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Registered number:
FOR THE PERIOD ENDED 31 DECEMBER 2024
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VOLAC MILK REPLACERS LIMITED
COMPANY INFORMATION
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VOLAC MILK REPLACERS LIMITED
CONTENTS
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2024
Volac Milk Replacers Limited (read: VMRL) is a customer-oriented young animal nutrition specialist with a focus on nutrition for calves, lambs and piglets. We want to contribute to the success of our customers and partners in the food chain and offer our own employees the space to develop optimally.
VMRL is a 100% member of the Denkavit Group, with Denkavit Internationaal BV (Voorthuizen, the Netherlands) as ultimate holding company. Its group and sister companies are thus primarily active in the compound feed industry and its activities mainly consist of the production of and trade in (compound) feed for young animals as well as contract production of veal calves. VMRL was founded in August 2023 as a separate company for the sale of Young Animal Nutrition milk replacer products by Volac International Ltd. The milk replacer business within VMRL had existed for more than 50 years and had established itself as a leading company in the manufacture and sale of the products. VMRL owns established brands in the market sectors that we compete. These brands have a high level of awareness and loyalty with the farmers who use the product to feed their youngstock and with the merchants that supply them. VMRL has an experienced team of Business Managers who work in partnership with our customers to grow the business. The Business Managers are supported by a strong team of marketing and technical colleagues to provide both direction and customer support. Our product sales strategy is underpinned by our “Feed for Growth” educational and communications platform. Mission Growing sustainably together: A starting point that we still fully support. This is also reflected in our mission as part of the Denkavit group: “To be the most attractive partner globally in young animal nutrition”. Due to the growing world population and increasing prosperity, the demand for food is increasing. As a sustainable family business, care for the next generation is in our genes. With our high quality, innovative products and concepts we want to make a positive contribution to animal health, animal welfare, the environment and food safety. The emphasis is on circular economy and the creation of partnerships. That is why we always look ahead and invest in innovation and strong, transparent partnerships. This mission also includes a number of core values. Core values are a series of statements that explain the organization's beliefs about people, work and non-negotiable behavior. Core values can be seen as the 'moral compass' that guides employees in carrying out their daily activities, allowing the organization to move in the desired direction. The core values that we as Denkavit Group stand for are: - Quality and food safety - Innovation - Integrity - Care for people and animals These core values will continue to be reflected in the various activities of our group in the coming years. Examples from the past by the Denkavit Group include the projects “Veal the difference” and “Colostrum-fed calves” in project “Program Calf”. Focus on sustainability is integrated in the business development by the establishment of the “Green team”. This Green team focuses specifically on developing sustainability programs and CSRD reporting requirements. With the help of these projects, we try to raise the quality of our products, increase the connection with dairy farming and raise animal care to a higher level. We closely follow all developments in the field of sustainability, such as those that play extra strong with regard to emissions and welfare in livestock farming in Northwest Europe and respond to this in a market-oriented way. As part of the company's pursuit of continuity, the focus has been further tightened on making protein production in the food chain more sustainable using circular raw material flows and reducing emissions.
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
As a newly incorporated company in August 2023, we have as a company no historic figures to directly compare to. With our first year group revenue of GBP 79.7m and a net profit group result of GBP 5m, we are pleased with the first full year of trading.
Looking at our business we can conclude that the business has performed very well in 2024 with good sales growth in both the calf and lamb milk replacers sectors. Volumes were on budget delivering growth through increased market share with the merchant customer base remaining stable. We expect to be able continue the growth in the business through 2025 and beyond. At the end of the financial year, the group solvency ratio was 73%. Volac Milk Replacers Limited ratio (liquidity ratio) was 70% and stable. Research and development The nutritional needs of animals are continuously evolving. But the raw materials markets are also changing: existing materials are becoming scarcer and new products are emerging for use in animal feed. In addition, social developments and new insights play an ongoing role in the development of optimal compositions. On this basis, it goes without saying that Volac Milk Replacers Limited needs to keep coming up with new products, concepts and applications to allow the young animals to grow and perform optimally. We invest in research and development, both through our own group laboratories (in France, in Italy and in the Netherlands) and at our group research centers (in France and in the Netherlands) and in addition by working on specific research projects with Universities and external research centres in UK and Ireland. Both plans for expanding our research centers in the Netherlands (new research center for breeding calves) and France (new research center for veal calves) are reassessed and adapted to the latest societal, environmental and business demands in 2024, after both investments had been delayed from earlier schedules due to delays in permit licensing. Employees On average, in 2024 there were 24 employees at the Volac Milk Replacers Limited group (converted to full-time equivalent FTE). We expect a stable workforce in 2025. Information about codes of conduct In order to be able to do business successfully, correct behavior in our dealings with our relations and colleagues is of great importance. Therefore, the Denkavit group uses a Business Code of Conduct which has been fully adopted by VMRL. This is a general starting point, not only to the outside but within our organization as well. Various personnel-related matters, which were already common practice, are formally recorded in our personnel manual. Cashflow and financing Volac Milk Replacers Limited is completely financed by the holding company Denkavit Internationaal B.V (Voorthuizen, Netherlands). Currently there is no third party financing existing at Volac Milk Replacers Limited and this is also not expected. As Volac Milk Replacers Limited is expecting a similar result as in 2024, with no other investments for 2025 planned, we foresee no cashflow needs for 2025 within the group.
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
Possible existing risks for continuity:
- Unpredictable development of raw material prices and energy prices Energy price impact is not material for Volac Milk Replacers Limited. Production of the milk replacer products is not energy-intensive, with a minor impact on the total price of the product. If applicable, sales prices will be adjusted accordingly. Commodity price risks are present. The purchasing department continuously monitors various raw material markets for trends and purchasing is aligned accordingly. With high price levels of commodities, we stay close to current positions as far as possible. We are also able to move sales prices in case of fluctuations. - The availability of sufficient (talented and motivated) personnel We monitor the outflow and inflow of personnel. The current picture shows that staff is more stable again and less open to opportunities on the labor market than in the period directly after Covid (2021/2022). We are lucky that we have a very low employment churn rate in our company and we are confident that we are able to fill any vacancies created. - The development of Covid Covid consequences are not there at the moment and are not expected for the coming year. In recent years, we have proved capable of coping with the consequences – even in the event of strict government measures. For this reason, we expect to be able to assess risks in good times and to be able to take measures accordingly. (e.g. by scaling down calve numbers). - Supply chain challenges No problems are expected in 2025. Existing agreements and contacts with suppliers already negotiated by the group procurement team provide a high degree of certainty about the supply of raw materials. Risks are monitored on a daily basis by the planning and purchasing departments who make estimates of needs using existing systems. - (Im)possibilities to pass on cost increases Our sales markets are familiar with fluctuations in selling prices as a result of the volatility of purchasing raw material prices. We are highly capable of passing on fluctuations to the market and in this way our purchasing positions are also aligned. No additional measures to be provided. - The war in Ukraine War in Ukraine has no direct influence on our purchase or sale of our business. Indirectly, war affects volatility of energy and commodity prices. We estimate that those risks are limited for us. - Unpredictability in the market VMRL supply all products into the Agricultural sector. Demand (positive or negative) in the sector can be impacted by market prices, the weather and trade tariffs. The VMRL team have considerable experience in monitoring and reacting to changes in demand and adjusting our offer as required. Strategic risks These risks may have consequences for the achievement of our strategic objectives. As long as the (strategic) long-term objectives are not jeopardized by this, the company is in principle prepared to accept a moderate level of risk. Supply Chain Through the first 6 months of 2025 production of milk replacer products has moved from the contract manufacturing facility in the UK to the Denkavit group factories in the Netherlands. A significant amount of testing has already taken place in the project to ensure that the physical and nutritional quality of the final milk replacer product is not impacted by the production move. Following product testing in the market prior to the move and extensive customer collaboration we anticipate no
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
problems in 2025 and no impact on sales growth.
CSR/Impact of climate change The risk that the vision and program for major Corporate Social Responsibility (CSR) initiatives do not provide sufficient long-term support for the successful achievement of the company's sustainability goals. By not achieving, complying with or reporting correctly on CSR objectives, regulations or agreements, the company can be exposed to reputational damage and/or financial damage. Talent and employee management The risk that the limited ability to attract and retain talent and build critical capabilities for the future impacts has the ability to guarantee sustainable business performance and continuity. Developments in 2024 and prospects for 2025 measures The ability to compete successfully in today's job market (both in terms of retaining and attracting talent) was a key risk factor in 2024 and is likely to remain so in the medium term. The risk with regard to retaining our talent has therefore increased and will remain high in 2025. This importance is underlined in one of our objectives “Enable people” of our DenkaGreen program within the Denkavit Group. Globally, wage inflation reached high levels in 2024. This made it more difficult for employers to attract and retain skilled staff. In the future, changing skill requirements (e.g. more digital/data-driven) will also impact the need to further develop the (ageing) workforce in the company in certain areas. Managers are in frequent dialogue with their teams and through targeted programs (including Learning & Development programs and Sustainable Employability initiatives) we continue to improve the development and retention of our talent, as well as the development of the right skills and capabilities for the company. In 2024, the global geopolitical situation led to numerous correlated risk developments related to the economic and financial situation, supply chain, availability and prices of certain commodities (leading, for example, to fluctuations in energy commodity prices, and trading conditions, which are likely to continue). Increasing protectionism and import restrictions are affecting our supply chain and distribution in certain countries (particularly in Asia). In some cases, long lead times for (re)registration of products have an impact on the timeliness of responding to trends in customer needs. It remains to be seen what the effects of monetary and fiscal policy measures by governments and central authorities will be over the medium term (to fight inflation but avoid a recession). The associated risk profile will probably deteriorate. Our local management and our financial experts are monitoring developments daily. The risk of exchange rate fluctuations, in general and within our portfolios, is controlled by our finance department. This is monitored daily. (Geo)politics The risk of geopolitical events affecting the company's ability to operate in certain countries and significantly impacting local demand, credit risk and currency volatility. Examples include political and social unrest, uncertainty related to approaching elections, terrorism, protectionism and import/trade restrictions. Fluid laws and regulations lead to additional challenges. The combined effects may affect Volac Milk Replacers Limited's financial position, including exposure to interest rates, currency fluctuations, and risks related to commodity prices and credit risks, as well as failure to efficiently manage cash flows.
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
Financial risk management and financial instruments Capital management Volac Milk Replacers Limited strives for a balance between a prudent financing and investment policy. Potential risks are also taken into account if these lie outside the sphere of influence of Volac Milk Replacers Limited. The management (strategic board) is responsible for and determines the policy for Volac Milk Replacers Limited's risk management and internal control measures. This policy is regularly reviewed to reflect changes in market conditions or operations. Active risk management Increased volatility of currency markets and issues in the Eurozone could materially affect Volac Milk Replacers Limited's future results in several ways. Volac Milk Replacers Limited conducts active risk management. Create scenario planning and measures for any problems here part of. Based on a continuous business process, based on monitoring and risk analysis in all Volac Milk Replacers Limited operating companies, business plans are adjusted where necessary and maintained with a targeted package of risk-mitigating measures. Credit risk Volac Milk Replacers Limited is exposed to credit risk in relation to its trade receivables, cash, financial assets and derivatives. Credit risk is managed by systematically monitoring the creditworthiness of customers at a decentralised level. The credit risk is controlled by means of constant attention to creditworthiness and possible payment problems of customers. Volac Milk Replacers Limited's customers generally consist of respected parties with whom a long-term relationship is maintained. In accordance with Volac Milk Replacers Limited's credit management policy, customers are categorised and, depending on their credit profile, the following risk-mitigating measures have been taken: - advance payment, cash payment upon receipt of goods or provision of collateral; - credit insurance. Due to the spread across geographical areas and product groups, there is no significant concentration of credit risk in Volac Milk Replacers Limited's trade receivables. Liquid assets are held as much as possible with first-class international banks. Price development and availability of raw materials Volac Milk Replacers Limited uses dairy raw materials and other raw materials of agricultural origin for its core activities. Prices on the market for these raw materials are highly volatile and are influenced by factors such as the quality and size of the harvests realized. In addition, demand from the market and speculative trade by financial investors play a role. Volac Milk Replacers Limited closely follows developments in this field of prices and availability of raw materials. A raw material purchasing policy has been defined on this basis, in which it is established how certain risks must be covered and which positions may be taken per raw material group. Where necessary, risks are hedged through financial instruments and commodity contracts. Market risks Volac Milk Replacers Limited closely monitors the developments in the market and adjusts its policy if necessary. There are several market risks to be identified. Size of livestock and animal diseases Due to changes in the size of the herd (nitrogen legislation and government intervention in the size of the herd) and the outbreak of animal diseases, the demand for raw materials and / or compound feed / calf milk can fluctuate, which can affect the results from Volac Milk Replacers Limited. Livestock size is affected by a number of factors, including the prices of agricultural products and the costs of complying with laws and regulations. Animal diseases can have a negative effect on the number of animals. Moreover, animal diseases can result in
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
transport restrictions imposed by the government.
Changes in and Compliance with Laws Changes in legislation and regulations at European, national and local level may affect the activities of Volac Milk Replacers Limited or its contract partners. This includes legislation in the field of the environment, food safety and production processes. Volac Milk Replacers Limited closely follows these developments in the field of legislation and regulations that are relevant to it and its contract partners and, if necessary, adjustments are made as a result of the amended legislation. Fraud and Compliance Our cybersecurity programs and fraud awareness measures remain massive important to strengthen compliance with our code of conduct and digital security. During 2024 there were no major cyber incidents. We have not received any fraud reports in 2024. With continued global digitisation, data security and privacy remain key concerns for 2025. As part of our fraud prevention measures, from 2025 we will conduct an annual fraud risk assessment to monitor developments and focus areas, and where necessary, initiate mitigating actions. In general we see that the risk of fraud is increasing due to deteriorating economic and financial conditions circumstances, while more opportunities arise due to digitization and complexity of systems. In particular, there is an increasing fraud trend with regard to third parties parties in the field of destruction of goods and supplier fraud. At Volac Milk Replacers Limited we have not received any reports in this area. Raising awareness among our employees about these trends will be important points for attention in 2025. Cyber security Risk description: The risk that technologies, processes and practices that serve to protect networks (computers, programs and data) may not be sufficient to protect Volac Milk Replacers Limited against attacks, damage or unauthorised access, resulting in disruption of business processes, loss of confidential information , financial loss and/or reputational damage. Developments in 2024 and prospects for 2025 measures In recent years, cyber activity in the world has continued to increase due to further digitisation, which was recently exacerbated by more people working remotely due to Covid. Organised crime also continues to increase the frequency of phishing/malware and fraud attempts, and the potential consequences are exacerbated by increasingly smart, advanced technologies. Combined with continued geopolitical instability (and digital warfare), this has led to a further increase in the risk profile in 2024. Although no cyber incidents have occurred within Volac Milk Replacers Limited in 2024, we see an increasing trend of (attempted) cyber attacks and threats worldwide. As a result, we expect an increase in the risk profile. Our ICT department continuously implements improvements to prevent, detect and respond to cyber threats. As part of the cybersecurity function within Volac Milk Replacers Limited, effectiveness is periodically verified through internal and external assessments. This external benchmarks are used to define future actions related to our cybersecurity program. Since the success of cyber-attacks largely depends on human (inter)action, our cybersecurity program aims to continuously improve awareness within our network of security ambassadors and among our employees worldwide. Clear communication about the importance of cyber alertness across the enterprise across all disciplines and embedding cybersecurity as a key cornerstone of our strategy should further contribute to this. Finally, cyber awareness simulations and training are conducted within the company to improve our response to cyber attacks. Compliance With regard to compliance risks, the company accepts a 'moderate' risk level, provided that this does not have a negative impact on customers, business continuity or reputation, and/or does not lead to a violation of the applicable rules. Product quality and food safety With regard to risks that have a negative impact on food quality and food safety standards, and therefore endanger the health of consumers, we have a zero tolerance policy. Risk of poor quality or contamination of products that pose a health hazard to consumers or a violation of regulations, can lead to a change in the quality
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VOLAC MILK REPLACERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
perception of consumers or governments and can have serious consequences for the company's reputation and market position. Despite all quality measures taken, this is an important inherent risk for which the company applies a zero tolerance policy; a serious food safety incident can have major consequences for our customers and can lead to significant material and reputational damage for the company.
Developments in 2024 and prospects for 2025 measures In recent years, it has been noticeable that local food authorities are increasingly focused on quality aspects of products and food safety, which leads to (more) frequent changes in regulations. In addition, authorities in Europe have a tendency towards 'zero tolerance', which can lead to (an excess of) additional measures. Food safety regulations and their interpretation differ from authority to authority in the various countries in which Volac Milk Replacers Limited is active. In the future, this could lead to inconsistency in required compliance with food safety regulations and ambiguity in quality and recall decisions between countries. Impact of risks in the current financial year In 2024 the above risks did not materialise. Expected turn of events Starting in the fourth quarter of 2023, the market conditions have become more favorable. Markets are getting used to higher prices and sales margins are going up where (dairy) markets are more stable. The positive effect of these trends are expected to continue in 2025. How long this will be lasting is not visible yet and is also depending on developments on the raw material markets as our usage of already purchased materials. As markets are stable it is expected that demand of the products will raise again and the practice of delaying orders to gain from possible price adjustment will stop.
The Group has disclosed the financial key performance indicators above.
The Group does not consider that there are any other key performance indicators to disclose.
Section 172 of the Companies Act 2006 requires directors to take into consideration the interests of stakeholders and other matters in their decision making.
The directors confirm that during the year they had regard to the interests of the Group's employees, suppliers, customers, shareholders, and other stakeholders; the impact of its activities on the community and the environment; and the Group's reputation for good business conduct, when making decisions. Further details on how the directors have fulfilled their duties regarding s172 are set out in the Strategic Report.
This report was approved by the board and signed on its behalf.
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VOLAC MILK REPLACERS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the period ended 31 December 2024.
The directors who served during the period were:
The profit for the period, after taxation, amounted to £5,075,154.
During the period, the Group did not pay or propose any dividends.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Group had disclosed future developments within the Strategic Report.
The Group has disclosed this information within the Strategic Report.
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VOLAC MILK REPLACERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
There have been no significant events affecting the Group since the year end.
Under section 487(2) of the Companies Act 2006, Price Bailey LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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VOLAC MILK REPLACERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VOLAC MILK REPLACERS LIMITED
We have audited the financial statements of Volac Milk Replacers Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 December 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of 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 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 Group's or the parent 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.
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VOLAC MILK REPLACERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VOLAC MILK REPLACERS LIMITED (CONTINUED)
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 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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VOLAC MILK REPLACERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VOLAC MILK REPLACERS LIMITED (CONTINUED)
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 Group 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 considered the nature of the company’s industry and its control environment, and reviewed the Group's and Company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.
We obtained an understanding of the legal and regulatory framework that the Group and Company operate in, and identified the key laws and regulations that: • had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act, accounting standards, tax legislation; and • do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group's and Company’s ability to operate or to avoid material penalty. These included: health and safety regulations, employments laws, agricultural laws relating to animal nutrition and laws surrounding human nutrition. We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. As a result, we identified potential for fraud in the following areas, and our specific procedures performed to address these: • revenue recognition, we assessed management’s calculations and performed testing over the underlying data used. We have performed substantive testing around manual adjustments posted to revenue to confirm appropriateness of such entries. We have also performed procedures to identify outliers in revenue transactions. • management override, we carried out testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business. We also assessed management bias in relation to the accounting policies adopted and in determining significant accounting estimates. In addition to the above, our procedures to respond to the risks identified included the following: • performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; • reading meeting minutes provided; • gathering an understanding of transactions included within designated legal and professional account codes; and • enquiring with management, those charged with governance, including in-house legal counsel concerning actual and potential litigation and claims, and instances of non compliance with laws and regulations Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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VOLAC MILK REPLACERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VOLAC MILK REPLACERS LIMITED (CONTINUED)
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.
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 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Tennyson House
Cambridge Business Park
CB4 0WZ
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VOLAC MILK REPLACERS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2024
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VOLAC MILK REPLACERS LIMITED
REGISTERED NUMBER: 15085905
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 19 September 2025.
The notes on pages 19 to 34 form part of these financial statements.
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VOLAC MILK REPLACERS LIMITED
REGISTERED NUMBER: 15085905
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 19 to 34 form part of these financial statements.
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