Caseware UK (AP4) 2024.0.164 2024.0.164 2024-09-302024-09-3031truetruetruetrue2023-10-01false33truefalsefalse 06882973 2023-10-01 2024-09-30 06882973 2022-10-01 2023-09-30 06882973 2024-09-30 06882973 2023-09-30 06882973 2022-10-01 06882973 c:Director1 2023-10-01 2024-09-30 06882973 c:Director2 2023-10-01 2024-09-30 06882973 c:Director2 2024-09-30 06882973 c:Director3 2023-10-01 2024-09-30 06882973 c:Director3 2024-09-30 06882973 c:Director4 2023-10-01 2024-09-30 06882973 c:RegisteredOffice 2023-10-01 2024-09-30 06882973 d:Buildings d:ShortLeaseholdAssets 2023-10-01 2024-09-30 06882973 d:Buildings d:ShortLeaseholdAssets 2024-09-30 06882973 d:Buildings d:ShortLeaseholdAssets 2023-09-30 06882973 d:FurnitureFittings 2023-10-01 2024-09-30 06882973 d:FurnitureFittings 2024-09-30 06882973 d:FurnitureFittings 2023-09-30 06882973 d:FurnitureFittings d:OwnedOrFreeholdAssets 2023-10-01 2024-09-30 06882973 d:OfficeEquipment 2023-10-01 2024-09-30 06882973 d:OfficeEquipment 2024-09-30 06882973 d:OfficeEquipment 2023-09-30 06882973 d:OfficeEquipment d:OwnedOrFreeholdAssets 2023-10-01 2024-09-30 06882973 d:OwnedOrFreeholdAssets 2023-10-01 2024-09-30 06882973 d:CurrentFinancialInstruments 2024-09-30 06882973 d:CurrentFinancialInstruments 2023-09-30 06882973 d:Non-currentFinancialInstruments 2024-09-30 06882973 d:Non-currentFinancialInstruments 2023-09-30 06882973 d:CurrentFinancialInstruments d:WithinOneYear 2024-09-30 06882973 d:CurrentFinancialInstruments d:WithinOneYear 2023-09-30 06882973 d:UKTax 2023-10-01 2024-09-30 06882973 d:UKTax 2022-10-01 2023-09-30 06882973 d:ShareCapital 2024-09-30 06882973 d:ShareCapital 2023-09-30 06882973 d:ShareCapital 2022-10-01 06882973 d:CapitalRedemptionReserve 2023-10-01 2024-09-30 06882973 d:CapitalRedemptionReserve 2024-09-30 06882973 d:CapitalRedemptionReserve 2023-09-30 06882973 d:CapitalRedemptionReserve 2022-10-01 06882973 d:RetainedEarningsAccumulatedLosses 2023-10-01 2024-09-30 06882973 d:RetainedEarningsAccumulatedLosses 2024-09-30 06882973 d:RetainedEarningsAccumulatedLosses 2022-10-01 2023-09-30 06882973 d:RetainedEarningsAccumulatedLosses 2023-09-30 06882973 d:RetainedEarningsAccumulatedLosses 2022-10-01 06882973 c:OrdinaryShareClass1 2023-10-01 2024-09-30 06882973 c:OrdinaryShareClass1 2024-09-30 06882973 c:OrdinaryShareClass1 2023-09-30 06882973 c:FRS102 2023-10-01 2024-09-30 06882973 c:Audited 2023-10-01 2024-09-30 06882973 c:FullAccounts 2023-10-01 2024-09-30 06882973 c:PrivateLimitedCompanyLtd 2023-10-01 2024-09-30 06882973 d:WithinOneYear 2024-09-30 06882973 d:WithinOneYear 2023-09-30 06882973 d:BetweenOneFiveYears 2024-09-30 06882973 d:BetweenOneFiveYears 2023-09-30 06882973 2 2023-10-01 2024-09-30 06882973 6 2023-10-01 2024-09-30 06882973 d:AcceleratedTaxDepreciationDeferredTax 2024-09-30 06882973 d:AcceleratedTaxDepreciationDeferredTax 2023-09-30 06882973 e:PoundSterling 2023-10-01 2024-09-30 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 06882973










ETHICAL FOOD COMPANY LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2024

 
ETHICAL FOOD COMPANY LIMITED
 
 
COMPANY INFORMATION


Directors
H Hunt 
S Francis 
K Sands 
Organic Growers Limited 




Registered number
06882973



Registered office
Unit 11a Drayton Manor Drive
Alcester Road

Stratford-Upon-Avon

Warwickshire

CV37 9RQ




Independent auditors
Old Mill Audit Limited

Unit 2, Greenways Business Park

Bellinger Close

Chippenham

Wiltshire

England

SN15 1BN





 
ETHICAL FOOD COMPANY LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 3
Directors' report
 
4 - 5
Independent auditors' report
 
6 - 9
Statement of comprehensive income
 
10
Balance sheet
 
11
Statement of changes in equity
 
12
Notes to the financial statements
 
13 - 26


 
ETHICAL FOOD COMPANY LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Introduction
 
The directors present their strategic report, which is followed by the director's report, together with the audited
financial statements for the year ended 30 September 2024.

Business review
 
The organic market has remained resilient post pandemic and has not seen the declines that were experienced during the last cost of living crisis in 2008. Organic shoppers and retailers of organic have remain engaged and demand has been robust in the period. The overall organic market showed value and volume growth. Within the organic fresh produce sector, volume growth year on year was close to 10%. Organic continues to offer a solution for consumer requiring sustainable, high-quality products free from artificial pesticides. 
The business strategy is to provide consistent availability of quality organic products from sustainable sources and 2024 was a pleasing step which saw 8% growth versus the prior year. The long-term strategy is to expand the product portfolio and improve availability. This requires a specific set of skills within the business. The team increasingly demonstrates these abilities driven by high levels of attention required to unlock the opportunities. The business brings together a significant range of organic products to facilitate scale. This model increasingly drives demand momentum, enabling the business to deliver daily with short dwell times and focus on the freshest product. In an era of inflation, these increased efficiencies drive out unnecessary costs and deliver a visible and efficient supply chain that provides the most effective route to market for our network of high calibre growers and suppliers.
Resilience planning remains a critical part of our activity, as our UK and global sources increasingly experience the effect of climate change and geopolitical factors. The business approach to resilience is one of tailored risk mitigation by category.  This includes identification of salient risks by bespoke risk assessment, horizon scanning, collaborative working and demand forecasting. This iterative process remains critical within our model to provide a resilient supply chain and to enable the consistent delivery of our business strategy.
The Company continued its focus on our Operating Ethically Plans of which 2024 was year 4. Central to the business remains our commitments towards assessing, identifying and mitigating modern slavery risks. The Company is dedicated to promoting and implementing ethical and human rights due diligence, enhancing transparency and fostering awareness through engagement and collaboration across the global supply chains and industry partners. Work in 2024 included hosted sessions in 4 source countries on salient risk approach and modern slavery, implementation of a new integrated human rights risk assessment tool, webinars on grievance mechanisms and ongoing work within collective industry bodies. 
2024 demonstrated an excellent platform to deliver the next stage of the business strategy and we are extremely positive about how the business is positioned. The Company is run by an experienced , skilful and professional team, allied with a robust financial position. The outlook for the future remains good.  

Page 1

 
ETHICAL FOOD COMPANY LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Principal risks and uncertainties
 
The directors consider the principal risk to the company to be the impact on the supply chain due to climate change.
The Company's financial instruments principally comprise of trade debtors, cash at bank and intercompany loans, the main purpose of which is to finance the Company's operations. In addition, the Company has various other financial assets and liabilities such as trade creditors arising directly from operations. It is, and has been throughout the period under review, the Company's policy that there should be no speculative trading in financial instruments. 
The main risks arising from the Company's financial instruments are liquidity, credit and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies have remained unchanged throughout the period.

Liquidity risk

The Company manages its cash requirements to ensure the Company has sufficient liquid resources to meet the operating needs of the business.

Credit Risk

All debtors are subject to credit verification procedures by the Board. Debtors are reviewed on a regular basis and provisions are made for doubtful debts where necessary.

Foreign Currency risk

The Company is exposed to exchange rate fluctuations through normal trading activity. This is largely managed through hedging via use of currency forward contracts.

Financial key performance indicators
 
The key performance indicators of the Company are turnover, gross profit, profit before tax and net assets. A brief analysis of these is shown below:


2024
2023
        £
        £
Turnover

43,511,941

40,365,020

Gross profit

2,794,702

2,575,722

Profit before tax

817,827

541,364

Net assets

6,637,034

6,055,526




Page 2

 
ETHICAL FOOD COMPANY LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024


This report was approved by the board on 26 June 2025 and signed on its behalf.





H Hunt
Director

Page 3

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024

The directors present their report and the financial statements for the year ended 30 September 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the Company is that of sourcing, processing, packaging, distribution and marketing of organic fresh produce.

Results and dividends

The profit for the year, after taxation, amounted to £581,508 (2023 - £336,795).

The directors do not propose the payment of a dividend.
The directors have highlighted in the strategic report on pages 1 - 2, a review of the current year results, future outlook expectations, risks and key performance indicators for the Company. 

Directors

The directors who served during the year were:

H Hunt 
S Francis (appointed 22 April 2024)
K Sands (appointed 22 April 2024)
Organic Growers Limited 

Page 4

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

During the year, the company appointed Old Mill Audit Limited as auditors, who will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 26 June 2025 and signed on its behalf.
 





H Hunt
Director

Page 5

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ETHICAL FOOD COMPANY LIMITED
 

Opinion


We have audited the financial statements of Ethical Food Company Limited (the 'Company') for the year ended 30 September 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 September 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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.


Page 6

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ETHICAL FOOD COMPANY LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


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 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 4, 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.


Page 7

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ETHICAL FOOD COMPANY LIMITED (CONTINUED)


Auditors' 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, 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 deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. We recognised specific food safety standards, external customer accreditations, environmental, health and safety standards to be significant laws and regulations to adhere to. Our tests included: 
- Agreeing the financial statement disclosures to underlying supporting documentation.
- Enquiries of management and those charged with governance.
- Review of meeting minutes
There are inherent limitations in the audit procedures described above 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 would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
 


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
 
Page 8

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ETHICAL FOOD COMPANY LIMITED (CONTINUED)




Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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.





Philip Mills MSc BA ACA 
Senior statutory auditor
for and on behalf of
Old Mill Audit Limited
Statutory Auditor
 
Unit 2, Greenways Business Park
Bellinger Close
Chippenham
Wiltshire
England
SN15 1BN

26 June 2025
Page 9

 
ETHICAL FOOD COMPANY LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2024
2023
Note
£
£

  

Turnover
 4 
43,511,941
40,365,020

Cost of sales
  
(40,717,239)
(37,789,298)

Gross profit
  
2,794,702
2,575,722

Administrative expenses
  
(2,054,200)
(2,071,849)

Operating profit
 5 
740,502
503,873

Interest receivable and similar income
 9 
77,325
37,491

Profit before tax
  
817,827
541,364

Tax on profit
 10 
(236,319)
(204,569)

Profit for the financial year
  
581,508
336,795

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 13 to 26 form part of these financial statements.

Page 10

 
ETHICAL FOOD COMPANY LIMITED
REGISTERED NUMBER: 06882973

BALANCE SHEET
AS AT 30 SEPTEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 11 
576,420
637,305

  
576,420
637,305

Current assets
  

Stocks
 13 
1,053,631
392,085

Debtors: amounts falling due after more than one year
 14 
278,113
327,148

Debtors: amounts falling due within one year
 14 
8,994,181
8,331,246

Cash at bank and in hand
 15 
3,210,296
1,732,712

  
13,536,221
10,783,191

Creditors: amounts falling due within one year
 16 
(7,470,864)
(5,360,227)

Net current assets
  
 
 
6,065,357
 
 
5,422,964

Total assets less current liabilities
  
6,641,777
6,060,269

Provisions for liabilities
  

Deferred tax
 17 
(4,743)
(4,743)

  
 
 
(4,743)
 
 
(4,743)

Net assets
  
6,637,034
6,055,526


Capital and reserves
  

Called up share capital 
 18 
38,088
38,088

Capital redemption reserve
 19 
20,700
20,700

Profit and loss account
 19 
6,578,246
5,996,738

  
6,637,034
6,055,526


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 26 June 2025.



H Hunt
Director

The notes on pages 13 to 26 form part of these financial statements.

Page 11

 
ETHICAL FOOD COMPANY LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£


At 1 October 2022
38,088
20,700
5,659,943
5,718,731


Comprehensive income for the year

Profit for the year
-
-
336,795
336,795



At 1 October 2023
38,088
20,700
5,996,738
6,055,526


Comprehensive income for the year

Profit for the year
-
-
581,508
581,508


At 30 September 2024
38,088
20,700
6,578,246
6,637,034


The notes on pages 13 to 26 form part of these financial statements.

Page 12

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

1.


General information

The Company is a private Company limited by share capital, incorporated in England and Wales. The address of the registered office is Unit 11a Drayton Manor Drive, Alcester Road, Stratford-Upon-Avon, Warwickshire CV37 9RQ.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise
specified within these accounting policies and in accordance with Financial Reporting Standard 102,
the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the
Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Terradace Holdings Limited as at 30 September 2024 and these financial statements may be obtained from 14th Floor, 33 Cavendish Square, London, W1G 0PW.

 
2.3

Exemption from preparing consolidated financial statements

The Company is a parent Company that is also a subsidiary included in the consolidated financial statements of its ultimate parent undertaking established under the law of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.

 
2.4

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Turnover is recognised when goods have been dispatched.

Page 13

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.8

Pensions

Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


 
2.10

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Page 15

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)


2.10
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Short-term leasehold property
-
7%
Fixtures and fittings
-
7%
Office equipment
-
20-33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.11

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.12

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.

 
2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 90 days.

 
2.14

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Page 16

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)


2.14
Financial instruments (continued)

Basic 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 the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.


Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

Page 17

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

  
2.15

Forward contracts

The Company uses derivative financial instruments, in particular forward currency contracts, to manage the financial risks associated with the company's activities and the financing of those activities. The Company does not undertake any trading activities in financial instruments.
Forward exchange contracts are used to hedge foreign exchange exposures arising on forecast payments in foreign currencies. At maturity or setlement, gains and losses are taken to the profit and loss account.
At each period end forward foreign exchange contracts are fair valued by comparing the position of the contract to the fair value. Gains or losses are taken to the profit and loss account.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. Actual results may differ from these estimates. 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 revision and future periods where the revision affects both current and future periods.
The directors consider there to be no significant areas of judgments or key sources of estimation uncertainty.
Tangible fixed asset depreciation
The company depreciates its tangible fixed assets over their estimated useful lives, to an estimated residual value. Management use their knowledge of market conditions, historic experience and estimates of future market conditions to asses the expected useful lives and residual values of their assets.


4.


Turnover

The whole of the turnover is attributable to the company's principal activity.
Materially, all of the turnover arose within the United Kingdom.

Page 18

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

5.


Operating profit

The operating profit is stated after charging/(crediting)

2024
2023
£
£

Foreign exchange differences
16,099
79,460

Other operating lease rentals
93,658
96,832

Depreciation
112,203
110,698


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
34,000
33,296


7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£
£

Wages and salaries
2,800,474
2,855,991

Social security costs
382,992
390,525

Cost of defined contribution scheme
95,624
97,504

3,279,090
3,344,020




The average monthly number of employees, including the directors, during the year was as follows:

2024
2023
Technical, procurement and sales

25

25
 
Management and administration

8

6
 
33

31
 

Page 19

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
463,588
594,128

Company contributions to defined contribution pension schemes
9,840
9,840

473,428
603,968


During the year retirement benefits were accruing to 1 director (2023 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £463,588 (2023 - £594,128).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £9,840 (2023 - £9,840).


9.


Interest receivable

2024
2023
£
£


Bank and other interest receivable
77,325
37,491


10.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
248,512
192,361

Adjustments in respect of previous periods
(12,193)
12,208



Tax on profit
236,319
204,569
Page 20

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - higher than) the applicable rate of corporation tax in the UK of 25% (2023 - 22%). The differences are explained below:

2024
2023
£
£


Profit on ordinary activities before tax
817,827
541,364


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 22%)
204,457
119,100

Effects of:


Expenses not deductible for tax purposes
5,264
75,495

Capital allowances for year in excess of depreciation
8,883
(2,234)

Adjustments to tax charge in respect of prior periods
(12,193)
12,208

Short-term timing difference leading to an increase (decrease) in taxation
30,204
-

Other differences leading to an increase (decrease) in the tax charge
(296)
-

Total tax charge for the year
236,319
204,569


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 21

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

11.


Tangible fixed assets





Short-term leasehold property
Fixtures and fittings
Office equipment
Total

£
£
£
£



Cost


At 1 October 2023
80,998
398,593
424,714
904,305


Additions
-
3,629
47,689
51,318


Disposals
-
-
(57,470)
(57,470)



At 30 September 2024

80,998
402,222
414,933
898,153



Depreciation


At 1 October 2023
5,684
41,910
219,406
267,000


Charge for the year on owned assets
5,684
28,330
78,189
112,203


Disposals
-
-
(57,470)
(57,470)



At 30 September 2024

11,368
70,240
240,125
321,733



Net book value



At 30 September 2024
69,630
331,982
174,808
576,420



At 30 September 2023
75,314
356,683
205,308
637,305


12.


Fixed asset investments

The Company has two dormant wholly owned subsidiary undertakings, Ethical Fruit Company Limited and Organics Farm Foods Limited. The carrying value of the investments is £Nil (2023 -  £Nil)


13.


Stocks

2024
2023
£
£

Finished goods and goods for resale
1,053,631
392,085


Page 22

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

14.


Debtors

2024
2023
£
£

Due after more than one year

Other debtors
278,113
327,148


2024
2023
£
£

Due within one year

Trade debtors
5,458,455
4,719,109

Amounts owed by group undertakings
2,935,561
2,978,327

Other debtors
514,306
500,640

Prepayments and accrued income
85,859
133,170

8,994,181
8,331,246



15.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
3,210,296
1,732,712



16.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
6,405,047
4,447,980

Other taxation and social security
67,997
79,947

Other creditors
85,351
688

Accruals and deferred income
912,469
831,612

7,470,864
5,360,227


Page 23

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

17.


Deferred taxation




2024
2023


£

£






At beginning of year
4,743
4,743



At end of year
4,743
4,743

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
4,743
4,743


18.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



38,088 (2023 - 38,088) Ordinary shares of £1.00 each
38,088
38,088

There is a single class of Ordinary shares. There are no restrictions on distribution of dividends and the
repayment of capital.



19.


Reserves

Capital redemption reserve

The balance was created following the redemption of the Company's own shares out of distributable profits. The reserve is non-distributable.

Profit and loss account

This comprises profits available for distribution.


20.


Financial guarantee

At the balance sheet date the company had entered into group bank cross guarantees in respect of loans
and overdrafts. At the balance sheet date the total group facility amounted to £28,110,643 (2023 -  £21,654,893).

Page 24

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

21.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £95,624 (2023 - £97,504). Contributions totalling £8,427 (2023 - £Nil) were payable to the fund at the balance sheet date.


22.


Commitments under operating leases

At 30 September 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
1,666
1,804

Later than 1 year and not later than 5 years
-
1,527

1,666
3,331


23.Other financial commitments

The company has entered into forward currency contracts amounting to £4,424,283 (2023 - £3,069,862) as at the balance sheet date. 


24.


Related party transactions

At the balance sheet date the net amount due from/(to) group companies were as follows:


2024
2023
£
£

Trade debtors
28,714
14,252
Trade creditors
1,999,015
965,300

During the year the Company was charged £8,520,817 (2023 - £6,815,727) from group companies in relation to packing and produce services.
During the year, the company was charged rental costs of £66,079 (2023 - £78,138) from group companies.

Page 25

 
ETHICAL FOOD COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

25.


Controlling party

Organic Growers Limited is considered to be the Company's immediate parent Company and P Beaumont is considered to be the majority shareholder by virtue of his shareholding in Terradace Holdings Limited, the Company’s ultimate parent Company.
The results of the company are included within the consolidated accounts of Terradace Holdings Limited
which are available to public and may be obtained from 14th Floor, 33 Cavendish Square, London, W1G
0PW.

 
Page 26