ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 30 SEPTEMBER 2021
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DIRECT PRODUCE SUPPLIES LIMITED
COMPANY INFORMATION
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DIRECT PRODUCE SUPPLIES LIMITED
CONTENTS
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DIRECT PRODUCE SUPPLIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
The directors present their strategic report, which is followed by the directors' report, together with the audited financial statements for the year ended 30 September 2021 for Direct Produce Supplies Limited "dps".
Having now operated during a pandemic for over 18 months it is prescient to recognise and congratulate the team who work in our organisation. Not only have they all worked incredibly hard and made innumerable personal sacrifices; their professionalism and commitment have allowed our group of companies to thrive through adversity. The core of the dps business is its people and they have shown more than ever that they are the difference between its success and failure.
These are unprecedented times in which to operate a global business. However, dps has continued to pursue its long-term strategy of diversifying its global interests coupled with risk mitigation; to deliver a long-term sustainable business structure. Despite the challenge of a fragmented and fractured global and local supply chain; dps has continued to succeed in its core activities and has continued to invest. By working in partnership with our customers we have maximised our integrated end to end supply chains to keep food availability at an exceptional level throughout the pandemic; whilst always ensuring the highest level of colleague safety in all our activities. The current reporting period has seen the business once again grow rapidly in turnover, profit, cash generation and the delivery of an enhanced asset base. Our transparent and fully integrated fresh produce supply model has had a very successful year as our open transparent, direct to grower model has been proven again to provide exceptional insight for our customers and our growers. This has allowed the dps to take increasing market share from its competition and has driven further and accelerated consolidation in the fresh produce market. The customer focused iterative model, aligned with our joint venture packing hubs has again seen industry leading service delivery for our customers and grower partners. We have now extended our product portfolio into other categories, and these should enhance the business value in the medium term. We continue to grow our supply chain capacity and look to improve our sustainability and efficiency as the global supply chain evolves at pace. The changes in supply, driven by supply security and robustness, will no doubt provide challenges as well as opportunities over the coming years. Whilst risk is ever present in the markets and countries that the Group operates, we undertake continuous analysis of said risk and implement iterative processes to mitigate this. It is evident as previously stated that the portfolio of companies and our intrinsic values have proven to be intimately aligned with our customers and have served us incredibly well in a very challenging period. Whilst compiling this report Coronavirus has had no significant impact on the Group’s activities. Demand for our services over the period have increased rapidly and this has continued post the year end and as of writing this report we continue to experience this. As always, our extremely talented management team is closely monitoring the situation and will act accordingly to mitigate any potential change in market conditions. Dps has grown significantly in the period and its continued evolution is above the plan set by the board and this rate of growth continues post year end. The Group’s financial position is very robust with excellent backing from the shareholders and financial institutions. Dps continues to be run by a talented, focused, and dedicated team of management who continue to deliver exceptional performance. We are extremely positive about how the Group is positioned and that the current performance and outlook for the future remains very encouraging.
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DIRECT PRODUCE SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
The Company's financial instruments principally comprise of trade debtors, cash at bank, trade creditors and intercompany loan facilities, the main purpose of which is to finance the company's operations. In addition, the Company has various other financial assets and liabilities arising directly from operations. It is, and has been throughout the year under review, the Company's policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Company's financial instruments are liquidity, credit and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies have remained unchanged throughout the period. Liquidity risk The Company manages its cash requirements to ensure the company has sufficient liquid resources to meet the operating needs of the business. Credit risk All debtors are subject to credit verification procedures by the Board. Debtors are reviewed on a regular basis and provisions are made for doubtful debts when necessary. Foreign currency risk The Company is exposed to exchange rate fluctuations particularly where goods are purchased in Euros. This is largely managed through hedging via use of currency forward contracts.
Section 172 Companies Act 2006 Statement
The directors consider that the decisions taken during the financial year comply with the requirements of s172(1) of the Companies Act 2006.
The success of our business is dependent on the support of all our stakeholders. It is imperative that our stakeholders share and live our values, working towards our goals to deliver long-term sustainable success for the business.
The directors of dps are mindful of the impact their decision may have on all our stakeholders and the consequent actions that are undertaken. Dps has individual management and board meetings where applicable. These teams then report into the Group board either via their Group board director or via other stakeholders who regularly report to this board. The board is well informed about the views of our stakeholders through many communication structures and uses this information to access the impact of the board decisions on each stakeholder Group. The key stakeholders in the Group and how we engage with them is detailed in the directors' report. Financial key performance indicators The key performance indicators of the Company are turnover, gross profit, profit before tax and net assets. A brief analysis of these is shown below:
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DIRECT PRODUCE SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
This report was approved by the board on 30 June 2022 and signed on its behalf.
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DIRECT PRODUCE SUPPLIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
The directors present their report and the financial statements for the year ended 30 September 2021.
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;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 £3,356 thousand (2020 -£3,238 thousand).
The directors proposed and paid a dividend of £Nil (2020 - £2,500 thousand) during the year.
The directors have highlighted in the strategic report on pages 1 - 3, a review of the current year results, future outlook expectations, risks and key performance indicators for the Company.
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DIRECT PRODUCE SUPPLIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Customers
We build strong long-term relationships with our customers and when possible, spend considerable time with them to listen to their needs, demands and views so that we can continually improve our business models. It is essential that our customers’ needs are intrinsic to the business models that operate through the Company as this is integral to evolve the long-term sustainable business we continually aspire to be. The nature of our business models mean that we see both the end consumer and our suppliers as equal and opposite ends of our supply chain. Consequently, they are all customers. Communities We are committed to operating responsibly and having a positive social impact within the communities in which we operate. As part of our commitment to ensure that no edible food is wasted in our supply chains, we have extended the scope of our redistribution partnerships to support those most at risk of food insecurity and to date have donated 6.7 million portions of fresh produce to redistribution charities FareShare and City Harvest. In addition, we continue to support communities through donations to cancer charities, use of the OLIO food sharing app and have coordinated several employee engagement activities, raising funds to develop a producer affiliated community organisation (Right to Care) in South Africa. Environmental Impact Through our commitment to the UN Sustainable Development goals and Champions 12.3 we aim to minimise our environmental impact wherever possible. We have committed to ambitious environmental targets focused on sustainably managing natural resources and eliminating waste. We regularly measure and monitor our performance against key metrics and continue to drive improvements, whilst recognising there is still much to do. Across the Group we have now removed 572,000 kg of hard to recycle or unnecessary packaging from our supply chain since 2018, reduced our annual food waste by 388,000 kg by sending inedible food to animal feed and reduced carbon emissions in manufacturing by 92% since 2016, through a transition to 100% renewable energy via REGO certificates. Inclusion & Development We are committed to ensuring trust, transparency, and the respect of human rights across the supply chain. The shareholders and stakeholders are implicit in their support of upholding the highest standards of ethical trade. We aim to fully understanding our supply chains, the human rights risks that may exist within them and take appropriate actions to ensure that all people are protected, respected, and treated fairly. We are proud of our public commitment and annual statements that demonstrate a continually evolving, zero-tolerance approach to modern slavery and human trafficking in all of its forms. We are Stronger Together Advanced Business Partners, Food Network for Ethical Trade (FNET) members and 100% of our high-risk suppliers are SEDEX audited. We nurture talent at all levels to develop the best people and continue to support the MDS programme. This year have a new commitment to advocate for women in leadership, through transparency in gender reporting across the global supply chain. Operating Responsibly Our strategy to operate responsibly across the Group is aligned to three impact pillars that are at the core of our values and align to the international blueprint for sustainability the UN Sustainable Development Goals. Product: We must protect food safety and integrity, whilst improving the impact of our product across the supply chain through innovation to eliminate food and packaging waste. We will collaborate and work in partnership to develop scalable solutions that can increase the circulatory of materials within the human consumption chain.
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DIRECT PRODUCE SUPPLIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Plant: We must work towards a zero-carbon future and be net zero by 2035. We recognise the importance of protecting soil, water, and biodiversity as the building blocks of life on our planet and it is essential that we continue to optimise water efficiency and promote soil health. Where possible we will evolve to low carbon precision production systems and maximise the yield for every metre of the planet we use, coupled with the lowest impact possible.
People: We support healthy eating in local communities and encourage the team to be healthy and happier. We must nurture talent at all levels and work in partnership with customers and suppliers to advocate for 30% of leadership positions to be occupied by women by 2030. All of the team should share in our success and be rewarded accordingly. This is underpinned by being ethical and transparent throughout the Group activities or simply put, operating responsibly.
There have been no significant events affecting the Company since the year end.
The auditors, Simmons Gainsford LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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DIRECT PRODUCE SUPPLIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIRECT PRODUCE SUPPLIES LIMITED
We have audited the financial statements of Direct Produce Supplies Limited (the 'Company') for the year ended 30 September 2021, 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).
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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our 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.
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DIRECT PRODUCE SUPPLIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIRECT PRODUCE SUPPLIES LIMITED (CONTINUED)
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.
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.
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:
In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered:
∙the results of our enquiries of management and those charged with governance of their assessment of the risks of fraud and irregularities;
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DIRECT PRODUCE SUPPLIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIRECT PRODUCE SUPPLIES LIMITED (CONTINUED)
∙the nature of the company, including its management structure and control systems (including the opportunity for management to override such controls);
∙management’s incentives and opportunities for fraudulent manipulation of the financial statements including the company’s remuneration and bonus policies and performance targets; and
∙the industry and environment in which it operates.
We also considered UK tax and pension legislation and laws and regulations relating to employment and the preparation and presentation of the financial statements such as the Companies Act 2006.
Based on this understanding we identified the following matters as being of significance to the entity:
∙laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, tax and pension legislation and distributable profits legislation;
∙the timing of the recognition of commercial income;
∙compliance with legislation relating to GDPR, health and safety and environmental legislation;
∙management bias in selecting accounting policies and determining estimates;
∙inappropriate journal entries; and
∙recoverability of debtors;
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised:
∙enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations;
∙enquiries with the same concerning any actual or potential litigation or claims;
∙discussion with the same regarding any known or suspected instances of non-compliance with laws and regulation and fraud;
∙inspection of relevant legal correspondence;
∙assessment of matters reported to management and the result of the subsequent investigation;
∙obtaining an understanding of the relevant controls during the period;
∙obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the year;
∙review documentation relating to compliance with the regulations;
∙challenging assumptions made by management in their specific accounting policies and estimates, in particular relation to purchase accruals and depreciation;
∙identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or crediting revenue or cash;
∙assessing the recovery of debtors in the period since the balance sheet date and challenging assumptions made by management regarding the recovery of balances which remain outstanding;
∙challenging key assumptions made by management
∙reviewing the financial statements for compliance with the relevant disclosure requirements;
∙performing analytical procedures to identify any unusual or unexpected relationships or unexpected movements in account balances which may be indicative of fraud;
∙reviewing the minutes of Board meetings and correspondence with HMRC;
∙evaluating the underlying business reasons for any unusual transactions; and
∙considered the implementation of controls during the year.
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DIRECT PRODUCE SUPPLIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIRECT PRODUCE SUPPLIES LIMITED (CONTINUED)
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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
33 Cavendish Square
W1G 0PW
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DIRECT PRODUCE SUPPLIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2021
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DIRECT PRODUCE SUPPLIES LIMITED
REGISTERED NUMBER: 01336601
BALANCE SHEET
AS AT 30 SEPTEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 14 to 27 form part of these financial statements.
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DIRECT PRODUCE SUPPLIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
The company is a private company limited by shares, and is incorporated in England and Wales. The address of its registered office is 14th Floor, 33 Cavendish Square, London, W1G 0PW. The principal trading address is 57-63 Church Road, Wimbledon, London, SW19 5SB.
2.Accounting policies
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:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Terradace Holdings Limited as at 30 September 2021 and these financial statements may be obtained from 14th Floor, 33 Cavendish Square, London, W1G 0PW.
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line and reducing balance method.
The estimated useful lives range as follows:
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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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
2.Accounting policies (continued)
The Company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans from related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other debtors and creditors, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade creditors or debtors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Profit and loss account. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date. Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Financial liabilities and equity instruments are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form. Financial liabilities, including trade and other payables, bank loans, loans from fellow group companies, are initially measured at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate method. A liability is derecognised when the contract that gives rise to it is settled, sold, cancelled or expires. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The company uses derivative financial instruments, in particular forward currency contracts, to manage the financial risks associated with the company's activities and the financing of those activities. The company does not undertake any trading activities in financial instruments.
Forward exchange contracts are used to hedge foreign exchange exposures arising on forecast payments in foreign currencies. At maturity or when the contract ceases to be a hedge, gains and losses are taken to the profit and loss account. At each period end forward foreign exchange contracts are fair valued by comparing the position of the contract to the market to market value. All material gains or losses are taken to the profit and loss account.
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
2.Accounting policies (continued)
The company makes estimates and assumptions concerning the future. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. The directors consider there to be no significant areas of judgments or key sources of estimation uncertainty.
The total turnover of the company for the year has been derived from the sale of goods as per its principal activity.
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Page 20
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Page 21
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
10.Taxation (continued)
On 3 March 2021, the Government announced an increase in the rate of corporation tax to 25% from 1 April 2023 on all profits when they exceed £250,000 and this change in rate was enacted on 10 June 2021. The effect of this change on the net deferred tax balances carried forward will not be material for the financial statements.
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Page 23
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Page 24
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Page 25
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
16.Deferred taxation (continued)
The company has entered into forward currency contracts amounting to £141,944,003 (2020 - £76,625,000) as at the balance sheet date.
At the balance sheet date the company had entered into group bank cross guarantees in respect of various loans and overdrafts. At the balance sheet date the total contingent liability attributable to this company amounted to £12,340,941 (2020 - £830,012).
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DIRECT PRODUCE SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
B Fresh Group Limited is considered to be the company's immediate parent undertaking in both the current and prior year.
P Beaumont is considered to be the ultimate controlling party by virtue of his shareholding in Terradace Holdings Limited during the current and prior year. The results of the company are included within the consolidated accounts of Terradace Holdings Limited which are available to the public and may be obtained from 14th Floor, 33 Cavendish Square, London, W1G 0PW.
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