ALAN_BAYBUTT_&_SONS_LIMIT - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Alan Baybutt & Sons Limited is a private company limited by shares incorporated in England and Wales. The registered office is 467 Moss Lane, Hesketh Bank, Preston, PR4 6XJ.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company’s growing and distribution activities have not been significantly affected by the Covid-19 pandemic with the main impact being restrictions on visitors to the site for health and safety reasons. The company has retained its close links with key customers who are looking to source goods from the next cycle of crops. true

Past concerns over the restrictions on movements of seasonal employees from certain European countries were not fulfilled. The company made use of Government approved schemes to secure appropriate levels of labour for the Summer of 2021. At the time of approving the financial statements, the directors have also secured sufficient labour to harvest its crops in the upcoming Summer season.

Taking all of this into account, along with the budgets prepared and evidence obtained from interim accounts, the directors have at the time of approving the financial statements every expectation that the company has adequate resources to continue in operational existence for the foreseeable future and at the very least, greater than one year from the date of the audit report. As a consequence they continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. 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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Determining the year end stock value requires estimation of the quantities of items in the ground at the year end which were yielded and sold post year end. Information on post year end yields is available and can be used with the directors' knowledge of sowing periods to obtain a materially correct estimate of the quantities which were sown pre year end.

The average monthly number of persons (including directors) employed by the company during the year was:

Creditors falling due within one year totalling £1,390,935 (2020: £946,464) have been secured by the company by way of a cross-company unlimited guarantee as disclosed in note 10, fixed and floating charges over company assets and a personal guarantee from the directors.

Creditors falling due after more than one year totalling £591,109 (2020: £nil) have been secured by the company by way of a cross-company unlimited guarantee as disclosed in note 10 to the financial statements, along with fixed and floating charges over company assets.

Each class of shares ranks pari passu in all respects save for:

a) Upon a return of capital, where the residual assets (if any) up to £1,400,000 shall be distributed equally amongst all holders of Ordinary A shares. Any residual net assets in excess of £1,400,000 shall be distributed amongst all holders of Ordinary A and Ordinary G shares.

b) Upon a sale of the entire issued share capital of the company to a third party, where any consideration up to £1,400,000 will be allocated to the holders of the Ordinary A share, pro rata to the number of shares held by each individual. Ordinary G shareholders shall receive par value only. Where any element of consideration exceeds £1,400,000, this shall be allocated to the holders of Ordinary A and Ordinary G shares, pro rata to the number of shares held by each individual.

c) Ordinary G shares do not confer a right to attend or to vote at any meeting of shareholders.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was qualified and the auditor reported as follows:

Qualified opinion on financial statements

We have audited the financial statements of Alan Baybutt & Sons Limited (the 'company') for the year ended 30 April 2021 which comprise , the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the financial statements:

•     give a true and fair view of the state of the company's affairs as at 30 April 2021 and of its 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 qualified opinion

In carrying out our audit work on the prior year balances at 30 April 2020, we were not able to obtain sufficient appropriate audit evidence to verify the existence of Stock balances included in the comparative balance sheet at £677,949, and consequently to form an opinion on whether these balances contained misstatements which materially affect the statement of income and retained earnings within the financial statements for the year ended 30 April 2021.

In carrying out our audit work on the balances at 30 April 2021, we have not been able to obtain sufficient appropriate audit evidence to verify the existence of Stock balances of £628,337 included in the balance sheet at 30 April 2021, and consequently to form an opinion on whether these balances contain misstatements which materially affect the financial statements for the year ended 30 April 2021.

The sole reason behind this limitation of scope at each of 30 April 2020 and 30 April 2021 is the Covid-19 pandemic. The country was living under government directed 'lockdown' conditions at the prior year end and for some time afterwards. In addition, the company's operations dictate that the highest standard of hygiene measures are applied at all times. It was therefore not practicable for us to attend site and conduct period end physical verification measures at both 30 April 2020 and 30 April 2021. Owing to the nature of the stock base, alternative procedures to provide the necessary evidence were ultimately not able to be completed to the necessary degree.

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 Auditor's 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 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 qualified opinion.

A cross-company unlimited guarantee is in place in favour of the company's bankers between the company, Baybutt Holdings Limited and Baybutt Investments Limited.

At the balance sheet date, other group company borrowings payable to the company's bankers totalled £5,613,422 (2020: £5,873,312).

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

The only group for which consolidated accounts are prepared, of which this company is a member, is the group headed by Baybutt Investments Limited. The registered office address of Baybutt Investments Limited is 467 Moss Lane, Hesketh Bank, Preston, PR4 6XJ. Copies of the group accounts can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ or the company's registered office.