edward Smith
Director
Company registration number SC281433 (Scotland)
NORVITE ANIMAL NUTRITION COMPANY LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 June 2021
100
99,998
1,199,362
1,299,460
Year ended 31 May 2022:
Profit and total comprehensive income
-
-
547,729
547,729
Balance at 31 May 2022
100
99,998
1,747,091
1,847,189
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
267,745
267,745
Balance at 31 May 2023
100
99,998
2,014,836
2,114,934
NORVITE ANIMAL NUTRITION COMPANY LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 June 2021
100
99,998
1,199,362
1,299,460
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
-
520,588
520,588
Balance at 31 May 2022
100
99,998
1,719,950
1,820,048
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
304,197
304,197
Balance at 31 May 2023
100
99,998
2,024,147
2,124,245
NORVITE ANIMAL NUTRITION COMPANY LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
737,231
243,276
Interest paid
(59,931)
(36,200)
Income taxes paid
(39,406)
(122,385)
Net cash inflow from operating activities
637,894
84,691
Investing activities
Purchase of intangible assets
(206,952)
-
Purchase of tangible fixed assets
(386,990)
(411,831)
Proceeds from disposal of tangible fixed assets
5,001
20,218
Proceeds from disposal of subsidiaries, net of cash disposed
(21,003)
-
Proceeds from disposal of investments
21,003
-
Interest received
38,435
15,969
Net cash used in investing activities
(550,506)
(375,644)
Financing activities
Repayment of borrowings
(57,960)
407,726
Proceeds from new bank loans
180,298
300,000
Repayment of bank loans
(127,670)
(148,152)
Payment of finance leases obligations
(66,461)
(83,706)
Net cash (used in)/generated from financing activities
(71,793)
475,868
Net increase in cash and cash equivalents
15,595
184,915
Cash and cash equivalents at beginning of year
393,275
208,360
Cash and cash equivalents at end of year
408,870
393,275
Relating to:
Cash at bank and in hand
410,777
393,774
Bank overdrafts included in creditors payable within one year
(1,907)
(499)
NORVITE ANIMAL NUTRITION COMPANY LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
714,173
209,769
Interest paid
(59,931)
(36,200)
Income taxes paid
(31,585)
(122,385)
Net cash inflow from operating activities
622,657
51,184
Investing activities
Purchase of intangible assets
(200,000)
-
0
Purchase of tangible fixed assets
(386,990)
(411,831)
Proceeds from disposal of tangible fixed assets
5,001
20,218
Interest received
38,435
15,969
Dividends received
27,000
-
0
Net cash used in investing activities
(516,554)
(375,644)
Financing activities
Repayment of borrowings
(57,960)
407,726
Repayment of bank loans
52,628
151,848
Payment of finance leases obligations
(66,461)
(83,706)
Net cash (used in)/generated from financing activities
(71,793)
475,868
Net increase in cash and cash equivalents
34,310
151,408
Cash and cash equivalents at beginning of year
359,768
208,360
Cash and cash equivalents at end of year
394,078
359,768
Relating to:
Cash at bank and in hand
395,985
360,267
Bank overdrafts included in creditors payable within one year
(1,907)
(499)
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 16 -
1
Accounting policies
Company information

Norvite Animal Nutrition Company Ltd ("the company") is a private limited company domiciled and incorporated in Scotland. The registered office is Wardhouse, Insch, Aberdeenshire, AB52 6YD.

 

The group consists of Norvite Animal Nutrition Company Ltd and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Norvite Animal Nutrition Company Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 May 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

The directors have considered forecast financial performance for a period of at least 12 months from the date of signing the financial statements. Taking account of this, the debt facilities currently available to the company, and those expected to be available in future, the directors have a reasonable expectation that the company will be able to meet its liabilities as they fall due for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
5-20% straight line
Leasehold improvements
5-20% straight line
Plant and equipment
5-33% straight line
Fixtures and fittings
5-33% straight line
Motor vehicles
20-33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 19 -
1.12
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 20 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 21 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.18
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.19

Factored debts

The company have a debt factoring agreement in place with the bank. Due to the nature of the agreement, the risks and rewards are still retained with the company and therefore, under FRS 102, separate presentation is appropriate.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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 judgements

The directors consider that there are no judgements, estimates and underlying assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of Norvite Products
13,953,283
12,016,116
Sales of Traded Products
5,893,631
6,287,239
19,846,914
18,303,355
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
19,846,914
18,303,355
2023
2022
£
£
Other revenue
Interest income
38,435
15,969
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses
2,418
437
Depreciation of owned tangible fixed assets
175,402
228,032
Depreciation of tangible fixed assets held under finance leases
128,481
69,553
Profit on disposal of tangible fixed assets
(667)
(20,218)
Amortisation of intangible assets
6,667
-
Operating lease charges
384,732
374,086
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 23 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
17,500
14,000
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Production and distribution
10
10
10
10
Sales, administration and management
63
56
63
56
Total
73
66
73
66

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,696,408
1,639,745
1,696,408
1,639,745
Social security costs
170,432
166,198
170,432
166,198
Pension costs
73,302
71,484
73,302
71,484
1,940,142
1,877,427
1,940,142
1,877,427
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
274,204
297,328
Company pension contributions to defined contribution schemes
23,460
21,166
297,664
318,494
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
90,000
94,637
Company pension contributions to defined contribution schemes
7,200
7,200
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
36,576
12,521
Other finance costs:
Interest on finance leases and hire purchase contracts
23,355
23,679
Total finance costs
59,931
36,200
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
94,111
92,994
Adjustments in respect of prior periods
(4,500)
(48,474)
Total current tax
89,611
44,520
Deferred tax
Origination and reversal of timing differences
(58,601)
(23,679)
Adjustment in respect of prior periods
-
0
23,008
Total deferred tax
(58,601)
(671)
Total tax charge
31,010
43,849

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
298,755
591,578
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
59,751
112,400
Tax effect of expenses that are not deductible in determining taxable profit
67,801
6,383
Tax effect of income not taxable in determining taxable profit
(5,401)
-
0
Unutilised tax losses carried forward
5,957
-
0
Adjustments in respect of prior years
(4,500)
(48,474)
Permanent capital allowances in excess of depreciation
(33,997)
-
0
Deferred tax adjustments in respect of prior years
(58,601)
23,008
Fixed asset differences
-
0
11,473
Remeasurement of deferred tax for changes
-
0
(5,685)
Additional deduction for R&D expenditure
-
0
(55,256)
Taxation charge
31,010
43,849
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 June 2022
-
0
Additions
206,952
At 31 May 2023
206,952
Amortisation and impairment
At 1 June 2022
-
0
Amortisation charged for the year
6,667
At 31 May 2023
6,667
Carrying amount
At 31 May 2023
200,285
At 31 May 2022
-
0
Company
Goodwill
£
Cost
At 1 June 2022
-
0
Additions
200,000
At 31 May 2023
200,000
Amortisation and impairment
At 1 June 2022 and 31 May 2023
-
0
Carrying amount
At 31 May 2023
200,000
At 31 May 2022
-
0
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 26 -
11
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2022
1,080,712
1,001,317
2,083,358
183,877
160,145
4,509,409
Additions
192,439
18,891
77,295
4,965
93,400
386,990
Disposals
-
0
-
0
(5,001)
-
0
-
0
(5,001)
At 31 May 2023
1,273,151
1,020,208
2,155,652
188,842
253,545
4,891,398
Depreciation and impairment
At 1 June 2022
870,224
560,924
1,268,916
142,314
85,620
2,927,998
Depreciation charged in the year
39,124
47,388
164,049
13,915
39,407
303,883
Eliminated in respect of disposals
-
0
-
0
(667)
-
0
-
0
(667)
At 31 May 2023
909,348
608,312
1,432,298
156,229
125,027
3,231,214
Carrying amount
At 31 May 2023
363,803
411,896
723,354
32,613
128,518
1,660,184
At 31 May 2022
210,488
440,393
814,442
41,563
74,525
1,581,411
Company
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2022
1,080,712
1,001,317
2,083,358
183,877
160,145
4,509,409
Additions
192,439
18,891
77,295
4,965
93,400
386,990
Disposals
-
0
-
0
(5,001)
-
0
-
0
(5,001)
At 31 May 2023
1,273,151
1,020,208
2,155,652
188,842
253,545
4,891,398
Depreciation and impairment
At 1 June 2022
870,224
560,924
1,268,916
142,314
85,620
2,927,998
Depreciation charged in the year
39,124
47,388
164,049
13,915
39,407
303,883
Eliminated in respect of disposals
-
0
-
0
(667)
-
0
-
0
(667)
At 31 May 2023
909,348
608,312
1,432,298
156,229
125,027
3,231,214
Carrying amount
At 31 May 2023
363,803
411,896
723,354
32,613
128,518
1,660,184
At 31 May 2022
210,488
440,393
814,442
41,563
74,525
1,581,411
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
11
Tangible fixed assets
(Continued)
- 27 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
419,631
271,254
419,631
271,254
Motor vehicles
89,184
74,566
89,184
74,566
508,815
345,820
508,815
345,820
12
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
-
0
21,003

The investment in Aberdyke Limited ceased during the year on 30 July 2022.

Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2022
21,003
Disposals
(21,003)
At 31 May 2023
-
Carrying amount
At 31 May 2023
-
At 31 May 2022
21,003
13
Subsidiaries

Details of the company's subsidiaries at 31 May 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Trustach Shooting Supplies Limited
Wardhouse, Insch, Scotland, AB52 6YD
Ordinary
10.00

The group has taken advantage of exemptions in section 479A to 479C of the Companies Act 2006 meaning that its UK subsidiary is exempt from an audit.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 28 -
14
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
717,681
724,555
717,681
724,555
Finished goods and goods for resale
1,579,819
1,311,249
1,579,819
1,311,249
2,297,500
2,035,804
2,297,500
2,035,804
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,279,930
2,307,360
2,309,234
2,307,360
Corporation tax recoverable
26,885
-
0
25,430
-
0
Other debtors
171,094
97,520
160,510
97,520
Prepayments and accrued income
56,905
52,207
56,905
52,207
2,534,814
2,457,087
2,552,079
2,457,087
16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
18
192,719
184,328
192,719
184,328
Bills of exchange
18
1,291,582
1,349,542
1,291,582
1,349,542
Obligations under finance leases
19
134,476
125,253
134,476
125,253
Trade creditors
2,008,343
1,622,346
2,008,343
1,622,346
Amounts owed to group undertakings
-
0
-
0
-
0
21,003
Corporation tax payable
118,651
41,561
118,651
35,195
Other taxation and social security
39,270
41,504
39,270
41,504
Other creditors
96,775
13,719
89,652
13,719
Accruals and deferred income
158,155
205,339
158,155
205,339
4,039,971
3,583,592
4,032,848
3,598,229
17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
18
678,728
633,083
678,728
633,083
Obligations under finance leases
19
124,221
199,905
124,221
199,905
802,949
832,988
802,949
832,988
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 29 -
18
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
869,540
816,912
869,540
816,912
Bank overdrafts
1,907
499
1,907
499
Bills of exchange
1,291,582
1,349,542
1,291,582
1,349,542
2,163,029
2,166,953
2,163,029
2,166,953
Payable within one year
1,484,301
1,533,870
1,484,301
1,533,870
Payable after one year
678,728
633,083
678,728
633,083

Virgin Money UK Plc holds standard security over the properties, a floating charge over all assets and undertakings and assignation over the book debts.

The company has received loans totalling £1,255,000 between December 2015 and April 2023. The loans are repayable in equal monthly instalments over a period between 5 and 15 years. Interest is charged on the loans between 3% and 7% per annum over the bank's base rate, some at a fixed rate and some at a variable rate.

19
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
134,476
125,253
134,476
125,253
In two to five years
124,221
199,905
124,221
199,905
258,697
325,158
258,697
325,158

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 30 -
20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
170,153
205,795
Short term timing differences
(24,447)
(1,488)
145,706
204,307
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
170,153
205,795
Short term timing differences
(24,447)
(1,488)
145,706
204,307
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 June 2022
204,307
204,307
Credit to profit or loss
(58,601)
(58,601)
Liability at 31 May 2023
145,706
145,706

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
73,302
71,484

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separtely from those of the company in an independently administered fund.

 

The contributions outstanding of £12,321 to be paid at the year end (2022 - £11,223).

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 31 -
22
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
23
Reserves
Profit and loss reserves

The profit and loss reverse account represents the accumulated profits and losses for the period and prior periods, less distributions.

24
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
110,332
175,268
110,332
175,268
Between two and five years
44,555
131,274
44,555
131,274
154,887
306,542
154,887
306,542
25
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
274,204
282,954
Transactions with related parties

During the year the group entered into the following transactions with related parties:

NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
25
Related party transactions
(Continued)
- 32 -
2023
2022
£
£
Group
Director loan - due from director
114,017
63,040
Company
Director loan - due from director
114,017
63,040

Interest of £972 was charged on the loan and there is no fixed term of repayment.

Included within other debtors at the year end is a balance due to the company from Aberdyke Limited of £10,000, a former subsidiary.

26
Directors' transactions

Dividends totalling £0 (2022 - £0) were paid in the year in respect of shares held by the company's directors.

27
Controlling party

The directors regard the controlling party to be Edward Smith in the current and previous year.

28
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
267,745
547,729
Adjustments for:
Taxation charged
31,010
43,849
Finance costs
59,931
36,200
Investment income
(38,435)
(15,969)
Gain on disposal of tangible fixed assets
(667)
(20,218)
Amortisation and impairment of intangible assets
6,667
-
Depreciation and impairment of tangible fixed assets
303,883
297,585
Movements in working capital:
Increase in stocks
(261,696)
(403,729)
Increase in debtors
(50,842)
(570,924)
Increase in creditors
419,635
328,753
Cash generated from operations
737,231
243,276
NORVITE ANIMAL NUTRITION COMPANY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 33 -
29
Cash generated from operations - company
2023
2022
£
£
Profit for the year after tax
304,197
520,588
Adjustments for:
Taxation charged
31,010
37,483
Finance costs
59,931
36,200
Investment income
(65,435)
(15,969)
Gain on disposal of tangible fixed assets
(667)
(20,218)
Depreciation and impairment of tangible fixed assets
303,883
297,585
Other gains and losses
21,003
-
Movements in working capital:
Increase in stocks
(261,696)
(403,729)
Increase in debtors
(69,562)
(612,930)
Increase in creditors
391,509
370,759
Cash generated from operations
714,173
209,769
30
Analysis of changes in net debt - group
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
393,774
17,003
410,777
Bank overdrafts
(499)
(1,408)
(1,907)
393,275
15,595
408,870
Borrowings excluding overdrafts
(2,166,454)
5,332
(2,161,122)
Obligations under finance leases
(325,158)
66,461
(258,697)
(2,098,337)
87,388
(2,010,949)
31
Analysis of changes in net debt - company
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
360,267
35,718
395,985
Bank overdrafts
(499)
(1,408)
(1,907)
359,768
34,310
394,078
Borrowings excluding overdrafts
(2,166,454)
5,332
(2,161,122)
Obligations under finance leases
(325,158)
66,461
(258,697)
(2,131,844)
106,103
(2,025,741)
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