Company registration number 02480021 (England and Wales)
S & A PRODUCE (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
S & A PRODUCE (UK) LIMITED
COMPANY INFORMATION
Directors
Mr Stanley Davies
Mr Frank Green
Mr Daniel Martin
Mr Trevor Gregory
Mr John Judge
Mr J Kerr
Secretary
Mr J Kerr
Company number
02480021
Registered office
Brook Farm
Marden
Hereford
Herefordshire
HR1 3ET
Auditor
UHY Hacker Young
Bradbury House
Mission Court
Newport
Gwent
United Kingdom
NP20 2DW
Bankers
Lloyds Bank PLC
1 High Town
Hereford
HR1 1AE
S & A PRODUCE (UK) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
S & A PRODUCE (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.

Review of business

The company supplies to multiple retailers in the UK fresh fruit and asparagus which has been sourced from both the farms owned and operated by other companies in the S & A Group and from third party growers in the UK and overseas. It also provides contract packing and haulage services.

 

The results for the company show a profit before tax of £381,967 (2022: £1,108,200) for the year with sales of £95,937,534 (2022: £94,603,175). At the year-end the company showed net assets of £5,307,623 (2022: £10,915,201). The gross profit margin has decreased slightly to 9.5% (2022: 10.0%), this is the group's key measure of performance.

 

Given the straightforward nature of the business, the company’s directors are of the opinion that analysis using any further key performance indicators is not necessary for an understanding of the development, performance or position of the business.

Commercial risks

The management of the business and execution of the company’s strategy are subject to a number of risks.

 

As with any business in the fresh produce sector, growing conditions have a significant influence over availability of produce. This is particularly the case with soft fruit and the use of polytunnels by soft fruit growers to protect the crop from the elements is a critical component in ensuring availability

 

The company sells its produce to a small number of large, multiple retail customers. Reliance on a small customer base is potentially a risk and the group attempts to mitigate this risk by maintaining strong relationships and high service levels with its key customer whilst seeking to expand its customer base.

Financial risks

The company uses various financial instruments, including loans and various items such as trade debtors and creditors that arise directly from its operations. The main purpose of these instruments is to finance the company's ongoing operations. Their existence exposes the company, given an omnibus agreement as disclosed in note 24, to a number of financial risks, primarily interest rate, currency and liquidity risk.

 

The company's exposure to credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

 

As a significant proportion of the company’s purchases are transacted in Euros and US Dollars, it is therefore exposed to transactional currency risk. To the extent that the directors are of the opinion that the level of risk on specific foreign currency transactions is higher than acceptable, foreign currency hedging instruments are taken out.

 

The directors are of the opinion that the financial instruments available within the company are structured in such a way that the level of liquidity risk is acceptable.

 

 

 

 

 

 

 

 

 

S & A PRODUCE (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments

The company's strategy is geared towards ensuring availability to consumers of UK-produced soft fruit at affordable prices. In addition the company will maintain its year- round service to its key UK customers by sourcing good-quality imported produce when UK produce is not available.

On behalf of the board

Mr J Kerr
Director
18 September 2024
S & A PRODUCE (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.

Results and dividends

The results for the year are set out on page 8. A review of business is set out in the strategic report on page 1.

Ordinary dividends were paid amounting to £6,000,000. 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 Stanley Davies
Mr Frank Green
Mr Daniel Martin
Mr Trevor Gregory
Mr John Judge
Mr J Kerr
Auditor

UHY Hacker Young have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting.

Statement of directors' responsibilities

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.

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.

S & A PRODUCE (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Going concern

The directors consider that the company is well positioned with a number of important strengths which make it resilient in a period of economic downturn. The company and its fellow subsidiaries maintain strong trading relationships with its key customers and have continued to invest in efficient growing and packing facilities. As a consequence, the company is capable of withstanding the margin pressure prevailing in the current market conditions.

 

The company made operating profit of £1,175,927 (2022: £1,585,562). The company is part of the S & A Group which at the year-end had cash balances of £10,297,340 (2022: £8,461,788).

 

The company’s core financing, and that of its fellow subsidiaries, is provided by medium to long-term bank loans supplemented by short-term loan and overdraft facilities for the group as a whole. The forecasts and projections for the group of companies show that the group should be able to operate within the bank facilities which it currently has available.

 

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the directors’ report and accounts.

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 J Kerr
Director
18 September 2024
S & A PRODUCE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF S & A PRODUCE (UK) LIMITED
- 5 -
Opinion

We have audited the financial statements of S & A Produce (UK) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 financial statement. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

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:

S & A PRODUCE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF S & A PRODUCE (UK) LIMITED
- 6 -
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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud

and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the company's financial statements to material misstatements, including obtaining an understanding of how fraud might occur, by:

S & A PRODUCE (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF S & A PRODUCE (UK) LIMITED
- 7 -

To address risk of fraud through management bias and override of controls, we:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from the financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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.

Mr John Griffiths (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
18 September 2024
Chartered Accountants
Statutory Auditor
Newport
Gwent
United Kingdom
S & A PRODUCE (UK) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
95,937,534
94,603,175
Cost of sales
(86,791,259)
(85,114,360)
Gross profit
9,146,275
9,488,815
Distribution costs
(2,154,953)
(2,345,044)
Administrative expenses
(6,137,896)
(6,081,710)
Other operating income
4
322,501
523,501
Operating profit
5
1,175,927
1,585,562
Interest payable and similar expenses
8
(793,960)
(477,362)
Profit before taxation
381,967
1,108,200
Tax on profit
10
10,455
(19,918)
Profit for the financial year
392,422
1,088,282

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

S & A PRODUCE (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
392,422
1,088,282
Other comprehensive income
-
-
Total comprehensive income for the year
392,422
1,088,282
S & A PRODUCE (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
720,295
670,978
Current assets
Stocks
13
1,519,048
1,724,698
Debtors
14
5,994,529
14,150,796
Cash at bank and in hand
9,616,571
7,259,926
17,130,148
23,135,420
Creditors: amounts falling due within one year
15
(12,078,738)
(11,796,633)
Net current assets
5,051,410
11,338,787
Total assets less current liabilities
5,771,705
12,009,765
Creditors: amounts falling due after more than one year
16
(233,644)
(272,564)
Provisions for liabilities
Provisions
19
(230,438)
(822,000)
(230,438)
(822,000)
Net assets
5,307,623
10,915,201
Capital and reserves
Called up share capital
22
1,000,472
1,000,472
Share premium account
23
31,972
31,972
Profit and loss reserves
23
4,275,179
9,882,757
Total equity
5,307,623
10,915,201
The financial statements were approved by the board of directors and authorised for issue on 18 September 2024 and are signed on its behalf by:
Mr J  Kerr
Director
Company Registration No. 02480021
S & A PRODUCE (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
1,000,472
31,972
8,794,475
9,826,919
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
1,088,282
1,088,282
Balance at 31 December 2022
1,000,472
31,972
9,882,757
10,915,201
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
392,422
392,422
Dividends
9
-
-
(6,000,000)
(6,000,000)
Balance at 31 December 2023
1,000,472
31,972
4,275,179
5,307,623
S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

S & A Produce (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Brook Farm, Marden, Hereford, Herefordshire, HR1 3ET.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of S & A Group Holdings Limited. These consolidated financial statements are available from its registered office, Brook Farm, Marden, Hereford, Herefordshire, HR1 3ET.

1.2
Going concern

The directors consider that the company is well positioned with a number of important strengths which make it resilient in a period of economic downturn. The company and its fellow subsidiaries maintain strong trading relationships with its key customers and have continued to invest in efficient growing and packing facilities. As a consequence, the company is capable of withstanding the margin pressure prevailing in the current market conditions.true

 

The company made operating profit of £1,175,927 (2022: £1,585,562). The company is part of the S & A Group which at the year-end had cash balances of £10,297,340 (2022: £8,461,788).

 

The company’s core financing, and that of its fellow subsidiaries, is provided by medium to long-term bank loans supplemented by short-term loan and overdraft facilities for the group as a whole. The forecasts and projections for the group of companies show that the group should be able to operate within the bank facilities which it currently has available.

 

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the directors’ report and accounts.

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods 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 discounts and 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 when goods are physically delivered), 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.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Computer software
5 years straight line
1.5
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:

Leasehold improvements
2.5% straight line
Plant and equipment
10 - 25% straight line
Motor vehicles
25% 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.

1.6
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.

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.7
Financial instruments

The company 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 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.

 

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

1.8
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.

 

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.

R&D tax credits

R&D tax credits are recognised when there is a high probability that they will be received, on the basis of prudence as claims are complex and subject to HMRC approval which can take considerable time to be agreed.

1.9
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.10
Retirement benefits

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

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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 leases asset are consumed.

1.12
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.13
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.

 

At the balance sheet date, the directors do not consider that there were any critical judgements which had a significant effect on the amounts recognised in the financial statements.

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Tangible fixed assets

The carrying value of fixed assets at the year end was £720,295 (2022: £670,980).

 

The company's depreciation policy is set out in 1.5 above; the choice of useful economic lives clearly involves significant judgement.

 

The directors periodically review the useful economic life of all assets and where necessary asset lives are revised with any changes in value being reflected in the income statement immediately where there is an impairment or in future periods by a change in depreciation.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Supply of fresh soft fruit and asparagus and ancillary services
82,982,115
82,348,484
Supply of packing, marketing, distribution and management services
12,955,419
12,254,691
95,937,534
94,603,175
2023
2022
£
£
Turnover analysed by geographical market
UK
95,937,534
94,603,175
4
Other operating income
2023
2022
£
£
R&D tax credit
-
15,219
Grants received
70,851
42,301
Other, including management fees
251,650
465,981
322,501
523,501

R&D tax credits of £nil have been recognised in the current year which relate to claims for expenditure incurred in 2022 (2022: R&D tax credits of £15,219 recognised which relate to claims for expenditure incurred in 2020 & 2021).

 

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(151,126)
169,481
Government grants
(70,851)
(42,301)
Fees payable to the company's auditor for the audit of the company's financial statements
16,225
25,200
Depreciation of owned tangible fixed assets
94,169
125,129
Depreciation of tangible fixed assets held under finance leases
25,989
25,606
Profit on disposal of tangible fixed assets
(27,000)
(70,053)
Amortisation of intangible assets
-
74
Operating lease charges
366,861
349,196
6
Employees

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

2023
2022
Number
Number
Production
115
131
Administration
39
34
Total
154
165

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
7,469,133
7,031,629
Social security costs
737,762
709,116
Pension costs
107,427
85,603
8,314,322
7,826,348
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,337,774
846,820
Company pension contributions to defined contribution schemes
41,578
25,985
1,379,352
872,805

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
445,341
279,139
Company pension contributions to defined contribution schemes
9,126
-
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
766,318
464,768
Interest on finance leases and hire purchase contracts
27,642
12,594
793,960
477,362
9
Dividends
2023
2022
£
£
Final paid
6,000,000
-
0
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
3,187
Adjustments in respect of prior periods
(258,909)
(3,187)
Total current tax
(258,909)
-
0
Deferred tax
Origination and reversal of timing differences
248,453
19,918
Adjustment in respect of prior periods
1
-
0
Total deferred tax
248,454
19,918
Total tax (credit)/charge
(10,455)
19,918
S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 19 -

The actual (credit)/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
381,967
1,108,200
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
89,841
210,558
Tax effect of expenses that are not deductible in determining taxable profit
12,231
6,630
Adjustments in respect of prior years
(258,909)
-
0
Effect of change in corporation tax rate
14,703
4,780
Group relief
130,237
(201,663)
Depreciation on assets not qualifying for tax allowances
3,466
2,800
Research and development tax credit
-
0
(3,187)
Other permanent differences
(2,024)
-
0
Taxation (credit)/charge for the year
(10,455)
19,918

In addition to the tax arising as noted above, the company received R&D tax credit income in the prior year (£nil in the current year), refer to note 4.

11
Intangible fixed assets
Software
£
Cost
At 1 January 2023 and 31 December 2023
692,894
Amortisation and impairment
At 1 January 2023 and 31 December 2023
692,894
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Tangible fixed assets
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
589,504
7,556,607
1,000,854
9,146,965
Additions
-
0
32,625
136,850
169,475
Disposals
-
0
-
0
(405,163)
(405,163)
At 31 December 2023
589,504
7,589,232
732,541
8,911,277
Depreciation and impairment
At 1 January 2023
219,593
7,347,423
908,971
8,475,987
Depreciation charged in the year
14,738
76,260
29,160
120,158
Eliminated in respect of disposals
-
0
-
0
(405,163)
(405,163)
At 31 December 2023
234,331
7,423,683
532,968
8,190,982
Carrying amount
At 31 December 2023
355,173
165,549
199,573
720,295
At 31 December 2022
369,911
209,184
91,883
670,978

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

2023
2022
£
£
Plant and equipment
-
0
31,738
Motor vehicles
177,424
77,896
177,424
109,634
13
Stocks
2023
2022
£
£
Raw materials and consumables
979,371
1,028,994
Finished goods and goods for resale
539,677
695,704
1,519,048
1,724,698
S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,144,095
6,880,831
Corporation tax recoverable
21,855
-
0
Amounts owed by group undertakings
-
0
6,584,094
Other debtors
779,209
388,047
5,945,159
13,852,972
Deferred tax asset (note 20)
49,370
297,824
5,994,529
14,150,796

Intercompany balances are repayable on demand.

15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
-
0
159,588
Obligations under finance leases
17
122,854
134,754
Other borrowings
18
4,338,364
4,151,699
Trade creditors
2,453,333
2,972,046
Amounts owed to group undertakings
499,101
-
0
Corporation tax
-
0
53,494
Other taxation and social security
317,822
512,472
Other creditors
232,842
331,521
Accruals and deferred income
4,114,422
3,481,059
12,078,738
11,796,633
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
233,644
272,564
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
122,854
134,754
In two to five years
233,644
272,564
356,498
407,318
S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Finance lease obligations
(Continued)
- 22 -

Finance lease payments represent rentals payable by the company for certain assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The assets on hire purchase are held within another group company.

 

The company's obligations under hire purchase contracts are secured by the lessor's rights over assets held within another group company and on assets held in tangible fixed assets.

18
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
-
0
159,588
Other loans
4,338,364
4,151,699
4,338,364
4,311,287
Payable within one year
4,338,364
4,311,287

Bank overdrafts are secured by a fixed and floating charge over the asset of the company through an omnibus guarantee.

 

Other loans totalling £4,338,364 (2022: £4,151,699) relate to invoice discounting facilities which are secured against trade debtors. This is included within creditors due within one year.

19
Provisions for liabilities
2023
2022
£
£
Long-term incentive scheme
230,438
822,000
Movements on provisions:
Long-term incentive scheme
£
At 1 January 2023
822,000
Additional provisions in the year
220,000
Utilisation of provision
(811,562)
At 31 December 2023
230,438

The group operates a long-term incentive scheme for its key directors.

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
36,131
80,745
Short-term timing differences
13,239
217,079
49,370
297,824
2023
Movements in the year:
£
Asset at 1 January 2023
297,824
Charge to profit or loss
(248,454)
Asset at 31 December 2023
49,370

The deferred tax asset set out above is expected to reverse in future years and relates predominantly to fixed asset timing differences and deferred tax arising on provisions.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
107,427
85,603

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.

 

At 31 December 2023 £52,954 (2022: £46,313) was due, in respect of the current reporting period, to be paid over to the scheme.

22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000,472
1,000,472
1,000,472
1,000,472

The company has one class of ordinary shares which carry no right to fixed income.

S & A PRODUCE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
23
Reserves

The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.

 

The profit and loss reserve represents cumulative profits or losses net of dividends paid and other adjustments.

24
Financial commitments, guarantees and contingent liabilities

The company is part of an omnibus agreement with certain other parties under common control. The net indebtedness of these other parties at the 31 December 2023 was £9,822,642 (2022: £12,452,484). The net indebtedness of the group at the 31 December 2023 was £4,544,435 (2022: £9,503,845). The company has provided as security against this indebtedness an unlimited all-monies guarantee by way of a fixed and floating charge over all of its assets.

25
Related party transactions

The company has taken advantage of the exemption in FRS 102 Section 33 from the requirement to disclose transactions with wholly owned group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.

 

During the year the company purchased goods from entities owned by a director at a cost of £29,223 (2022: £nil) and made sales to entities owned by a director totalling £33,817 (2022: £16,455). Amounts outstanding and included within trade creditors at the year end were £nil (2022: £nil). Amounts outstanding and included within trade debtors at the year end were £51,012 (2022: £18,075).

26
Ultimate controlling party

As at 31 December 2023 the company was controlled by F M Green by virtue of his shareholding in the parent undertaking S & A Group Holding Limited. Copies of the group financial statements for the parent undertaking, which is both the smallest and the largest group into which the results of the company are consolidated, can be obtained from the registered office at Brook Farm, Marden, Herefordshire, HR1 3ET.

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