HOB Farms Limited - Limited company accounts 20.1

REGISTERED NUMBER: 08330209 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2021

FOR

HOB FARMS LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Profit and Loss Account

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

18

DIRECTORS:

P E Osborne

D B Byrd

S J Houghton

REGISTERED OFFICE:

Ascot Road

Pershore

Worcestershire

WR10 2JJ

REGISTERED NUMBER:

08330209 (England and Wales)

AUDITORS:

Kingscott Dix (Cheltenham) Limited

Statutory Auditor

Chartered Accountants

Malvern View Business Park

Stella Way

Bishops Cleeve

Cheltenham

Gloucestershire

GL52 7DQ

The directors present their strategic report of the company and the group for the year ended 31 January 2021.

REVIEW OF BUSINESS

The group achieved a pre-tax profit of £(291,203) compared with £751,155 in the previous year. At 31 January 2021 shareholders funds were £814,472 compared with £1,320,817 last year.

PRINCIPAL RISKS AND UNCERTAINTIES

Principal risks and uncertainties facing the company include: the Covid-19 pandemic and resulting restrictions and social distancing measures; the general difficult trading conditions the economy presents; and uncertainty as to exchange rate variations which affects the acquisition price of some of the company's purchases.

KEY PERFORMANCE INDICATORS

Key performance indicators that are focused on by management include Turnover, Direct costs, and Overheads. Each of these are reviewed regularly by management against the budget and prior periods. The directors are pleased with the performance of the group during the year with regard the indicators above.

ON BEHALF OF THE BOARD:

P E Osborne - Director

6 August 2021

The directors present their report with the financial statements of the company and the group for the year ended 31 January 2021.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the marketing and distribution of fruit and vegetables.

DIVIDENDS

Interim dividends per share were paid as follows:

23000

- 1 February 2020

23001

- 1 March 2020

23000

- 1 April 2020

23001

- 1 May 2020

23000

- 1 June 2020

23001

- 1 July 2020

23000

- 1 August 2020

23001

- 1 September 2020

23000

- 1 October 2020

23001

- 1 November 2020

23000

- 1 December 2020

23001

- 1 January 2021

276006

The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 January 2021 will be £ 276,006 .

FUTURE DEVELOPMENTS

As Covid-19 regulations and social distancing measures have eased, demand for fresh produce has increased. The

trading results for the current year are showing a return to profitability.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 February 2020 to the date of this report.

P E Osborne

D B Byrd

S J Houghton

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Kingscott Dix (Cheltenham) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

P E Osborne - Director

6 August 2021

Opinion

We have audited the financial statements of HOB Farms Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2021 which comprise the Consolidated Profit and Loss Account, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, 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 group's and of the parent company affairs as at 31 January 2021 and of the group's loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the 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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages three and four, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from: our commercial and sector experience; our accountancy and tax knowledge; inspection of the Company's relevant correspondence; a review of Companies House filings; and discussions with the Directors. We discussed laws and regulations throughout our team and remained alert to any indication of non-compliance throughout the audit. The potential effect of the law and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation, distributable profits legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts disclosed in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: food safety, health and safety, GDPR, and employment laws and regulations, recognising the nature of the Company's activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiries of management, and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. As with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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 Report of the Auditors.

Use of our report

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

Gwyneth Milner (Senior Statutory Auditor)

for and on behalf of Kingscott Dix (Cheltenham) Limited

Statutory Auditor

Chartered Accountants

Malvern View Business Park

Stella Way

Bishops Cleeve

Cheltenham

Gloucestershire

GL52 7DQ

6 August 2021

TURNOVER

3

18,687,697

28,285,881

Cost of sales

(15,753,773

)

(23,593,862

)

GROSS PROFIT

2,933,924

4,692,019

Administrative expenses

(3,599,790

)

(3,890,165

)

(665,866

)

801,854

Other operating income

428,041

21,800

OPERATING (LOSS)/PROFIT

5

(237,825

)

823,654

Interest payable and similar expenses

6

(53,378

)

(72,499

)

(LOSS)/PROFIT BEFORE TAXATION

(291,203

)

751,155

Tax on (loss)/profit

7

60,864

(134,558

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(230,339

)

616,597

(Loss)/profit attributable to:

Owners of the parent

(230,339

)

616,597

(LOSS)/PROFIT FOR THE YEAR

(230,339

)

616,597

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(230,339

)

616,597

Total comprehensive income attributable to:

Owners of the parent

(230,339

)

616,597

FIXED ASSETS

Intangible assets

10

185,051

228,593

Tangible assets

11

1,401,289

1,645,737

Investments

12

-

-

1,586,340

1,874,330

CURRENT ASSETS

Stocks

13

152,330

222,602

Debtors

14

1,935,400

3,641,307

Cash at bank and in hand

253,067

665,395

2,340,797

4,529,304

CREDITORS

Amounts falling due within one year

15

(2,287,892

)

(4,054,416

)

NET CURRENT ASSETS

52,905

474,888

TOTAL ASSETS LESS CURRENT LIABILITIES

1,639,245

2,349,218

CREDITORS

Amounts falling due after more than one year

16

(738,333

)

(937,001

)

PROVISIONS FOR LIABILITIES

20

(86,440

)

(91,400

)

NET ASSETS

814,472

1,320,817

CAPITAL AND RESERVES

Called up share capital

21

100

100

Retained earnings

22

814,372

1,320,717

SHAREHOLDERS' FUNDS

814,472

1,320,817

The financial statements were approved by the Board of Directors and authorised for issue on 6 August 2021 and were signed on its behalf by:

P E Osborne - Director

D B Byrd - Director

S J Houghton - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

-

-

Investments

12

1,436,000

1,611,500

1,436,000

1,611,500

CURRENT ASSETS

Debtors

14

-

54,000

Cash at bank and in hand

70,778

15,820

70,778

69,820

CREDITORS

Amounts falling due within one year

15

(253,733

)

(359,653

)

NET CURRENT LIABILITIES

(182,955

)

(289,833

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,253,045

1,321,667

CREDITORS

Amounts falling due after more than one year

16

(623,871

)

(816,927

)

NET ASSETS

629,174

504,740

CAPITAL AND RESERVES

Called up share capital

21

100

100

Retained earnings

22

629,074

504,640

SHAREHOLDERS' FUNDS

629,174

504,740

Company's profit for the financial year

400,440

423,342

The financial statements were approved by the Board of Directors and authorised for issue on 6 August 2021 and were signed on its behalf by:

P E Osborne - Director

D B Byrd - Director

S J Houghton - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 February 2019

100

980,125

980,225

Changes in equity

Dividends

-

(276,005

)

(276,005

)

Total comprehensive income

-

616,597

616,597

Balance at 31 January 2020

100

1,320,717

1,320,817

Changes in equity

Dividends

-

(276,006

)

(276,006

)

Total comprehensive income

-

(230,339

)

(230,339

)

Balance at 31 January 2021

100

814,372

814,472

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 February 2019

100

357,303

357,403

Changes in equity

Dividends

-

(276,005

)

(276,005

)

Total comprehensive income

-

423,342

423,342

Balance at 31 January 2020

100

504,640

504,740

Changes in equity

Dividends

-

(276,006

)

(276,006

)

Total comprehensive income

-

400,440

400,440

Balance at 31 January 2021

100

629,074

629,174

Cash flows from operating activities

Cash generated from operations

1

829,206

1,335,228

Interest paid

(46,258

)

(64,489

)

Interest element of hire purchase payments paid

(7,120

)

(8,010

)

Tax paid

(84,191

)

(91,471

)

Net cash from operating activities

691,637

1,171,258

Cash flows from investing activities

Purchase of tangible fixed assets

(27,430

)

(162,774

)

Sale of tangible fixed assets

41,064

37,322

Net cash from investing activities

13,634

(125,452

)

Cash flows from financing activities

Loan repayments in year

(176,311

)

(167,730

)

HP capital repayments in year

(199,411

)

(233,965

)

Equity dividends paid

(276,006

)

(276,005

)

Net cash from financing activities

(651,728

)

(677,700

)

Increase in cash and cash equivalents

53,543

368,106

Cash and cash equivalents at beginning of year

2

199,524

(168,582

)

Cash and cash equivalents at end of year

2

253,067

199,524

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

(Loss)/profit before taxation

(291,203

)

751,155

Depreciation charges

466,916

498,670

Loss on disposal of fixed assets

32,710

10,070

Finance costs

53,378

72,499

261,801

1,332,394

Decrease in stocks

70,272

7,108

Decrease in trade and other debtors

1,724,203

102,612

Decrease in trade and other creditors

(1,227,070

)

(106,886

)

Cash generated from operations

829,206

1,335,228

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 January 2021

31.1.21

1.2.20

£

£

Cash and cash equivalents

253,067

665,395

Bank overdrafts

-

(465,871

)

253,067

199,524

Year ended 31 January 2020

31.1.20

1.2.19

£

£

Cash and cash equivalents

665,395

388,407

Bank overdrafts

(465,871

)

(556,989

)

199,524

(168,582

)

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.2.20

Cash flow

changes

At 31.1.21

£

£

£

£

Net cash

Cash at bank

and in hand

665,395

(412,328

)

253,067

Bank overdrafts

(465,871

)

465,871

-

199,524

53,543

253,067

Debt

Finance leases

(244,395

)

199,411

-

(270,254

)

Debts falling due

within 1 year

(159,566

)

(16,745

)

-

(176,311

)

Debts falling due

after 1 year

(816,927

)

193,056

-

(623,871

)

(1,220,888

)

375,722

-

(1,070,436

)

Total

(1,021,364

)

429,265

-

(817,369

)

1.	STATUTORY INFORMATION

HOB Farms Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

The directors are of the opinion that there are no significant judgements or estimations used in preparing the financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Produce sales are recognised when orders leave the warehouse. Haulage sales are recognised when the delivery is made.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2016, is being amortised evenly over its estimated useful life of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

20% on reducing balance

Motor vehicles

-

25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.