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Registered number: 03007729
VARFELL FARMS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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VARFELL FARMS LTD
COMPANY INFORMATION
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A W J Newey (resigned 24 March 2025)
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M P I Thomas (resigned 24 March 2025)
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Chartered Accountants & Statutory Auditor
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Barnes Roffe Advisory Limited
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Charles Lake House, Claire Causeway
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VARFELL FARMS LTD
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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VARFELL FARMS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Varfell Farms is the world leader in daffodil production with its growing operations based in west Cornwall. The operation controls approximately 4,000 acres of productive land with the centre of its operations based in Penzance.
Varfell has developed a unique relationship with land owners in Cornwall to allow for sustainable crop rotation, using regenerative farming methods to create healthy soils and increased crop yields.
In June 2020 the Greosn Group took full ownership of Varfell Farms. Together with the local management team we have built on the synergies within the Group to further strengthen the value Varfell can offer its customers and develop unique long term partnerships with the UK's leading retailers.
The Board are please to report operating profits of £3,037,499, an increase of 35 % year on year.
In 2024 the business has continued to focus on building sustainable and long term relationships with our customers. At the same time we have reviewed synergies with the Greosn Group and its divisions, taking advantage of the wealth of technical and industry knowledge to add value to our overall offering to our customers.
Gross margins remain challenging with a 2.1% reduction due to pressure on passing on the costs of national living wage and maintaining daffodils as a product accessible to all at a highly competitive price point.
The strategy of the business is to develop a sustainable business model through regenerative farming practices and husbandry that will improve harvest yields and crop health. Significant investments have been made during 2024 in bulb planting and harvesting to ensure the highest quality of bulb health.
Varfell Farms is now poised for significant growth supported by our Group and further investments are planned for 2025.
At the same time our business is first and foremost about the well being of our staff and all stakeholders. We are pleased to report that the accommodation site at Varfell continues to be upgraded to provide our seasonal teams with the best possible experience whilst at Varfell farms.
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VARFELL FARMS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties
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The cut flower industry, particularly the sector supplying the multiple retailers, continues to be highly competitive. The flower types provided by the business which are mostly seasonal and at the lower end of the price spectrum which should limit the risk of reduced market demand. Management believes that the company's key strengths and strategy will enable the business to flourish despite the competitive arena and general market conditions.
Investments have continued to be made to further enhance the company's key strengths in the growing of flower crops and further improve operational efficiency.
Creating a sustainable pool of seasonal labour after Brexit and managing the end of free movement of labour is a key risk and priority for Varfell. With the Greosn Group taking full ownership of Varfell Farms we can develop a strategic partnership with our sister company Proforce who is the largest labour provider in the fresh produce sector and a government sponsor of the Seasonal Worker Pilot Scheme. This strategic partnership places Varfell in a unique and advantageous position in the daffodil production sector.
The Group continue to work with and lobby government agencies to extend Visa entry systems for seasonal workers to support agriculture and horticulture.
As with most agricultural businesses, the company's crops and harvest activities are subject to the influence of the weather. The timing, volume and quality of crops will be influenced by the prevailing weather conditions in any season and the company works closely with its customers and suppliers to ensure fluctuations can be accommodated. The company relies on its extensive experience to predict, assess and plan for the impact of changes in weather conditions to ensure that these are appropriately managed.
Modern Slavery Statement
Varfell Farms Ltd is committed to driving out acts of modern day slavery from within its own business and that from within its supply chains. The company acknowledges responsibility to the Modern Slavery Act 2015 and will ensure transparency within the organisation and with suppliers of goods and services to the organisation.
The principal activities of the company are those of growing and packing of cut flowers and plants for sale to multiple retailers. Within the supply chain there are relationships with external businesses for the sourcing of local products and services at certain times of the year and occasional insourcing of products from outside the UK.
As part of Varfell's due diligence processes into slavery and human trafficking the supplier approval process incorporates a review of the controls undertaken by the suppliers. Imported produce from sources outside of the UK and EU are potentially more at risk for slavery/human trafficking issues. The level of management control required for these sources will be continually monitored.
The Company will not support or deal with any business knowingly Involved In slavery or human trafficking.
The Company Directors and Senior Management shall take responsibility for implementing this policy statement and Its objectives and shall provide adequate resources and investment to ensure that slavery and human trafficking is not taking place within the organisation or within its supply chains.
The Modern Slavery Statement will be reviewed annually and updated.
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VARFELL FARMS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Financial key performance indicators
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Turnover remained stable at £23,139,539.
Operating profits of £3,037,499, an increase of 35% year on year.
Group synergies and the investment in the farm resulted in profit before tax increasing to £3,041,256 and increase of 42% year on year.
Other key performance indicators
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Other key performance indicators used in the ongoing management of the business include customer and product profitability, peer group reviews, production yields and sales waste. Given the straightforward nature of the business, the group's directors are of the opinion that publishing these external performance indicators is not necessary for an understanding of the development of the business.
Post balance sheet events
The farm has seen a successful start to 2025 with supply chains and labour availability remaining robust . Consumer demand for daffodils remains very strong.
In June 2025, the Farm made a significant invested in further bulb stock to further support our strategy to achieve optimum efficiency from our operations in Cornwall and support our customers in strengthening daffodils in the cut flower sector.
This report was approved by the board and signed on its behalf.
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VARFELL FARMS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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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 judgments 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 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.
The profit for the year, after taxation, amounted to £2,264,559 (2023 - £1,591,449).
Dividends of £Nil (2023: £Nil) were voted during the year.
The directors who served during the year were:
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A W J Newey (resigned 24 March 2025)
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M P I Thomas (resigned 24 March 2025)
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VARFELL FARMS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Disclosure of information to auditors
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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.
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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VARFELL FARMS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARFELL FARMS LTD
We have audited the financial statements of Varfell Farms Ltd (the 'company') for the year ended 31 December 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 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 31 December 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 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
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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.
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VARFELL FARMS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARFELL FARMS LTD (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.
Opinion on other matters prescribed by the Companies Act 2006
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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
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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
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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.
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VARFELL FARMS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARFELL FARMS LTD (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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:
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements. Audit procedures performed by the engagement team included:
• Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and a review of the reports made by management; and
• Assessment of identified fraud risk factors; and
• Challenging assumptions and judgements made by management in its significant accounting estimates particularly with regard to the biological asset valuation; and
• Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
• Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
• Performing analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
• Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud; and
• Checking and reperforming the reconciliation of key control accounts; and
• Reading minutes of meetings of those charged with governance, and reviewing correspondence with relevant tax and regulatory authorities; and
• Review of internal controls and physical inspection of tangible assets susceptible to fraud or irregularity; and
• Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and
• Physical verification of stock through attendance of the year-end Stock-take and analytical procedures undertaken on stock valuation; and
• Confirmation of employee existence through substantive testing.
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VARFELL FARMS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARFELL FARMS LTD (CONTINUED)
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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
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VARFELL FARMS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARFELL FARMS LTD (CONTINUED)
Simon Webber BA (hons) DChA FCA (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants & Statutory Auditor
Chichester
PO20 7AJ
Date: 29 September 2025
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VARFELL FARMS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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Other comprehensive income for the year
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Fair value movement of freehold property
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Deferred tax on revalued property
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 15 to 35 form part of these financial statements.
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VARFELL FARMS LTD
REGISTERED NUMBER: 03007729
BALANCE SHEET
AS AT 31 DECEMBER 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current assets/(liabilities)
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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VARFELL FARMS LTD
REGISTERED NUMBER: 03007729
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 35 form part of these financial statements.
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VARFELL FARMS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Revaluation reserve net of deferred tax
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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The notes on pages 15 to 35 form part of these financial statements.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The company is a private company limited by share capital and incorporated in England and Wales. The address of its registered office is Varfell Farm Varfell Lane, Longrock, Penzance, TR20 8AQ.
The principal activity of the group during the period has been that of growing of other non-perennial crops, growing of other perennial crops, post-harvest crop activities and wholesale of flowers and plants.
2.Accounting policies
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Basis of preparation of financial statements
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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 judgment in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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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).
This information is included in the consolidated financial statements of Greosn Limited as at 31 December 2024 and these financial statements may be obtained from Companies House.
The company remains profitable with supply chains and labour availability being secured through proactive measures taken in collaboration with our customers and sister company, Pro-Force Limited. The company continues to enjoy the support of its bankers for finance as well as having access to working capital from the wider group should this be required. The directors are confident that the company has the ability to continue to meet its obligations as they fall due. Accordingly, the financial statements have been prepared on a going concern basis.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Foreign currency translation
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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.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the company has transferred the significant risks and rewards of ownership to the buyer;
∙the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
All borrowing costs are recognised in the Statement of comprehensive income in the year in which they are incurred.
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 profit or loss 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.
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Current and deferred taxation
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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.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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.
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 at the following rates;-
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No depreciation as under construction
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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.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Revaluation of tangible fixed assets
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Individual freehold and leasehold properties are carried at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
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 weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of comprehensive income.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Biological assets can be categorised as short or long term depending upon the product life cycle of the asset concerned and its output in the form of harvested crops for sale.
Those biological assets which will produce more than one crop over a number of years are classified as long term biological assets whilst those which will produce a single crop with the asset either being wasted or sold as part of the product offering are classified as short term.
Long term biological assets are mainly from the company's daffodil farm which undertakes the activities of growing and sourcing daffodil flowers for onward supply to retail and wholesale markets. Flowers are grown from bulbs which are planted to produce an annual flower crop which is harvested, packed and sold. These bulb assets are considered to be biological assets within the scope of FRS102. Given the indefinite useful life of these bulbs, they are classified in the balance sheet under fixed assets. The bulbs reproduce every 3 to 5 years resulting in the so-called 'multiplication' effect.
The company can reliably measure fair value of these bulb assets and the most appropriate and representative method for assessing fair value in accordance with FRS102 is considered to be by calculating the net present value of the daffodil flower production. The company has established, based on historical information, clear profitability reporting on own production and sourced production. This allows the company to clearly forecast future performance and to implement a more consistent valuation method enabling a net present value approach to measure the fair value of these assets.
A gain or loss arising on the initial recognition of these biological assets at fair value less costs to sell, and from a change in fair value less costs to sell, are included in the income statement for the period in which it arises. The costs associated with growing the flower and tending the bulb are expensed in the income statement as a cost of sale when the flowers and bulbs are sold.
At the year end the company also had Biological Assets in relation to the production of other flowers for subsequent incorporation into bouquets for onward supply to the retail multiples. The company has considered how these Biological Assets should be valued in accordance with FRS102 and has concluded that the ability to determine a fair value less costs to sell cannot be reliably determined. Following the point of harvest the company will combine the harvested crops with complementary products, both purchased and/or grown in house, together with packaging thus creating a finished bouquet or pot for supply. This process incurs significant costs and results in the revenues of the finished products made available for sale not being in direct correlation to the products grown and held as biological assets at the year end.
The company undertakes a secondary process to convert its harvested products into packed bouquets for supply to the retail market. This secondary production process includes combining multiple products grown in-house with those purchased from third parties in order to produce bouquets. This process incurs significant costs.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Given the above it is considered that market data does not exist in any significant or reliable way in relation to the specific product offerings made by the company. The significance of costs to sell and the various revenue streams that the product could be combined into mean that no reliable measure of fair value less costs to sell is available to the company. It is therefore considered that fair value less costs to sell cannot be reliably determined and as a result the appropriate method for valuing other flower biological assets is on a cost basis less depreciation and impairment.
In order to value the company's other flower biological assets in accordance with FRS102 the company has valued this category of biological asset at cost less accumulated depreciation and impairment losses on the grounds that fair value cannot be reliably measured.
Short term biological assets consist of Dahlia cuttings planted at the year end.
It is the company policy not to provide termination benefits over and above its normal terms of employment. In certain circumstances where an employee's contract is ended before its term or voluntary redundancy is encouraged a formal plan for termination is agreed and compensation is assessed on a case by case basis. The company recognises employee termination benefits as an expense when economic outflow is probable.
The company discounts its trade debts. The accounting policy is to include trade debtors discounted with recourse under trade debtors due within one year and to record the returnable element of the proceeds under other creditors due within one year. Discount fees are charged to the income statement when payable. Bad debts are borne by the company and charged to the income statement when reasonably foreseeable.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Taxation
Management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits, together with an assessment of the effects of future tax planning strategies.
Freehold property valuation
The company has recognised tangible fixed assets with a carrying value of £10,264,569 (2023: £10,089,108) at the reporting date (see note 14). The company has adopted the revaluation model for the measurement of land and buildings, other assets are stated at their cost less provision for depreciation and impairment.
To determine the fair value of land and buildings the company has engaged independent valuation specialists with experience in the location and nature of the property being valued. They have used a valuation technique based on comparable market data. This independent valuation was undertaken in 2019, subsequent valuations have been undertaken by the directors with sufficient regularity to ensure that the carrying value of revalued assets reflects current market conditions.
Long term biological assets
All assumptions and judgments associated with the valuations of the long term biological assets are discussed in detail in note 2.21 and 15.
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An analysis of turnover by class of business is as follows:
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Analysis of turnover by country of destination:
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The operating profit is stated after charging:
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Profit/(Loss) on sale of fixed assets
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Fees payable to the company's auditors for the audit of the company's financial statements
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Other interest receivable
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Interest payable and similar expenses
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Bank overdraft and loan interest payable
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Finance leases and hire purchase contracts
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Current tax on profits for the year
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Allowable depreciation of deferred revenue expenditure
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Deferred tax charged/(released)
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Total tax charge for the year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Charge for the year on owned assets
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Transfers between classes
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Charge for the year on owned assets
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Charge for the year on financed assets
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
13.Tangible fixed assets (continued)
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The company has assets under construction with the net book value of these assets at the Balance Sheet date being £Nil (2023: £1,071,873).
The company has assets under hire purchase agreements with the net book value of these assets at the Balance Sheet date being £1,561,346 (2023: £1,909,475).
The effective date of the freehold property revaluation was 16 August 2019.
The property was valued by independent professional surveyors, Savills, who have valued the buildings using both the traditional investment “all risks” yield method of valuation, having regard to comparable evidence and current investment market sentiment along with the comparative method examining relevant comparable sales of similar properties and examining then on their ratio of sales value to the floor area. Due to the lack of directly comparable transactions in terms of size and location it was necessary for Savills to make various adjustments to the rental value and investment yields adopted based upon their professional judgement and experience of the local market, along with the sentiment expressed by various agents. Subsequent valuations have been undertaken by the directors of the company factoring relevant market data.
Included within Freehold property is land at a valuation of £2,666,321 for which depreciation is not provided.
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Cost or valuation at 31 December 2024 is as follows:
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If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Long term biological assets
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Long term biological assets
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Biological assets can be categorised as short or long term depending upon the product lifecycle of the asset concerned and its output in the form of harvested crops for sale.
Those biological assets which will produce more than one crop over a number of years are classified as long term biological assets whilst those which will produce a single crop, with the asset either being wasted or sold as part of the product offering, classified as short term.
Long term Biological Assets consist mainly of Daffodil Bulbs planted in the ground as at the year end.
Short term biological assets consist solely of Dahlia cuttings planted at the period end.
Over recent years the company's focus has been on the innovation of new varieties of daffodils. The main goal has been to breed varieties which could be grown earlier and later than the company's competitors, providing a significant advantage towards retail customers. Due to these developments, the company has expanded its bulb portfolio to more than 360 varieties currently.
To calculate fair value it is impossible to value each variety separately, partly because there is no market price available for each of the individual varieties. Therefore, all varieties are grouped under the following categories:
- Early varieties: these can be harvested in January .
- Mid varieties: harvested February-March, this is the normal season (all other growers have production as well)
- Late varieties: harvested In April, which is very challenging due to weather uncertainties (low production from competitors).
In order to value the company's daffodil bulb biological assets in accordance with FRS102 the company has developed a model to calculate fair value based on the net present value of the daffodils produced. This is a level 3 measure in terms of the fair value measurement hierarchy.
Sales statistics over recent years have shown that daffodils which are sold in January and April are extremely demanded by retailers and hence give greater added value and margins. Therefore, based on previous years' averages, underlying sales prices are allocated accordingly in the model to calculate revenues going forward on which a 0% increase is included year on year.
The asset producing the flowers are the actual bulbs in the ground (70,253 planted tonnes) which form the basis for revenue assurance and future growth. As these bulbs on average generate an extra bulb that produces a flower whilst planted (based on uplift proven over the years), the number of bulbs in the ground will increase ·year on year. In order to accommodate this into the valuation model, a "multiplicator" effect has-been applied (over 5 years a bulb generates an extra bulb with flower production, excluding waste). As it is common practice to sell surplus bulbs each year, the assumption is taken that an amount of bulbs generated in the ground are to be sold. The remainder is used to further grow flowers and fulfil the extra demand of customers. No impact of increasing yields is taken into account. Growth rate is set at 0% (2023: 0.5%). All costs are based on the actual performance of the previous year, inclusive of a 0% (2023: 0.5%) cost inflation rate. Potential future savings are not taken into account.
All these assumptions are reflected in the discounted cash flow model using a weighted average cost of capital of 10.7%.
In order to value the company's other flower biological assets in accordance with FRS102 the company has valued this category of biological asset at cost less accumulated depreciation and impairment losses on the grounds that fair value cannot be reliably measured. This is a level 3 measure in terms of the fair value measurement hierarchy.
The company undertakes a secondary process to convert its harvested products into packed bouquets for supply to the retail market. This secondary production process includes combining multiple products
grown in-house with those purchased from third parties in order to produce bouquets. This process incurs
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Raw materials and consumables
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Finished goods and goods for resale
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Included in other creditors is an invoice financing facility of £175,465 (2023: £356,109). Invoice financing facility is secured by way of fixed and floating charges over the undertakings, property and assets of the company.
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Hire purchase and finance lease liabilities of £1,117,549 (2023: £1,570,264) are secured over the assets to which they relate.
Other creditors totalling £200,000 (2023: £1,000,000) are secured by way of a fixed charge over the assets of the company.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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Bank borrowings
At the year end the balance of £766,937 (2023: £840,583) is secured with a cross guarantee from the group's parent received on the freehold property known as Newlands on Pagham Road, Lagness.
The overdraft facility of £2,440,749 (2023: £2,355,758) is secured by way of fixed and floating charges over the undertakings, property and assets of the company.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Charged to profit or loss
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Charged to other comprehensive income
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Revaluation of land and buildings
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Allotted, called up and fully paid
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26,408,000 (2023 - 26,408,000) Ordinary shares of £1.00 each
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £6,530 (2023 - £5,889) were payable to the fund at the balance sheet date and are included in creditors. Contributions made to the scheme have been disclosed in note 7 of the accounts.
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VARFELL FARMS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
Commitments under operating leases
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At 31 December 2024 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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During the year the company entered into transactions with related parties. The company has taken advantage of the exemption under FRS102 (33.1A) not to disclose transactions with fellow wholly owned subsidiaries.
Key Management compensation
The directors of the company have defined key management as the directors of the company and the farms manager. Key management salaries and other short term employee benefits totalled £148,393 (2023: £130,425).
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Yellow Holdings Ltd, a company incorporated in England and Wales, is the company's immediate parent and the parent undertaking of the smallest group within which the company belongs.
The ultimate parent and controlling company is Greosn Holdings Ltd, a company incorporated in England and Wales, and is the largest group to consolidate these results.
Copies of the Greosn Holdings Limited group accounts can be obtained from: Newlands, Pagham Road, Lagness, Chichester, West Sussex, PO20 1LL.
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