Company registration number 04153804 (England and Wales)
HARVEST FINE FOODS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2024
HARVEST FINE FOODS LIMITED
COMPANY INFORMATION
Directors
Mrs A Brogan
(Appointed 16 January 2023)
Mr P Atyeo
(Appointed 16 January 2023)
Mr A Selley
(Appointed 16 January 2023)
Secretary
Mr T Hamandi
Company number
04153804
Registered office
814 Leigh Road
Slough
SL1 4BD
Auditor
Azets Audit Services
Athenia House
10-14 Andover Road
Winchester
Hampshire
United Kingdom
SO23 7BS
Business address
Unit 9 South Hampshire Industrial Estate
Brunel Road
Totton
Southampton
Hampshire
United Kingdom
SO40 3SA
HARVEST FINE FOODS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
HARVEST FINE FOODS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the period ended 30 June 2024.
Business Review
The Company has prepared an 18 month period income statement following acquisition by Caterfood Holdings Limited to align accounting year end with the Caterfood buying group.
On a like-for-like basis, the Company’s revenue has increased by 7.5%, now surpassing pre-pandemic levels.
The gross margin has declined by 2.2%, and operating profit has fallen by 0.5%. These declines are attributed to inflationary pressures and product mix.
Due to the level of profit achieved, the Company’s balance sheet position has strengthened with net assets of £1.2 million (2022: £0.8 million).
The directors are satisfied with the Company’s results for the year, and the growing strength of its balance sheet.
Principal risks and uncertainties
The Company’s activities expose it to a variety of financial risks, market risk and credit risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. The business is exposed to a market that can have an inherently high credit risk. Therefore the Company ensures it has tight credit control procedures and a credit risk management team that review the risk of current customers to help mitigate against credit failure. Inflation is a risk to the business if the Company cannot pass on increasing fixed and variable costs to customers, this is mitigated by daily price reviews and good relationships with customers.
Inflation and rising interest rates which were both at historically high levels during the period, however inflation has started to slow. Disposable incomes are reducing in real terms which will inevitably have a negative impact on spending in the hospitality sector. This will in turn create downward pressure on sales and margins. We also expect to see an increase in the failure rate of catering customers as the weaker operations will be unable to cope with a downturn in trade. The supply chain is now more stable than it was 18 months ago but there is still significant uncertainty as the war in Ukraine continues to affect the world economy and supply chains.
Financial instruments
The Company’s principal financial instruments comprise of trade debtors and creditors, and the company's banking facilities.
Liquidity risk is managed by the directors’ monitoring of rolling forecasts and available cash reserves.
Trade debtors are managed in respect of credit and cash flow risk by the implementation of policies that require appropriate credit checks on potential customers before any sales are made. The Company has no significant concentration of credit risk.
Trade creditors risk is managed by ensuring there are sufficient funds available to meet amounts as they fall due.
Financial key performance indicators
The directors consider that the key financial performance indicators are Turnover, Gross margin, Earnings before interest, tax, depreciation and amortisation (EBITDA) and Net assets. Together these demonstrate the financial performance and strength of the Company. An overview of these indicators for both the current period and the prior year is given below:
Turnover: £43,047,283 (2022: £26,923,387)
Gross profit: £13,372,099 (2022: £8,966,595)
Gross margin: 31.1% (2022: 33.3%)
EBITDA margin: 6.2% (2022: 4.6%)
Net assets: £1,158,479 (2022: £806,706)
HARVEST FINE FOODS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 2 -
Future developments
We aim to develop and expand our range of products offered to take full advantage of the new opportunities available to us now we are part of Caterfood buying group.
Mr A Selley
Director
10 February 2025
HARVEST FINE FOODS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 JUNE 2024
- 3 -
The directors present their annual report and financial statements for the period ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of a wholesale distributor of ambient, frozen and chilled foods and fresh produce to caterers and home delivery customers across the South of England.
Results and dividends
The results for the period 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 period and up to the date of signature of the financial statements were as follows:
Dr R S Strongman
(Resigned 16 January 2023)
Mr N B Lockyer
(Resigned 16 January 2023)
Mr M Wright
(Resigned 16 January 2023)
Mrs A Brogan
(Appointed 16 January 2023)
Mr P Atyeo
(Appointed 16 January 2023)
Mr A Selley
(Appointed 16 January 2023)
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
On behalf of the board
Mr A Selley
Director
10 February 2025
HARVEST FINE FOODS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2024
- 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HARVEST FINE FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARVEST FINE FOODS LIMITED
- 5 -
Opinion
We have audited the financial statements of Harvest Fine Foods Limited (the 'company') for the period ended 30 June 2024 which comprise the income statement, the statement of financial position, 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its profit for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HARVEST FINE FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARVEST FINE FOODS 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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.
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.
HARVEST FINE FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARVEST FINE FOODS LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and 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 indicators of potential bias.
Because of the inherent limitations of an audit, there is a 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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Jon Noble (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
12 February 2025
Chartered Accountants
Statutory Auditor
Athenia House
10-14 Andover Road
Winchester
Hampshire
United Kingdom
SO23 7BS
HARVEST FINE FOODS LIMITED
INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2024
- 8 -
Period
Year
ended
ended
30 June
31 December
2024
2022
Notes
£
£
Revenue
3
43,047,283
26,923,387
Cost of sales
(29,675,184)
(17,956,792)
Gross profit
13,372,099
8,966,595
Distribution costs
(8,732,480)
(5,580,398)
Administrative expenses
(3,077,421)
(2,281,318)
Other operating income
655
Operating profit
4
1,562,198
1,105,534
Finance costs
8
(358,280)
(73,458)
Profit before taxation
1,203,918
1,032,076
Tax on profit
9
(170,920)
(189,438)
Profit and total comprehensive income for the financial period
1,032,998
842,638
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
HARVEST FINE FOODS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
30 June 2024
- 9 -
30 June
31 December
2024
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
616,198
676,053
Right-of-use assets
11
2,290,228
-
2,906,426
676,053
Current assets
Inventories
12
1,382,833
1,436,891
Trade and other receivables
13
3,465,144
2,682,952
Cash and cash equivalents
145,738
224,338
4,993,715
4,344,181
Current liabilities
14
(4,477,465)
(4,087,951)
Net current assets
516,250
256,230
Total assets less current liabilities
3,422,676
932,283
Non-current liabilities
14
(2,274,815)
(16,525)
Provisions for liabilities
Deferred tax liabilities
18
(109,052)
Net assets
1,147,861
806,706
Equity
Called up share capital
20
100
100
Share premium account
21
34,861
34,861
Capital redemption reserve
22
63
63
Retained earnings
1,112,837
771,682
Total equity
1,147,861
806,706
The financial statements were approved by the board of directors and authorised for issue on 10 February 2025 and are signed on its behalf by:
Mr A Selley
Director
Company registration number 04153804
HARVEST FINE FOODS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024
- 10 -
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
100
34,861
63
135,414
170,438
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
842,638
842,638
Transactions with owners in their capacity as owners:
Dividends
10
-
-
-
(206,370)
(206,370)
Balance at 1 January 2023, as previously reported
100
34,861
63
771,682
806,706
Impact of adoption of IFRS 16
2
-
-
-
(691,843)
(691,843)
Adjusted balance at 1 January 2023
100
34,861
63
79,839
114,863
Period ended 30 June 2024:
Profit and total comprehensive income for the period
-
-
-
1,032,998
1,032,998
Balance at 30 June 2024
100
34,861
63
1,112,837
1,147,861
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2024
- 11 -
1
Accounting policies
Company information
Harvest Fine Foods Limited is a private company limited by shares incorporated in England and Wales. The registered office is 814 Leigh Road, Slough, SL1 4BD. The principal place of business is Unit 9 South Hampshire Industrial Estate, Brunel Road, Totton, Southampton, Hampshire, United Kingdom, SO40 3SA. The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Reporting period
Harvest Fine Foods Limited's financial statements are presented for a period of eighteen months; the prior year financial statements were presented for a period of one year. The length of accounting period has been changed to align with that of Caterfood Holdings Limited, which acquired 100% of the company's share capital during the year. As a result of this change, amounts presented for the two periods in these financial statements are not entirely comparable.
1.2
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
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.
The company meets the definition of a qualifying entity under FRS 101 Reduced Disclosure Framework. These financial statements for the period ended 30 June 2024 are the first financial statements of Harvest Fine Foods Limited prepared in accordance with FRS 101. The company transitioned from pre-2015 UK GAAP to FRS 101 for all periods presented and the date of transition to FRS 101 was 1 January 2022.
The reported financial position and financial performance for the previous period are not affected by the transition to FRS 101.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
comparative narrative information; and
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Bidcorp Corporation Limited. The group accounts of Bidcorp Corporation Limited are available to the public and can be obtained as set out in note 23.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 12 -
1.3
Going concern
At the time of approving the financial statements, the directors trueare confident that the company has adequate resources to continue in operational existence for the foreseeable future. In consideration of this the directors have taken into account the effects of the current economic climate on the trading performance of the company since the year end. Appropriate measures have been taken to protect the position of the company such as continued access to finance, expanding the existing customer base and products as well as cost cutting measures. The directors believe that the proactive action that has been taken, and the continued recovery of sales that has been seen since the year end, gives confidence that the directors can continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Revenue
Revenue is recognised at the amount receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The amount receivable takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised on delivery or collection, which is when ownership of goods is transferred.
1.5
Property, plant and equipment
Property, plant and equipment 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:
Long term leasehold property
Over the term of the lease
ROU - leasehold property
Over the shorter of the lease term and the useful life
Plant and equipment
15/20% reducing balance and 33% straight line
Motor vehicles
25% reducing balance
ROU - motor vehicles
Over the lease term
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.6
Inventories
Inventories 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 inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
1.7
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
1.8
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.9
Financial liabilities
Basic financial liabilities, including trade and other payables and bank loans, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
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 income statement 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.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.
1.12
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 inventories or non-current 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
In the comparative period, as a lessee applying IAS 17, the company classified leases as finance leases whenever the terms of the lease transferred substantially all the risks and rewards of ownership to the lessees. All other leases were classified as operating leases. Assets held under finance leases were 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 was included in the statement of financial position as a finance lease obligation. Lease payments were treated as consisting of capital and interest elements and the interest was 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, less any lease incentives received, were charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis was more representative of the time pattern in which economic benefits from the leased asset were consumed.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 16 -
1.15
Grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.
2
Adoption of IFRS 16
IFRS 16 leases was adopted by the Company on 1 January 2022 and the modified retrospective approach was applied on transition. Under the modified retrospective approach, the lessee does not restate the comparative figures but instead the company applies the new standard from the beginning of the current year.
When applying IFRS 16 Leases, the company has applied the following practical expedients;
Reliance on the previous identification of a lease (as provided by IAS 17) for all contracts that existed on the date of initial application
Reliance on previous assessments on whether leases are onerous instead of performing an impairment review
Exclusion of initial direct costs from its measurement of the right-of-use asset at the date of initial application
The accounting for operating leases with a remaining lease term of less than 12 months as short-term leases
The use of hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease
The whole contract (lease component and non-lease component) are treated as on lease contract.
The cumulative effect of adopting IFRS 16 Leases, comprised of the reclassification of fixed assets to the right of use asset of £5,916,839 (see note 11 to the financial statements). The opening balance of retained earnings has reduced by £691,843 as a result of adopting IFRS 16 Leases.
The effect of the income statement reporting under IFRS 16 rather than IFRS 17 is an increase in depreciation of £952,514, increase in interest charges of £306,830 and a decrease in administrative expenses of £1,182,738.
3
Revenue
2024
2022
£
£
Revenue analysed by class of business
Food and non-food products
43,047,283
26,923,387
2024
2022
£
£
Other income
Grants received
-
655
All turnover arose within the United Kingdom.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 17 -
4
Operating profit
2024
2022
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
-
(655)
Depreciation of property, plant and equipment - owned
173,167
143,637
Depreciation of property, plant and equipment - right of use assets
953,363
-
(Profit)/loss on disposal of property, plant and equipment
-
5,166
Cost of inventories recognised as an expense
29,675,184
17,956,792
5
Auditor's remuneration
2024
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,350
15,250
For other services
Tax services
2,250
1,100
Other services
2,450
2,325
Total non-audit fees
4,700
3,425
6
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2024
2022
Number
Number
Administration
18
15
Sales
24
23
Purchasing
4
5
Delivery
46
41
Operations
69
79
Total
161
163
Their aggregate remuneration comprised:
2024
2022
£
£
Wages and salaries
6,974,349
4,323,317
Social security costs
660,442
401,319
Pension costs
131,238
147,347
7,766,029
4,871,983
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 18 -
7
Directors' remuneration
2024
2022
£
£
Remuneration for qualifying services
67,728
Company pension contributions to defined contribution schemes
-
41,178
108,906
Directors are remunerated by an intermediate parent company.
8
Finance costs
2024
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
51,925
70,312
Interest on lease liabilities
306,355
3,146
358,280
73,458
9
Taxation
2024
2022
£
£
Current tax
UK corporation tax on profits for the current period
288,051
203,404
Deferred tax
Origination and reversal of temporary differences
(117,131)
(13,966)
Total tax charge
170,920
189,438
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
9
Taxation
(Continued)
- 19 -
The charge for the period can be reconciled to the profit per the income statement as follows:
2024
2022
£
£
Profit before taxation
1,203,918
1,032,076
Expected tax charge based on a corporation tax rate of 24.01% (2022: 19.00%)
289,094
196,094
Effect of expenses not deductible in determining taxable profit
389
1,477
Adjustment in respect of prior years
(151,119)
Permanent capital allowances in excess of depreciation
(128)
(8,133)
Deferred tax adjustments in respect of prior years
(4,625)
-
Tax credits
130
-
Temporary difference not recognised in tax computation
37,179
-
Taxation charge for the period
170,920
189,438
10
Dividends
2024
2022
2024
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Ordinary A
Interim dividend paid
-
1,510.00
-
76,990
Ordinary B
Interim dividend paid
-
2,650.00
-
37,105
Ordinary C
Interim dividend paid
-
2,150.00
-
43,000
Ordinary D
Interim dividend paid
-
3,285.00
-
49,275
Total dividends
Interim dividends paid
206,370
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 20 -
11
Property, plant and equipment
Long term leasehold property
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
580,556
1,023,078
1,603,634
Additions
5,190
106,053
2,070
113,313
Disposals
(138,094)
(138,094)
Recognition of ROU
4,158,197
1,758,642
5,916,839
At 30 June 2024
4,743,943
1,129,131
1,622,618
7,495,692
Accumulated depreciation and impairment
At 1 January 2023
268,623
658,958
927,581
Charge for the period
473,251
112,984
540,295
1,126,530
Eliminated on disposal
(138,094)
(138,094)
Recognition of ROU
1,963,361
709,888
2,673,249
At 30 June 2024
2,705,235
771,942
1,112,089
4,589,266
Carrying amount analysed between owned assets and right-of-use assets
At 30 June 2024
Owned assets
259,009
357,189
-
616,198
Right-of-use assets
1,779,699
-
510,529
2,290,228
2,038,708
357,189
510,529
2,906,426
At 31 December 2022
Owned assets
311,933
364,120
-
676,053
Right-of-use assets
-
-
-
-
311,933
364,120
676,053
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2024
2022
£
£
Net values at the period end
Property
1,779,699
-
Motor vehicles
510,529
-
2,290,228
-
Depreciation charge for the period
Property
415,137
-
Motor vehicles
534,543
-
949,680
-
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 21 -
12
Inventories
2024
2022
£
£
Finished goods
1,382,833
1,436,891
The cost of inventories recognised as an expense in the year amounted to £29,675,184 (2022 - £17,956,792). This is included within cost of sales.
13
Trade and other receivables
2024
2022
£
£
Trade receivables
2,786,866
2,296,760
Provision for bad and doubtful debts
(124,327)
(76,918)
2,662,539
2,219,842
Amounts owed by fellow group undertakings
148,980
Other receivables
18,853
30,463
Prepayments and accrued income
626,693
432,647
3,457,065
2,682,952
Deferred tax asset
8,079
-
3,465,144
2,682,952
14
Liabilities
Current
Non-current
2024
2022
2024
2022
Notes
£
£
£
£
Borrowings
15
1,471,125
Trade and other payables
16
3,716,178
2,305,137
Corporation tax
24,336
203,403
-
-
Other taxation and social security
119,908
103,970
-
-
Lease liabilities
17
617,043
4,316
2,274,815
16,525
4,477,465
4,087,951
2,274,815
16,525
15
Borrowings
2024
2022
£
£
Borrowings held at amortised cost:
Invoice financing facility
-
1,471,125
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
15
Borrowings
(Continued)
- 22 -
The bank previously held a fixed and floating charge over the assets of the company.
The net obligations under finance leases and hire purchase contracts were secured against the assets to which they relate.
16
Trade and other payables
2024
2022
£
£
Trade payables
765,974
1,415,819
Amounts owed to fellow group undertakings
149,159
-
Accruals and deferred income
2,800,203
866,473
Other payables
842
22,845
3,716,178
2,305,137
17
Lease liabilities
2024
2022
Maturity analysis
£
£
Within one year
754,446
5,040
In two to five years
2,076,567
19,179
In over five years
557,388
-
Total undiscounted liabilities
3,388,401
24,219
Future finance charges and other adjustments
(496,543)
(3,378)
Lease liabilities in the financial statements
2,891,858
20,841
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2024
2022
£
£
Current liabilities
617,043
4,316
In two to five years
1,739,213
16,525
In over five years
535,602
-
2,891,858
20,841
2024
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
306,355
3,146
These lease liabilites relate to undiscounted cashflows.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 23 -
18
Deferred taxation
2024
2022
£
£
Deferred tax liabilities
109,052
Deferred tax assets
(8,079)
(8,079)
109,052
Deferred tax assets are expected to be recovered within one year
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Accelerated capital allowances
£
Liability at 1 January 2022
123,018
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(13,966)
Liability at 1 January 2023
109,052
Deferred tax movements in current year
Charge/(credit) to profit or loss
(117,131)
Asset at 30 June 2024
(8,079)
The deferred tax liability is expected to reverse in due course.
19
Retirement benefit schemes
2024
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
131,238
147,347
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 30 June 2024, the company owed £22,443 (2022: £nil) in respect of outstanding pension payments and is included in creditors.
HARVEST FINE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 24 -
20
Share capital
2024
2022
2024
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
51
51
51
51
Ordinary B of £1 each
14
14
14
14
Ordinary C of £1 each
20
20
20
20
Ordinary D of £1 each
15
15
15
15
100
100
100
100
21
Share premium account
2024
2022
£
£
At the beginning and end of the period
34,861
34,861
22
Capital redemption reserve
2024
2022
£
£
At the beginning and end of the period
63
63
23
Controlling party
During the period, Caterfood Holdings Limited, a company incorporated in England and Wales, purchased 100% of the company's share capital. At the period end, the company's immediate parent undertaking was Caterfood Holdings Limited.
The company was under control of Dr R Strongman and Mrs T Strongman until the company's shares were sold to Caterfood Holdings Limited. At this time, the ultimate parent became Bid Corporation Limited, a company incorporated in South Africa. The ultimate parent undertaking at the period end was Bid Corporation Limited.
The most senior parent entitiy producing publicly available financial astatements is Bid Corporation Limited. These financial statements are available upon request from Postnet Suite 136, Private Bag X9976, Johannesburg, 2146 South Africa.
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