ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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TERRADACE HOLDINGS LIMITED
COMPANY INFORMATION
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TERRADACE HOLDINGS LIMITED
CONTENTS
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TERRADACE HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 2020.
The principal activity is that of a holding company.
Whilst recognising the unprecedented times in which it operates, the Group 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. In the period, the Group has seen recent major acquisitions thrive and has continued to invest in integrated end to end supply chains; unique joint ventures; innovative agriculture; land acquisition and innovative energy extraction techniques. Whist many parts of the economy have suffered terribly during the pandemic, the Group’s strategy of open customer focused business models has served it particularly well. This has been further augmented by the growth in at home food consumption and the move back to big shop retailers and the explosion in online shopping. 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. Within the period the Group has been able to maximise the success of the significant acquisition it made in the previous period and has made strategic investments that have enhanced the portfolio and will lead to continued improvement in performance both in the medium and long term. All investments and acquisitions that have been made are aligned to the core business strategy and build on the knowledge, skills, and talent inherent within the business. The subsidiaries of the Group in the period are listed in note 16 to the accounts. Our transparent and fully integrated fresh produce supply model has had an incredibly successful year as our open transparent, direct to grower model has been proven to provide exceptional insight for our customers and our growers. This has allowed the Group 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 hub has again seen significant improvements in the service delivery for our customers and grower partners. We have invested with our joint venture partners in a second packing facility that was delivered on time and on budget. This second facility is already reaching capacity, another example of how effective the model has become. The Group companies associated with core agriculture continue to evolve at pace in the period. The Group began construction of Europe’s largest vertical farm which will see ground-breaking agriculture technology delivered at scale in 2021. Furthermore, this is coupled with planting of up to 50 hectares of unique varieties as part of a major international joint venture. We are now seeing the crystallisation of our investment in unique varieties and innovative agricultural systems to evolve UK production. However, it is now evident that the continued change in the global climate is having an immediate impact on high-risk conventional agriculture. It is the Groups intention to move where applicable to an agricultural model that operates exclusively in protected environments. The Group has secured additional sites for the rapid expansion of its vertical farming technology and will look to expand at pace both within the UK and internationally. The business believes it is at the cutting edge of new agricultural technology and will be pursuing a patent to protect this revolutionary technology. Given the overall business environment this area presents a very significant opportunity. All the investments in this area are intrinsic to our goals of long-term sustainability and minimising environmental impacts.
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TERRADACE HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
The Group continues to build a large selection of resource opportunities to evolve the geological and energy generation Group companies. Currently the Group is pursuing a mixture of exploitation opportunities for positive cash generation and an industry disruptive exploration model to generate significant asset value. This is in addition to the acquisition of significant acreages of land in the period. Additionally, in the period the Group has again proven the scientific efficacy of its energy strategy and will continue to exploit this once the geopolitical position is more certain. The Group has an effective plan for the next three years and will undertake a strategic business review in this area at the end of that period. 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. The Group 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. We will continue with our considered investment approach underpinned by a very healthy and vibrant Group of businesses. The Group 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.
The Group's financial instruments principally comprise of trade debtors, cash at bank, trade creditors and bank loan facilities, the main purpose of which is to finance the Group's operations. In addition, the Group has various other financial assets and liabilities arising directly from operations. It is, and has been throughout the period under review, the Group's policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group's financial instruments are interest, liquidity, credit, and foreign exchange 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. Interest rate risk The Group is exposed to cash flow interest rate risk on its floating rate borrowings. All significant borrowings are in sterling. Liquidity risk The Group manages its borrowings 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 exchange risk The Group 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.
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TERRADACE HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 Group 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 Group.
The Group consists of a number of companies all of which engage iteratively with their individual stakeholders as well as other businesses in the Group. The strategy for the Group is consistent throughout and is widely publicised at each of the business operating sites and features in all Group communication. It is important that the decision-making process is delegated to the individual Group companies coupled with a governance framework that keeps the individual leadership teams mindful of the long-term view and consistent with our values. The directors of the individual companies and the Group itself are mindful of the impact their decision may have on all our stakeholders and the consequent actions that are undertaken. The Group 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. At a Group level 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 Group are turnover, gross profit, profit before tax and net assets. A brief analysis of these is shown below:
This report was approved by the board on 29 June 2021 and signed on its behalf.
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TERRADACE HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
The directors present their report and the financial statements for the year ended 30 September 2020.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £18,833,826 (2019 - £14,921,912).
The directors proposed and paid a dividend of £8,011,603 (2019 - £5,415,745) 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.
The directors who served during the year were:
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 Group as this is
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TERRADACE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 Operating responsibly and consequently engaging with and being part of the communities in which we operate is a fundamental part of our business values. As part of our commitment to reduce the food waste in our supply chains, we have donated 2 million portions of potential food waste to the FareShare charity to help support less fortunate members of our communities. In addition, we have supported 4 local charities with 16,000 portions of fruit, donated to cancer charities and the NHS and supported the child poverty taskforce in addition to the homeless at Christmas. Environmental impact Wherever possible we are reducing our environmental impact as our commitment to champions 12.3 and because it is the responsible thing to do. Many of these initiatives are now gaining significant momentum. We are committed to some very stretching targets, and we have measured our impact against these and have achieved some remarkable success albeit there is still much to do. As of now we have removed 445,000 kg of packaging from our supply chain, reduced our waste by 200,000 kgs and moved to 100% renewable energy via REGO certificates. Additionally, it is likely our new vertical farm will have a dramatically reduced carbon and environmental footprint and will further enhance our commitment to the environment in all points of our supply chain.
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TERRADACE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Development and inclusion
We consistently work towards delivering a supply chain where trust and transparency are constantly improved. The shareholders and stakeholders are implicit in their support of our ethical trade and human rights strategy and have evolved and are proud of our public commitment and statements around our zero-tolerance approach to modern slavery in all its forms. We are stronger together business partners, FNET members and our supply base is 100% SEDEX audited. Operating Responsibly We monitor all the Group’s activity to ensure we operate responsibly. This is aligned with the three pillars that are at the core of our values. Product: We must moderate and improve the impact our product has within its supply chain by eradicating waste, removing all unnecessary packaging and ensuring our supply chains are safe and ethical. Planet: We must work towards a zero-carbon future and be net zero by 2030. Additionally, soil and water are the building blocks of life on our planet, and it is essential we optimise water usage efficiency and promote soil health. Where possible we 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 all our communities and encourage the team to be healthy and happier. We must nurture new talent and provide the support and skills development. All 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, acting responsibly.
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TERRADACE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Reporting Methodology
This report follows the Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance. The Department for Business, Energy & Industrial Strategy’s (BEIS) 2019 and 2020 conversion factors have been used to calculate the kgCO2e from electricity, water and fuel consumption. The financial control approach has been used.
Energy Efficient Actions During Reporting Year
As already noted in this report the Group has taken a number of initiatives to reduce energy consumption including moving to renewable energy sources. In addition, the Group has further reduced energy consumption by installing and purchasing energy efficient plant and machinery and within the agriculture part of the Group has established systems to harvest rainwater and installed additional moisture sensors to ensure irrigation is only used when needed.
Intensity Measurement
The intensity metric chosen is kgCO2e per £ of revenue. The Group total is 0.00045 kgCO2e/£revenue.
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TERRADACE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
There have been no significant events affecting the Group 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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TERRADACE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TERRADACE HOLDINGS LIMITED
We have audited the financial statements of Terradace Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 September 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Group 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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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TERRADACE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TERRADACE HOLDINGS LIMITED (CONTINUED)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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TERRADACE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TERRADACE HOLDINGS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
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
7-10 Chandos Street
W1G 9DQ
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TERRADACE HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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TERRADACE HOLDINGS LIMITED
REGISTERED NUMBER: 08239135
CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2020
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TERRADACE HOLDINGS LIMITED
REGISTERED NUMBER: 08239135
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 22 to 48 form part of these financial statements.
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TERRADACE HOLDINGS LIMITED
REGISTERED NUMBER: 08239135
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2020
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £18,104,943 (2019 - £11,898,102).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 22 to 48 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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TERRADACE HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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TERRADACE HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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TERRADACE HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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TERRADACE HOLDINGS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
The company is a private company limited by shares, and is incorporated in England and Wales. The address of its registered office is 4th Floor, 7/10 Chandos Street, London, W1G 9DQ. 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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Parent Company disclosure exemptions
In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙Only one reconciliation of the number of shares outstanding at the beginning and end of the year has been presented as the reconciliation for the Company and the parent Company would be identical;
∙No Statement of Cash Flows has been presented for the parent Company;
∙Disclosures in respect of the parent Company's financial instruments have not been presented as equivalent disclosures have been provided in respect of the Company as a whole; and
∙No disclosures have been given for the aggregate remuneration of the key management personnel of the parent Company as their remuneration is included in the totals for the Company as a whole.
The following principal accounting policies have been applied:
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 October 2014. Turnover from the sale of goods is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Turnover is recognised when goods have been dispatched.
Page 23
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
Intangible assets
Intangible assets, other than goodwill, are stated at historical cost less accumulated amortisation and any accumulated impairment losses. Intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a business combination is measured at fair value at the date of acquisition and is recognised separately from goodwill if the asset is separable or arises from contractual or other legal rights. All intangible assets are amortised on a straight line basis to Administrative expenses in the Consolidated Statement of Comprehensive Income over its useful economic life. 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 expected useful lives of assets are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively. 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 the Group's share 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 Administrative expenses in the Consolidated Statement of Comprehensive Income over its useful economic life. Gas & Oil rights Gas & Oil rights include expenditure on the exploration for and evaluation of oil. Amortisation is provided on a straight line basis over their useful economic life following start of exploration. Exploration licence costs are capitalised within intangible assets and are reviewed at each reporting date to confirm that there is no indication that the carrying amount exceeds the recoverable amount.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Page 24
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line or 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.
Depreciation is only provided on Growing stock once they are bearing fruit suitable for commercial
purposes.
Page 25
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
The Group enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, finance leases, and loans from related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts 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 creditors or debtors within one year, typically trade payables or receivables, 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 Group 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.
Page 26
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Page 27
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group 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.
Page 28
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
The group uses derivative financial instruments, in particular forward currency contracts, to manage the financial risks associated with the group's activities and the financing of those activities. The group 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 a 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 mark-to-market value. All material gains or losses are taken to the profit and loss account.
In accordance with FRS 102 S9.33, assets and liabilities held by the EBT are consolidated within the accounts of the company. Any assets held by the EBT cease to be recognised on the company balance sheet when the assets vest unconditionally to identified beneficiaries.
Page 29
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
2.Accounting policies (continued)
project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The group 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 Group for the year has been derived from the sale of goods as per its principal activity.
All turnover arose within the United Kingdom.
Page 30
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 31
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 32
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 33
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
13.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.
Page 34
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 35
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Page 36
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15.Tangible fixed assets (continued)
Page 37
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 38
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 39
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 40
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 41
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Subsidiary undertakings (continued)
Page 42
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 43
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Included in creditors falling due after more than one year is a mortgage loan of £581,708 (2019 - £624,354) repayable after more than five years, with an interest rate per annum of 2% over the Bank of England Base Rate. The mortgage has a term of twenty years from September 2016 and will be repaid by equal monthly installments inclusive of interest over the term.
Page 44
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 45
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Group
The group has entered into forward currency contracts amounting to £76,625,332 (2019 - £93,594,835) as at the balance sheet. Company At the balance sheet date the company had entered into a group bank cross guarantee in respect of loans and overdrafts. At the balance sheet date the total contingent liability attributable to this company amounted to £830,012 (2019 - £872,325).
Page 46
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Page 47
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TERRADACE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
The financial statements incorporate the following assets and liabilities which are owned by the Terradace Employee Benefit Trust (EBT). The EBT is controlled by the company's directors and its assets and liabilities are included in the financial statements as required by FRS 102 S 9.33 as follows:
Investment £1,382,316 (2019 - £1,849,957) Cash £1,603,583 (2019 - £352,878)
The Group considers P Beaumont, a director of the company, to be the ultimate controlling party by virtue of his shareholding in the company in both the current and prior year.
Page 48
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