Company registration number 12205579 (England and Wales)
Family Tree Farms UK Limited
Annual report and financial statements
for the year ended 31 December 2023
Family Tree Farms UK Limited
Company information
Directors
Dominic Martinez
Andy Muxlow
Daniel Jackson
David Jackson
Rick Jackson
Company number
12205579
Registered office
Suite 1
Haddonsacre Business Centre
Evesham
England
WR11 8JJ
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Bankers
Barclays
Barclays House
Victoria Street
Douglas
Isle of Man
IM99 1AJ
Family Tree Farms UK Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
Family Tree Farms UK Limited
Strategic Report
for the year ended 31 December 2023
- 1 -

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

Fair review of the business

Premium exclusive genetics remain at the forefront of our strategic plan and we continue to invest in UK & EU based R&D projects to identify suitable genetic materials which comply with our business and customer premium specifications. We have had a successful 2023 trading period, despite problematic El Nino weather conditions effecting chiefly our Peruvian Blueberry plantation yields, however market conditions did drive significant price inflation for our crop which did compensate. Turnover has grown +23.3% vs. 2022 and we look forward to continued and significant growth in the coming years.

 

The directors remain optimistic for the future and as group we continue to make significant investments to further expand our Southern / Northern American & South African fruit plantations to satisfy our global customer demand for premium fruit.

 

We remain alert and conscious of the rising costs of labour, energy and growing fertiliser / substrates however we are committed to our group strategic plan and will continue to follow our path to best service our customer groups.

Principal risks and uncertainties

Family Tree Farms UK Limited operates in a highly competitive market, although its exclusive genetics do stand its fruit production ahead of its lead competition, many costs are influenced by factors out with the company's control and the challenge continues to remain competitively priced whilst providing the same level of service for which the company is renowned within its industry.

Development and performance

The company's continued growth and high standing within its industry is a direct result of its directors continued focus on quality, flavour and service to its customers. Our industry leading compliance of health, safety and food regulations is at heart of strategic plan and we work hard to ensure our fruit is produced as sustainably as possible. The directors believe that the company is well placed to meet available opportunities for further growth within its target markets as and when they arise.

Key performance indicators

The directors consider the company's key performance indicators to be those that communicate the financial performance of the company as a whole, being turnover, gross margin and net loss before taxation.

 

KPI’s

Measure

2023

2022

 

 

 

 

Turnover

£

£20.56m

£16.67m

 

 

 

 

Gross margin

%

11.77%

8.89%

 

 

 

 

Net profit/(loss) before taxation

£

168k

(830k)

 

 

 

 

Current ratio

 

0.88:1

0.99:1

 

1 to 1

0.96:1

0.95:1

Family Tree Farms UK Limited
Strategic Report (continued)
for the year ended 31 December 2023
- 2 -

On behalf of the board

Dominic Martinez
Director
10 September 2024
Family Tree Farms UK Limited
Directors' report
for the year ended 31 December 2023
- 3 -

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

Principal activities

The principal activity of the company continued to be that of a grower, producer and marketer of fruit.

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 final dividend.

Directors

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

Dominic Martinez
Andy Muxlow
Daniel Jackson
David Jackson
Rick Jackson
Strategic Report

Included within the strategic report is an indication of the principal risks and uncertainties including the risks associated with the market conditions, competition, foreign currency risk, and legislative and compliance risks.

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 company’s auditor 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 company’s auditor is aware of that information.

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
Dominic Martinez
Director
10 September 2024
Family Tree Farms UK Limited
Directors' responsibilities statement
for the year ended 31 December 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 company and of the profit or loss of the company 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 company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Family Tree Farms UK Limited
Independent auditor's report
to the members of Family Tree Farms UK Limited
- 5 -
Opinion

We have audited the financial statements of Family Tree Farms UK Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Family Tree Farms UK Limited
Independent auditor's report (continued)
to the members of Family Tree Farms UK Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor'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.

 

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

Family Tree Farms UK Limited
Independent auditor's report (continued)
to the members of Family Tree Farms UK Limited
- 7 -

 

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Blair Davidson
Senior Statutory Auditor
For and on behalf of Henderson Loggie LLP
10 September 2024
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Family Tree Farms UK Limited
Statement of comprehensive income
for the year ended 31 December 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
20,557,039
16,671,275
Cost of sales
(18,137,085)
(15,189,065)
Gross profit
2,419,954
1,482,210
Administrative expenses
(2,251,683)
(2,282,911)
Other operating expenses
-
0
(29,022)
Profit/(loss) before taxation
168,271
(829,723)
Tax on profit/(loss)
7
-
0
-
0
Profit/(loss) for the financial year
168,271
(829,723)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Family Tree Farms UK Limited
Balance sheet
as at 31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
866,741
714,703
Current assets
Stocks
10
1,549,517
884,018
Debtors
11
4,409,555
4,669,724
Cash at bank and in hand
1,326,240
1,008,650
7,285,312
6,562,392
Creditors: amounts falling due within one year
12
(7,610,219)
(6,898,610)
Net current liabilities
(324,907)
(336,218)
Total assets less current liabilities
541,834
378,485
Creditors: amounts falling due after more than one year
13
(2,711,947)
(2,716,869)
Net liabilities
(2,170,113)
(2,338,384)
Capital and reserves
Called up share capital
15
400
400
Profit and loss reserves
16
(2,170,513)
(2,338,784)
Total equity
(2,170,113)
(2,338,384)

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

The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
Dominic Martinez
Director
Company registration number 12205579 (England and Wales)
Family Tree Farms UK Limited
Statement of changes in equity
for the year ended 31 December 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
400
(1,509,061)
(1,508,661)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(829,723)
(829,723)
Balance at 31 December 2022
400
(2,338,784)
(2,338,384)
Year ended 31 December 2023:
Profit and total comprehensive income
-
168,271
168,271
Balance at 31 December 2023
400
(2,170,513)
(2,170,113)
Family Tree Farms UK Limited
Statement of cash flows
for the year ended 31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
648,211
613,472
Investing activities
Purchase of tangible fixed assets
(359,621)
(221,933)
Proceeds from disposal of tangible fixed assets
29,000
-
0
Net cash used in investing activities
(330,621)
(221,933)
Net increase in cash and cash equivalents
317,590
391,539
Cash and cash equivalents at beginning of year
1,008,650
617,111
Cash and cash equivalents at end of year
1,326,240
1,008,650
Family Tree Farms UK Limited
Notes to the financial statements
for the year ended 31 December 2023
- 12 -
1
Accounting policies
Company information

Family Tree Farms UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Suite 1, Haddonsacre Business Centre, Evesham, England, WR11 8JJ.

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
Going concern

At the period end, the company had a net liabilities position of £2,170,113 (2022 - £2,338,384). Included within creditors are amounts due to fellow group members of £5,324,299 (2022 - £4,539,518). The company continues to meet its working capital commitments from ongoing trading activities whilst it receives ongoing financial support from the wider group when required.true

 

The financial statements have therefore been prepared on a going concern basis. The directors have considered relevant information, including the financial projections, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from rising input costs. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.

Based on these assessments and having regard to the resources available to the company, including the ongoing financial support of the group, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.

1.3
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.

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.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 13 -
1.4
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.

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
2% - 20% straight line
Leasehold improvements
20% straight line
Plant and equipment
10% straight line
Fixtures and fittings
20% straight line
Computer equipment
10% - 33% straight line
Motor vehicles
20% 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 credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
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.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 14 -
1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company 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 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.

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 company 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 company after deducting all of its liabilities.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors, and loans from fellow group companies 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company 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 company.

1.10
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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 when the company has 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.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
1
Accounting policies (continued)
- 16 -
1.11
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.

1.12
Retirement benefits

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

1.13
Leases

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 leases asset are consumed.

1.14
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.

2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty (continued)
- 17 -
Stock provision

Stock is valued at the lower of cost and net realisable value. Management will write down obsolete and damaged stock items throughout the year but in addition at the year end they will consider whether the stock value is appropriate and where required they will apply a stock provision to bring the value down to net realisable value in line with accounting standards. The provision is calculated by management based on their knowledge of the market they sell to and their products.

Trade debtor recovery

Credit control is an important function within the group which requires management to assess on an ongoing basis the recoverability of amounts due from trade debtors. Where recovery is in doubt management will adequately provide against this debt and will arrive at such conclusions based on internal and external knowledge of that customers performance and "ability to pay". Management adopt a prudent approach to credit control.

Accruals

Management estimate requirements for accruals using post year end information and information available from detailed budgets. This identifies cost and income that are expected to be incurred. Accruals are only released where there is a reasonable expectation that these costs will not be invoiced in the future.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of fruit
20,557,039
16,671,275
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,431,041
7,397,800
Europe
9,125,998
9,273,475
20,557,039
16,671,275
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(31,687)
1,992
Fees payable to the company's auditor for the audit of the company's financial statements
16,575
15,500
Depreciation of owned tangible fixed assets
123,872
118,071
Impairment of owned tangible fixed assets
39,535
-
0
Loss on disposal of tangible fixed assets
15,176
-
Operating lease charges
159,247
108,194
Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 18 -
5
Employees

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

2023
2022
Number
Number
14
13

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,122,305
1,296,412
Social security costs
95,584
104,697
Pension costs
63,157
38,791
1,281,046
1,439,900
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
235,963
255,540
Company pension contributions to defined contribution schemes
35,400
17,700
271,363
273,240
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
235,963
255,540
Company pension contributions to defined contribution schemes
35,400
17,700

The directors have been deemed the same as key management personnel and so no separate disclosure is made for key management remuneration.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 19 -
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
-
0
Total current tax
-
-

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

2023
2022
£
£
Profit/(loss) before taxation
168,271
(829,723)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 24% (2022: 19%)
39,578
(157,647)
Tax effect of expenses that are not deductible in determining taxable profit
3,470
214
Unutilised tax losses carried forward
(41,151)
164,121
Super-deduction
(1,897)
(6,688)
Taxation charge for the year
-
-

On 3 March 2021, the UK Budget 2021 announcements included measures to support economic recovery as a result of the COVID-19 pandemic. These included an increase to the UK’s main corporation tax rate to 25%, which became effective from 1 April 2023. The 25% rate was granted Royal Assent on 10 June 2021 and so was substantively enacted at the balance sheet date. As a result the closing deferred tax balances as at 31 December 2023 are recognised at 25% (2022 - 25%) and the corporation tax rate effective in the period has been apportioned between the previous rate of 19% and the new rate of 25% at 23.5% (2022 - 19%).

On the basis of taxable losses carried forward at the year end of £3,083,691 (2022 - £3,154,802) and a lack of clarity as to when these losses will be utilised going forward, a deferred tax asset has not been recognised on the portion of these losses amounting to £2,337,967 (2022 - £2,512,926) which exceed the amount required to offset deferred tax liabilities at 30 September 2023. Were an asset recognised it would likely be at the future rate of 25% and would amount to £584,492 (2022 - £628,232).

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 20 -
8
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Property, plant and equipment
9
39,535
-
0
Recognised in:
Administrative expenses
39,535
-
Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 21 -
9
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2023
82,429
18,479
470,012
38,007
153,597
136,971
899,495
Additions
82,371
-
0
53,047
-
0
1,941
222,262
359,621
Disposals
-
0
-
0
-
0
-
0
(3,888)
(87,959)
(91,847)
Transfers
-
0
-
0
(6,405)
6,405
-
0
-
0
-
0
At 31 December 2023
164,800
18,479
516,654
44,412
151,650
271,274
1,167,269
Depreciation and impairment
At 1 January 2023
10,990
9,417
74,412
19,433
36,919
33,621
184,792
Depreciation charged in the year
14,815
3,696
51,666
8,882
16,766
28,047
123,872
Impairment losses
-
0
-
0
39,535
-
0
-
0
-
0
39,535
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(3,888)
(43,783)
(47,671)
At 31 December 2023
25,805
13,113
165,613
28,315
49,797
17,885
300,528
Carrying amount
At 31 December 2023
138,995
5,366
351,041
16,097
101,853
253,389
866,741
At 31 December 2022
71,439
9,062
395,600
18,574
116,678
103,350
714,703

More information on impairment movements in the year is given in note 8.

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 22 -
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,549,517
884,018
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,911,564
4,508,059
Amounts owed by group undertakings
251,162
4,292
Other debtors
134,224
106,258
Prepayments and accrued income
112,605
51,115
4,409,555
4,669,724
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
2,520,405
3,484,857
Amounts owed to group undertakings
2,612,352
1,822,649
Taxation and social security
34,418
44,647
Other creditors
639,405
721,725
Accruals and deferred income
1,803,639
824,732
7,610,219
6,898,610
13
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to group undertakings
2,711,947
2,716,869
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
63,157
38,791

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

Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
- 23 -
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
400
400
400
400

Each ordinary share carries one vote and is entitled to participate pari passu with other ordinary shares in any dividend or capital distribution.

16
Profit and loss reserves

Profit and loss reserves include all current and prior years retained profit and losses.

17
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
121,451
121,210
Between two and five years
384,000
414,741
In over five years
1,152,000
1,248,000
1,657,451
1,783,951
18
Related party transactions
Transactions with related parties

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

Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
-
0
-
0
1,040,545
493,085
Other related parties
2,882
-
0
8,933,547
6,172,179
Consultancy and payroll costs
Rental costs
2023
2022
2023
2022
£
£
£
£
Other related parties
58,166
106,985
121,718
68,694
Family Tree Farms UK Limited
Notes to the financial statements (continued)
for the year ended 31 December 2023
18
Related party transactions (continued)
- 24 -
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
5,324,299
4,539,518
Other related parties
2,493,755
2,539,659

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Other related parties
251,161
4,292
19
Ultimate controlling party

No one individual or entity has ultimate control of the company.

20
Cash generated from operations
2023
2022
£
£
Profit/(loss) for the year after tax
168,271
(829,723)
Adjustments for:
Loss on disposal of tangible fixed assets
15,176
-
Depreciation and impairment of tangible fixed assets
163,407
118,071
Movements in working capital:
Increase in stocks
(665,499)
(263,563)
Decrease/(increase) in debtors
260,169
(975,448)
Increase in creditors
706,687
2,564,135
Cash generated from operations
648,211
613,472
21
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,008,650
317,590
1,326,240
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