Registered number:
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
COMPANY INFORMATION
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DOVES FARM FOODS LIMITED
CONTENTS
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DOVES FARM FOODS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
Doves Farm Foods remains an independent, family run, food manufacturing company focusing on the processing of speciality grain and cereal products with a high level of product integrity, that are sold both as ingredients to food manufacturers and as consumer foods. Doves Farm Foods holds accreditation from British Retail Consortium, Sedex, Soil Association Organic, Coeliac, and Kosher and Halal societies.
Financial security is based upon product profitability to generate surplus cash profits for financing new buildings and production machinery, structural alterations and possible company acquisitions. We have managed to avoid needing any type of loans in the UK, however there is a bank loan facility in Italy which was obtained to assist with financing the capital expenditure locally.
A large range of organic and speciality, flours continue to be sold under DOVES FARM brand which was established in 1978. These are complimented by some baking requisites and biscuits. We have considerable capacity to produce and pack home baking flours.
The company’s gluten free products are sold under the FREEE brand name. This enables consumers to easily identify products that are suitable for those who wish to eat gluten free foods, as opposed to other products made by the company which do contain gluten. FREEE home baking flours, cookies, breakfast cereals and oat bars are produced and packed in the companies dedicated purpose-built facility using specialist milling, blending and baking equipment. The company’s websites are regularly updated and on-line sales, have remained strong. The company sells products mainly in the UK, with 9% of its sales going for the export trade. The Brexit regulations have proved quite challenging and this has affected our overseas sales but the new arrangements are now settling down and overseas buyers are returning. The sourcing and supply chain of all our raw materials and packaging continues to be fundamental to the business activity and profitability. Since the invasion of Ukraine raw material pricing and transport costs had increased dramatically, these ingredient increases along with higher energy costs caused a severe strain on our margins during this year; this forced us to increase prices to the customers and this improved our situation towards the end of the year. We have an excellent senior management team of high calibre who are ambitious to grow the business and general staff turnover is very low. There is a strong personnel culture throughout the company. G Free Alimentare Doves Farm Foods continues to invest as the major shareholder in G-Free Alimentaire (GFA), a new gluten free pasta factory near to Milan in Italy. This venture has had quite a few delays and setbacks and the costs have increased over the initial forecast, which has forced DFF to loan additional funds to GFA to complete the building and equipping of the pasta factory. As at 30 June 2023 the loan amounted to £2,063,399. Following an assessment at the year end, we anticipate that full repayment of this loan might be doubtful, or will take a number of years, so we have deemed it prudent to provide against this loan in the results of DFF. During the 2023-24 year DFF has had to loan further amounts to GFA. The GFA factory is now very nearly complete, and we started to sell pasta at the end of 2023. This factory now supplies DFF with the pasta that it had been buying from a third party supplier, and it will also sell to other customers in Italy and other countries.
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DOVES FARM FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Wessex Mill
In January 2023 DFF bought the brand, Wessex Mill. The company behind Wessex Mill decided to cease trading. They were a traditional country flour mill supplying bakers and making a range of home baking flours. Wessex supplies a range of different customers to the Doves Farm brand. This has been a good integration of another brand to our portfolio, and extends our reach into new areas. The Wessex brand has its own website and internet shop.
The UK flour milling industry is a most competitive environment and pricing control from multiple retail customers ensures that margins are kept under pressure. Some ingredients are sourced from the EU and some sales are to the EU; UK/EU customs changes have affected this trade. The Euro to Sterling exchange rate was smoother this year which helped with pricing.
There is a constant risk of allergen challenges to raw material ingredient integrity both upstream and downstream.
The Company uses KPI’s to monitor its own activities including turnover and margin growth. Debtor days are monitored and continue to come in within target.
Production, technical, environmental, engineering, HR and Health and Safety are all monitored by KPIs. The number of complaints received per thousand units sold has again improved, from an already very low number, and showing the continuing quality of our products.
This report was approved by the board and signed on its behalf.
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DOVES FARM FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The directors present their report and the financial statements for the year ended 30 June 2023.
The directors who served during the year were:
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £207,470 (2022 - £549,189).
Dividends of £200,800 (2022: £499,200) were paid during the year.
The company continues to invest in growing the sales of all products through product development, modern marketing techniques and social platforms.
Despite the Brexit challenges, overseas interest in the company’s brands remains strong. We plan to develop the export opportunities for both Doves Farm and Freee branded products.
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DOVES FARM FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
There have been no post balance sheet events which require disclosure.
The auditor, James Cowper Kreston Audit, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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DOVES FARM FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DOVES FARM FOODS LIMITED
We have audited the financial statements of Doves Farm Foods Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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).
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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 or the 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.
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.
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DOVES FARM FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DOVES FARM FOODS LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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 Group financial statements.
Because of the inherent limitations of an audit, there is risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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DOVES FARM FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DOVES FARM FOODS LIMITED (CONTINUED)
The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
· Enquiry of management and those charged with governance around actual and potential litigation and claims; · Enquiry of management and those charged with governance to identify any material instances of non- compliance with laws and regulations; · Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; · Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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.
for and on behalf of
Senior Statutory Auditor
2 Communications Road
Greenham Business Park
Greenham
Berkshire
RG19 6AB
Date:
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DOVES FARM FOODS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
REGISTERED NUMBER: 02301391
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 33 form part of these financial statements.
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DOVES FARM FOODS LIMITED
REGISTERED NUMBER: 02301391
COMPANY BALANCE SHEET
AS AT 30 JUNE 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 33 form part of these financial statements.
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DOVES FARM FOODS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
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DOVES FARM FOODS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
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DOVES FARM FOODS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Doves Farm Food Limited is a company limited by share capital and incorporated in England and Wales. The address of the registered office and principal place of business is Salisbury Road, Hungerford, Berkshire, RG17 0RF. The nature of the operations and principal activities are described in the business review.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the methods noted below..
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Research and development expenditure is written off to the profit and loss account.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
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, with 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Revenue The key judgment made by management in respect of revenue is the point at which that revenue should be recognised. Management consider that revenue is to be recognised when delivery is made to customers as this is when the risk and rewards are transferred. Tangible fixed assets 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. Operating lease commitments The company has entered into commercial lease contracts and as a lessee it obtains use of property, plant and equipment. The classification of such leases as operating or finance lease requires the Company to determine, based on evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the Balance Sheet.
Analysis of turnover by country of destination:
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
9.Taxation (continued)
The main rate of corporation tax increased from 19% to 25% on 1 April 2023. While there is no material impact on 2023, the company expects its future corporation tax liability increase.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Assets held under finance leases or hire purchase contracts are secured against the relevant liability.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
12.Tangible fixed assets (continued)
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Obligations under finance lease and hire purchase contracts of £355,485 (2022: £314,695) are secured against the assets to which they relate.
See note 19 for further details of the bank loan.
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Non-controlling interests
Profit and loss account
During the year a prior year adjustment was recognised to reflect the fair value of forward contracts outstanding as at 30 June 2022. The impact of this prior year adjustment is to decrease profit by £22,865, increase current assets by £2,134,341 and increase current liabilities by £2,125,276.
The comparative figures have also been restated to correctly show the repayment of bank loans and HP liabilities in the periods to which they relate. This has led to 2022 current liabilities decreasing by £1,161,594 and 2022 non-current liabilities increasing by the same amount. There is no impact on 2022 net assets or profit for the year.
The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £80,648 (2022: £293,649). Pension contributions amounting to £10,959 were outstanding at 30 June 2023 (2022: £9,880).
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DOVES FARM FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
27.Related party transactions
During the year, the company occupied land and buildings owned by the directors to whom £55,000 (2022: £55,000) rent was paid. M J Marriage was paid a dividend in the year of £65,600 (2022: £92,800), C E Marriage was paid a dividend in the year of £59,200 (2022: £38,400), J J Marriage was paid a dividend in the year of £8,000 (2022: £28,000) and R N L Marriage was paid a dividend in the year of £8,000 (2022: £28,000). One other family shareholder received dividends of £60,000 in total (2022: £288,000), meaning that the total dividends paid to shareholders were £200,800 (2022: £499,200). At the year end, a trust, controlled by the directors, was due royalty payments of £32,422 (2022: £28,525 due to the directors) from the company for the use of trademarks, included in other creditors. Key management remuneration related to directors and the senior management team of £404,800 (2022: £411,904) was paid during the year.
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