Company Registration No. SC230773 (Scotland)
HARBRO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
HARBRO LIMITED
COMPANY INFORMATION
Directors
C J Baxter
W A Bain
R J Baxter
S Kenyon
D G MacKenzie
H E Legg
Secretary
LC Secretaries Limited
Company number
SC230773
Registered office
Markethill Road
TURRIFF
AB53 4PA
Auditor
Johnston Carmichael LLP
Strathlossie House
Elgin Business Park
1 Kirkhill Avenue
Elgin
IV30 8DE
Business address
Markethill Road
TURRIFF
AB53 4PA
HARBRO LIMITED
CONTENTS
Page
Strategic report
1 - 5
Directors' report
6 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 11
Profit and loss account
12
Balance sheet
13
Statement of changes in equity
14
Notes to the financial statements
15 - 31
HARBRO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present their strategic report for the year ended 30 June 2024.
Business Review
The principal activity of the company is the manufacture and supply of animal feedstuff and associated agricultural products and services. There has been no significant change in the principal activities during the year under review nor do the directors expect there to be in the next year.
The company continues to seek innovative new products sourced both internally and externally and supporting this there is a continuing commitment to providing the best quality products and advice available. The diverse but focused nature of the company ensures that the farming community has access to whatever feedstuff, related agricultural product or service is required.
The year to 30th June 2024 started out with UK inflation running at a high level, however, the CPI rate dropped progressively to a level of 2.0% by the end of the financial year. Raw material costs softened in line with this through the year but overhead and payroll costs increased significantly year on year.
As a result of falling inflation and reduced raw material prices, turnover was slightly behind previous years – this was price related. Volumes have grown across the business and, with a rising overhead cost base, it was important that the business maintained and grew gross profit at an appropriate level. The company remains very agile and reacts quickly to the high inflation environment.
In keeping with recent years, maintaining a strong balance sheet with steady cash flows was the main focus with good processes and controls in place to manage supply and costs of raw materials as well as robust cost control across all overheads. Capital investment decisions follow tight return on investment protocols to further ensure that focus on cash flow. The business had significant cash generation in the financial year and that has continued into the year to June 2025.
The business witnessed good growth in volumes across our key categories across all Revenue Streams. The Board have some focused strategic growth initiatives within these Revenue Streams which will result in further EBIT growth going forward.
Wage cost inflation continued at high levels with the National Minimum Wage increases having a greater impact across the Harbro workforce than in previous years. Headcount decreased from 385 to 340 in the year. The post COVID world has seen a churn of people across many businesses and the company has not been immune to this with attrition rising moderately year on year.
In late June 2024, the company completed the acquisition of Murray Farmcare Limited, based in Dumfries, Scotland. This acquisition allows the business to expand both its retail offering and direct to farm offering further in the South of Scotland and the North of England.
We continued to invest in development and training for employees. The health and wellbeing of our employees is important and a more strategic health & safety approach has been taken to ensure they have a safe working environment now and in the future.
The company continues to invest in improving processes in an effort to allow the business to become leaner, more efficient and allow better control of overhead costs.
Securing raw materials at the right price for our production facilities is important and is requiring significant focus in a volatile and high inflation environment; this is managed by the forward buying of cereals and proteins direct from customers and the trade where appropriate.
Cash flow management can be difficult in our industry, and a proactive and structured approach to our credit control ensures that debtor days are closely monitored and kept at an acceptable level.
Our production facilities continue to perform well with a variety of maintenance capital expenditure work being undertaken across all sites as well as the installation of further automation in our Birkhill Mill. We continue to explore further automation options for all of our sites.
As shown in the profit and loss account on page 12, sales have decreased by £2.1 million over the previous year to £137 million. Profits before tax have increased by £1.2 million to £3.0 million.
HARBRO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
As always, the outlook for agriculture is difficult to predict. As a business we continue to see lots of opportunities. The board of directors have defined strategies across all revenue streams with a clear direction to focusing on core activities.
Our Technical function continues to be innovative and we have seen further positive trial results and we continue with a focused approach to R&D. The company is a progressive and innovative business and we actively have encouraged our customers to take that same approach.
Our employees are central to the success of the company. The company continues to invest in training and support to all employees to ensure they have the skills required to perform their duties and to provide an excellent service to our customers.
The Directors are encouraged by their customers continuing innovation across the livestock sector. As the leading animal nutrition company in Scotland, we concentrate on high quality feed and livestock products backed up with excellent technical support. Our focus on improving animal performance and customer profitability is paramount and it is clear that our advice and products are helping farmers move forward with their own diversified business plans.
Principal Risks and Mitigation
Our business is subject to a variety of risks and uncertainties. The following risks are regarded as the most significant to the company at this time:
i) Supply Chain
The company operates in an industry where there can be a high degree of volatility in commodity and raw material prices.
The company maintains strong partnerships with key suppliers and enter into forward contracts to mitigate this risk.
iii) Inflation & Interest Rates – rising costs
The UK is coming out of a period of high inflation and higher Bank of England base rates.
Given our debt is at historically low levels, the company do little in the way of interest rate hedging given the impact of rising interest rates is clearly understood and adequately budgeted for.
There is close monitoring of costs across raw materials, overheads and people. This is mitigated against by a close focus on efficiencies, work scheduling and investment in technologies and energy efficient plant and machinery.
iii) IT and cyber security
The company relies on the IT infrastructure it has in place to support the business. Any failure or cyber-attack on this infrastructure could impact the effective operation of the business.
The company has a strong IT support team and work very closely with all software suppliers and consultants to ensure appropriate security levels are in place. There is an investment programme in place ensuring the business is following best security practices including awareness training for employees.
iv) People
Recruitment, development and retention of key people is crucial to the success of the company.
The board work closely with senior management and HR to ensure the development of our people is at the forefront of our strategic discussions. The Harbro Group have a people strategy that is worked in conjunction with our business strategies.
Future developments
Harbro Limited has no acquisitions on the horizon, the Board recognise that in order to facilitate the strategic growth ambitions of the business it may be that acquisition opportunities will present themselves. The ability for the business to react quickly to these opportunities is important and our strategic partners are fully supportive of this.
HARBRO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
Strategic Planning has always been seen as crucial within the company. As the business continues to grow, the strategy direction of the company and its various business streams becomes even more important. The Board recognise the importance of ensuring our people understand and support the strategy; and all revenue stream strategies have been cascaded through the business.
Key Performance Indicators
The company monitors business performance by means of a variety of key performance indicators at a company and divisional level. These KPI’s are reported monthly at board and operational meetings.
Profitability is measured by looking at a number of measures versus business plan e.g. EBITDA, gross margin and pre-tax profits. The balance sheet is measured by looking at a variety of KPI’s including Debtor Days, Creditor Days and Stock Turnover.
S172 (1) Statement
In 2018 the Companies (Miscellaneous Reporting) Regulations introduced a requirement for large companies to publish a statement describing how the directors have had regard to the matters set out in section 172 (1) (a) to (f) of the Companies Act 2006.
Section 172 (1) (a) to (f) requires each director to act in the way he or she considers would be most likely to promote the success of the company for the benefit of its members as a whole, with regard to the following matters:
(a) The likely consequences of any decision on the long-term
Medium to longer term strategic planning is a key element of the Harbro Limited board of directors’ responsibilities. This is underpinned by clear vision, values and strategic objectives that have been cascaded through the business and to our stakeholders.
All decisions taken within the business are made with reference to our strategic objectives which focus on the following areas:
Sustainable profitable growth
Innovation & continuous improvement to increase efficiency and profitability
People strategy focused on developing the abilities and potential of our people
Customer focused
HARBRO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -
(b) The interests of the company’s employees
The board considers our people to be our greatest asset and the interests of our employees are always taken into consideration in the decisions that are made.
One of the businesses strategic objectives is that “we will deliver a robust people strategy focused on developing the abilities and potential of our people in a safe working environment”.
The company issues a quarterly communication update, copies of which are made available to all employees.
As part of our COVID-19 response we have established a Health & Wellbeing committee to ensure we are providing employees with as much support as required. This committee has continued post pandemic. Through this committee, we have undertaken employee surveys to obtain the views of our employees.
We make available a confidential service called an Employee Assistance Programme
(c) The need to foster the company’s business relationships with suppliers, customers and others.
We have a Commercial and Purchasing team who work closely with our suppliers across the business. A number of our key suppliers have worked with the business for almost 40 years; this has ensured that the company have strong strategic partnerships with these suppliers.
Customer focus is one of our core values and translates into our strategic objective – “We will have a strong customer focus throughout the business ensuring the quality of our service, products and advice is outstanding.” Our species based sales specialists are knowledgeable and well trained in their species ensuring we can provide this “outstanding” support.
As well as customers and suppliers, we seek to build strong relationships with other key stakeholders, including industry/trade bodies and societies. Our directors take an active interest in these connections and in some cases have board involvement so as to build and maintain such relationships, and ensure that the board are at the fore front of industry discussions
(d) The impact of the company’s operations on the community and environment
Our environmental strategy is split into 3 main pillars. The first is the environmental efficiency of our customers and our nutritional offerings. We have an R&D team that works closely with customers, our sales specialists and other interested parties on this. The second pillar is sustainability, in 2019/20 we took the decision to actively remove soya from a range of products and to only buy responsibly sourced palm oil products (RSPO). Where we do use soya we encourage customers to engage in the various sustainable schemes. The third pillar is our internal practices through our environmental strategy group. Current projects include improved transport efficiencies, reduced energy consumption at our production sites, paper and packaging reduction.
We understand our importance as a key employer in our main locations across the country.
(e) The desirability of the company maintaining a reputation for high standards of business conduct.
We believe it is vital that we are trusted by our stakeholders and therefore we seek to maintain high standards in all that we do as a business.
Our Employee Handbook, and other relevant policies apply across the business are reviewed regularly.
Amongst other things, the cover conflicts of interest, our bribery policy, whistleblowing, our expectations of conduct in the workplace and matters in relation to confidentiality, along with our policies aimed at preventing the use of modern slavery, people trafficking and child labour in any aspect of our business.
HARBRO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 5 -
(f) The need to act fairly as between members of the company
We have ten shareholders and their interests are represented on the board. The board of directors is comprised of six executive directors and one non-executive director, with one of the executive directors also undertaking the role of chairman. We believe this ensures all shareholders are treated fairly and that their views are fully represented when making key decisions.
Furthermore, as well as the Articles of Association, we have a Shareholders Agreement in place which clearly set out shareholders rights and any decisions that require shareholder consent.
C J Baxter
Director
27 March 2025
HARBRO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 6 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company during the year was that of the manufacture and supply of animal feedstuff and associated agricultural products as well as the processing of farm feeds.
Results and dividends
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
C J Baxter
W A Bain
R J Baxter
S Kenyon
D G MacKenzie
H E Legg
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Auditor
In accordance with the company's articles, a resolution proposing that Johnston Carmichael LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's Strategic Report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the Directors' Report. It has done so in respect of future developments.
HARBRO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 7 -
On behalf of the board
C J Baxter
Director
27 March 2025
HARBRO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
The directors are responsible for preparing the strategic report, directors' 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 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;
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.
HARBRO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARBRO LIMITED
- 9 -
Opinion
We have audited the financial statements of Harbro Limited (the 'company') for the year ended 30 June 2024 which comprise the Profit and Loss Account, 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:
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 year 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 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 year 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.
HARBRO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARBRO LIMITED
- 10 -
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 and 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 Directors' 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 set out on page 8, the Directors 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 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 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.
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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
Companies Act 2006
Corporation Tax Act 2010
VAT legislation
UK Generally Accepted Accounting Practice
Health & Safety at Work Act 1974; and
General Data Protection Regulation
HARBRO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARBRO LIMITED
- 11 -
We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness via data analytics for specific types of entries, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;
Performing audit procedures over the risk of revenue recognition, including testing on the cut off of revenue;
Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
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.
Fiona Munro (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
27 March 2025
Statutory Auditor
Strathlossie House
Elgin Business Park
1 Kirkhill Avenue
Elgin
IV30 8DE
HARBRO LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
2024
2023
Notes
£000
£000
Turnover
3
136,915
139,055
Cost of sales
(115,845)
(119,916)
Gross profit
21,070
19,139
Administrative expenses
(18,876)
(18,318)
Other operating income
1,074
1,091
Operating profit
4
3,268
1,912
Interest receivable and similar income
7
104
71
Interest payable and similar expenses
8
(90)
(140)
Amounts written off investments
9
(241)
-
Profit before taxation
3,041
1,843
Tax on profit
10
(682)
223
Profit for the financial year
2,359
2,066
Total comprehensive income for the year
2,359
2,066
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HARBRO LIMITED
BALANCE SHEET
AS AT 30 JUNE 2024
30 June 2024
- 13 -
2024
2023
Notes
£000
£000
£000
£000
Fixed assets
Goodwill
11
563
683
Tangible assets
12
6,997
7,718
Investments
13
1,623
1,259
9,183
9,660
Current assets
Stocks
15
13,989
14,563
Debtors
16
20,945
23,351
Cash at bank and in hand
1,331
1,151
36,265
39,065
Creditors: amounts falling due within one year
17
(18,769)
(24,196)
Net current assets
17,496
14,869
Total assets less current liabilities
26,679
24,529
Creditors: amounts falling due after more than one year
18
(407)
(350)
Provisions for liabilities
Provisions
20
863
863
Deferred tax liability
21
133
141
(996)
(1,004)
Net assets
25,276
23,175
Capital and reserves
Called up share capital
23
5,625
5,625
Profit and loss reserves
24
19,651
17,550
Total equity
25,276
23,175
The financial statements were approved by the board of directors and authorised for issue on 27 March 2025 and are signed on its behalf by:
C J Baxter
R J Baxter
Director
Director
Company Registration No. SC230773
HARBRO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 14 -
Share capital
Profit and loss reserves
Total
£000
£000
£000
Balance at 1 July 2022
5,625
15,484
21,109
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
2,066
2,066
Balance at 30 June 2023
5,625
17,550
23,175
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
2,359
2,359
Other movements
-
(258)
(258)
Balance at 30 June 2024
5,625
19,651
25,276
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
1
Accounting policies
Company information
Harbro Limited is a private company limited by shares incorporated and domiciled in Scotland. The registered office is Markethill Road, TURRIFF, AB53 4PA.
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 £000.
The financial statements have been prepared under the historical cost convention modified to include certain financial instruments at fair value. 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:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of The Harbro Group Limited. These consolidated financial statements are available from its registered office, Markethill, Turriff, AB53 4PA.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for the manufacture and supply of animal feedstuff and associated agricultural products, as well as the processing of farm feeds.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on despatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from processing farm feeds are recognised on completion.
1.4
Intangible fixed assets - goodwill
Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 1 - 20 years.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 16 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold land
- not depreciated
Freehold buildings
- over 10 to 50 years
Land and buildings leasehold
- over shorter of remaining lease term and 10 to 50 years
Plant and machinery
- over 5 to 20 years
Fixtures, fittings & equipment
- over 2 to 10 years
Motor vehicles
- 15% to 30% reducing balance
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 the profit and loss account.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with the banks.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
1.10
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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in the profit and loss account, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 18 -
Other financial liabilities
Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
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.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 19 -
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.15
Retirement benefits
The company operates several defined contribution pension schemes. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme.
1.16
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 asset's 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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
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.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
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.
Key sources of estimation uncertainty
Stock provision £670k (2023 - £659k)
Determining the carrying value of stock requires the company to consider if there are any amounts included within their year end stock which they may not have the ability to sell or may be required to sell at less than cost. If there are any items identified as having an estimated net realisable value that is less than cost, the company will have to determine an amount to be recognised as an impairment against their stock balance at the year end. In arriving at this provision the company has regard to the ageing of stock and items that are either static or slow-moving or where there are excess quantities beyond the company's usage requirements.
Dilapidations provision £863k (2023 - £863k)
The company is required to identify if there are any lease agreements which they have entered into as a lessee which include an obligation within them for the entity to incur costs at the end of the lease to reflect any damage to the premises in order to reinstate it to the original condition at the start of the lease. The company must estimate the cost of any such work required based on the condition of the property at the year-end and a provision should be included within the financial statements in advance for these costs. In arriving at this provision the company has regard to any quotes or estimates obtained specific to an individual property.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£000
£000
Turnover analysed by class of business
Sale of goods
132,081
134,337
Processing farm feeds
4,834
4,718
136,915
139,055
2024
2023
£000
£000
Other significant revenue
Management Income
912
913
Sundry Income
133
149
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
3
Turnover and other revenue
(Continued)
- 21 -
2024
2023
£000
£000
Turnover analysed by geographical market
United Kingdom
135,747
137,982
North America
70
105
Europe
1,006
696
Rest of World
92
272
136,915
139,055
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£000
£000
Exchange losses
5
18
Fees payable to the company's auditor for the audit of the company's financial statements
60
55
Depreciation of owned tangible fixed assets
1,433
1,534
Depreciation of tangible fixed assets held under finance leases
521
499
Profit on disposal of tangible fixed assets
(89)
(18)
Amortisation of intangible assets
291
433
Operating lease charges
1,610
1,638
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production and distribution
239
278
Sales, administration and directors
101
107
Total
340
385
Their aggregate remuneration comprised:
2024
2023
£000
£000
Wages and salaries
12,978
12,018
Social security costs
1,294
1,210
Pension costs
548
473
14,820
13,701
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
6
Directors' remuneration
2024
2023
£000
£000
Remuneration for qualifying services
937
788
Company pension contributions to defined contribution schemes
84
50
1,021
838
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2023 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£000
£000
Remuneration for qualifying services
204
204
7
Interest receivable and similar income
2024
2023
£000
£000
Interest income
Interest on bank deposits
104
71
8
Interest payable and similar expenses
2024
2023
£000
£000
Interest on bank overdrafts and loans
-
68
Interest on finance leases and hire purchase contracts
86
72
Other interest
4
90
140
9
Amounts written off investments
2024
2023
£000
£000
Amounts written off investment in subsidiary
(241)
-
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
10
Taxation
2024
2023
£000
£000
Current tax
UK corporation tax on profits for the current period
801
536
Adjustments in respect of prior periods
(281)
(694)
Group tax relief
174
Total current tax
694
(158)
Deferred tax
Origination and reversal of timing differences
(30)
(64)
Adjustment in respect of prior periods
18
(1)
Total deferred tax
(12)
(65)
Total tax charge/(credit)
682
(223)
The actual charge/(credit) 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:
2024
2023
£000
£000
Profit before taxation
3,041
1,843
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.05%)
760
370
Tax effect of expenses that are not deductible in determining taxable profit
101
16
Adjustments in respect of prior years
(281)
(686)
Group relief
174
Depreciation on assets not qualifying for tax allowances
134
90
Deferred tax adjustments in respect of prior years
18
(1)
Effect of change in average deferred tax rate
(12)
Group relief claimed
(174)
Chargeable gains
9
Other adjustments, reliefs and transfers
(9)
Movement in deferred tax not recognised
(50)
Taxation charge/(credit) for the year
682
(223)
A change in the UK Corporation tax rate to 25% took effect from 1 April 2023. This change has had a consequential effect on the group and company's tax charge with the standard rate of tax in the current year reflective of 25% and the prior year a marginal rate arising from the group and company's period straddling the 19% and 25% tax rates.
Deferred tax has been calculated using the rate effective in the period it is expected to reverse.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
11
Intangible fixed assets
Goodwill
£000
Cost
At 1 July 2023
5,452
Additions - business combinations
428
At 30 June 2024
5,880
Amortisation and impairment
At 1 July 2023
4,769
Amortisation charged for the year
291
Amortisation on hive up
257
At 30 June 2024
5,317
Carrying amount
At 30 June 2024
563
At 30 June 2023
683
The goodwill addition of £428k is due to the hive up of the trade and assets of the subsidiary, Russell's Country Store Ltd during the year. The goodwill is established at the date of acquisition of the subsidiary and subsequently written down to reflect the accumulated amortisation from the date of initial acquisition to the date of hive up.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 25 -
12
Tangible fixed assets
Land and buildings freehold
Land and buildings leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£000
£000
£000
£000
£000
£000
Cost
At 1 July 2023
538
2,390
13,636
4,717
2,430
23,711
Additions
518
417
456
1,391
Disposals
(326)
(22)
(325)
(673)
At 30 June 2024
538
2,390
13,828
5,112
2,561
24,429
Depreciation and impairment
At 1 July 2023
188
1,445
8,735
3,678
1,947
15,993
Depreciation charged in the year
85
980
536
353
1,954
Eliminated in respect of disposals
(232)
(22)
(261)
(515)
At 30 June 2024
188
1,530
9,483
4,192
2,039
17,432
Carrying amount
At 30 June 2024
350
860
4,345
920
522
6,997
At 30 June 2023
350
945
4,901
1,039
483
7,718
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£000
£000
Plant and machinery
586
324
Fixtures, fittings & equipment
99
408
Motor vehicles
680
662
1,365
1,394
Freehold land with a cost of £55,282 (2023 - £55,282) has not been depreciated.
13
Fixed asset investments
2024
2023
Notes
£000
£000
Investments in subsidiaries
14
1,623
1,259
The company acquired 100% of the issued share capital of Russell's Country Store Ltd in the year ended 30 June 2018. In the current year, the trading activities and assets held by Russell's Country Store Ltd were hived up into the operations of Harbro Limited.
During the year Harbro Limited acquired 100% of the share capital of Murray Farmcare Limited.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
13
Fixed asset investments
(Continued)
- 26 -
Movements in fixed asset investments
Shares in subsidiaries
£000
Cost or valuation
At 1 July 2023
1,259
Additions
1,034
Transfer to goodwill on hive up
(429)
At 30 June 2024
1,864
Impairment
At 1 July 2023
-
Impairment losses
241
At 30 June 2024
241
Carrying amount
At 30 June 2024
1,623
At 30 June 2023
1,259
14
Subsidiaries
Details of the company's subsidiaries at 30 June 2024 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Agricultural and Ironmongery Supplies Limited
Scotland
Dormant
Ordinary
100
0
Harbro Nutrition
Ireland
Animal feed distribution
Ordinary
100
0
Tore Mill Limited
Scotland
Dormant
Ordinary
100
0
Murray Farmcare Limited
Scotland
Sale of animal feed and pet goods
Ordinary
100
0
Russell's Country Store Ltd.
Scotland
Sale of pet goods and other related leisure
Ordinary
100
0
15
Stocks
2024
2023
£000
£000
Raw materials and consumables
100
100
Finished goods and goods for resale
13,889
14,463
13,989
14,563
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
15
Stocks
(Continued)
- 27 -
Stock is stated after provisions for impairment of £670k (2023 - £659k).
16
Debtors
2024
2023
Amounts falling due within one year:
£000
£000
Trade debtors
15,442
16,461
Other debtors
4,505
4,991
Prepayments and accrued income
998
1,899
20,945
23,351
Trade debtors are stated after provisions for impairment of £450k (2023 - £450k). Bad debts of £4k have been written off (2023 - £10k) through the profit and loss account in the year.
17
Creditors: amounts falling due within one year
2024
2023
Notes
£000
£000
Obligations under finance leases
19
393
489
Trade creditors
11,363
15,618
Amounts owed to group undertakings
4,718
5,163
Corporation tax
718
531
Other taxation and social security
310
303
Other creditors
1,896
2,092
Accruals and deferred income
17
19,415
24,196
For details of secured creditors see note 19.
18
Creditors: amounts falling due after more than one year
2024
2023
Notes
£000
£000
Obligations under finance leases
19
407
350
For details of secured creditors see note 19.
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 28 -
19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£000
£000
Within one year
393
489
In two to five years
407
350
800
839
Net obligations under hire purchase contracts are secured over the assets to which they relate.
20
Provisions for liabilities
2024
2023
£000
£000
Dilapidations
863
863
Deferred tax liabilities
133
141
996
1,004
The dilapidation provision relates to the obligation of the company to restore premises held under leases to their original condition on expiry of the lease. Further details can be found in note 2.
Further details on the deferred tax liabilities can be found in note 21.
21
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£000
£000
Accelerated capital allowances
618
610
Tax losses
(485)
(469)
133
141
2024
Movements in the year:
£000
Liability at 1 July 2023
141
Credit to profit or loss
(8)
Liability at 30 June 2024
133
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 29 -
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£000
£000
Charge to profit or loss in respect of defined contribution schemes
548
473
The company operates several defined contributions pension schemes. The assets of the schemes are held separately from those of the company in independently administered funds. The pension cost charge represents contributions payable by the company to the funds.
23
Share capital
2024
2023
£000
£000
Allotted, called up and fully paid
3,000,000 Ordinary shares of £1 each
3,000
3,000
2,624,900 Redeemable preference shares of £1 each
2,625
2,625
5,625
5,625
The redeemable preference share may be redeemed any time at the discretion of the directors.
24
Profit and loss reserves
The profit and loss reserves represents accumulated profits less distributions.
25
Financial commitments, guarantees and contingent liabilities
The company has provided the company's bankers with cross guarantees over the borrowings of other group companies.
26
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£000
£000
Within one year
1,440
1,235
Between two and five years
4,477
2,089
In over five years
3,785
1,083
9,702
4,407
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 30 -
27
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£000
£000
Acquisition of tangible fixed assets
842
153
HARBRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 31 -
28
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2024
2023
2024
2023
£000
£000
£000
£000
Key management personnel
10
8
55
23
Other related parties
9
7
47
33
Lease payments
2024
2023
£000
£000
Other related parties
385
393
2024
2023
Amounts due to related parties
£000
£000
Other related parties
16
19
2024
2023
Amounts due from related parties
£000
£000
Other related parties
22
1
The company has taken advantage of the exemption under FRS 102 Section 33 paragraph 33.1A, not to disclose transactions entered into between two or more members of the group, as the company is a wholly owned subsidiary of the group to which it is party to the transactions.
29
Ultimate controlling party
The company's parent is The Harbro Group Ltd., a company registered in Scotland. A copy of the group financial statements can be obtained from the company's registered office.
The ultimate parent undertaking is CC Agritech Limited.
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