Farndon Fields Farm Limited - Limited company accounts 17.3

REGISTERED NUMBER: 00782122 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 March 2017

for

Farndon Fields Farm Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Profit and Loss Account

6

Statement of Comprehensive Income

0

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Financial Statements

10

DIRECTORS:

Mr K P Stokes

Mrs H M Stokes

SECRETARY:

Mrs H M Stokes

REGISTERED OFFICE:

Farndon Fields Farm

Farndon Road

Market Harborough

Leicestershire

LE16 9NP

REGISTERED NUMBER:

00782122 (England and Wales)

AUDITORS:

Torr Waterfield Limited

Statutory Auditor

Park House

37 Clarence Street

Leicester

Leicestershire

LE1 3RW

The directors present their strategic report for the year ended 31 March 2017.

REVIEW OF BUSINESS

The principal activity of the company remains that of farming and farm retailing.

The directors use a number of performance indicators, both financial and non-financial, to evaluate the company's

performance. However, gross profit and net profit are of primary importance in ensuring the successful management of

the company.

The project to extend and improve the company's restaurant and cafe facility was completed in July 2015, so these

results include a full year's operation for the first time. It has proved very popular with customers as well as being

awarded 'Farm Restaurant of the Year' for 2016 by the National Farmers' Retail & Markets Association.

Gross profit for the year increased from £1,700,233 to £1,928,631 and this was partly due to the contribution from the

new restaurant and cafe. Net profit before tax was very similar at £313,915 (2016: £315,478).

At the year end the directors consider the company to be in a strong financial position with net assets increasing from

£2,949,188 to £3,139,022. They do not anticipate any significant changes to the company's business in the coming year.

The directors' philosophy continues to be that they offer their customers fresh produce with low food miles. To this end

they source, wherever possible, from their own farm, from other local farmers and producers and from quality suppliers

in the UK.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider that the company has potential risks and uncertainties similar to those faced by other companies

in the sector namely retaining the loyalty of its customers and suppliers. For customers this is addressed by maintaining a

constant focus on quality of product and high service levels. Supply risk is managed by maintaining good business

relationships with suppliers.

FINANCIAL INSTRUMENTS

The company does not actively use financial instruments as part of its risk management. It is exposed to the usual credit

risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature

of its financial instruments means that they are not subject to price risk or liquidity risk.

FUTURE DEVELOPMENTS

The directors consider that the company's market place will remain competitive for the foreseeable future. However

they believe that with its quality product, high level of service and strong management team the company is well placed

to take advantage of every opportunity during that time.

ON BEHALF OF THE BOARD:

Mrs H M Stokes - Secretary

8 November 2017

The directors present their report with the financial statements of the company for the year ended 31 March 2017.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2017 will be £ 50,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2016 to the date of this report.

Mr K P Stokes

Mrs H M Stokes

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 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 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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 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 company'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

company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mrs H M Stokes - Secretary

8 November 2017

We have audited the financial statements of Farndon Fields Farm Limited for the year ended 31 March 2017 on pages

six to twenty. The financial reporting framework that has been applied in their preparation is 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'.

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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.

This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and

have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by

the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with

the audited financial statements and to identify any information that is apparently materially incorrect based on, or

materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2017 and of its profit for the year then ended;

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

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

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit, the information given in the 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 has been prepared in accordance with applicable legal requirements. In the light of the

knowledge and understanding of the company and its environment, we have not identified any material misstatements in

the Strategic Report or the Report of the Directors.

Matters on which we are required to report by exception

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, or returns adequate for our audit have not been received from branches not visited by us; or

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

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

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

Mark Andrew Torr FCCA (Senior Statutory Auditor)

for and on behalf of Torr Waterfield Limited

Statutory Auditor

Park House

37 Clarence Street

Leicester

Leicestershire

LE1 3RW

8 November 2017

TURNOVER

4,263,393

3,614,294

Cost of sales

2,334,762

1,914,061

GROSS PROFIT

1,928,631

1,700,233

Administrative expenses

1,624,864

1,372,896

303,767

327,337

Other operating income

23,410

3,363

OPERATING PROFIT

6

327,177

330,700

Interest receivable and similar income

-

2,258

327,177

332,958

Interest payable and similar expenses

7

13,262

17,480

PROFIT BEFORE TAXATION

313,915

315,478

Tax on profit

8

74,081

76,085

PROFIT FOR THE FINANCIAL YEAR

239,834

239,393

FIXED ASSETS

Intangible assets

10

-

3,602

Tangible assets

11

4,419,761

4,422,088

4,419,761

4,425,690

CURRENT ASSETS

Stocks

12

308,935

268,555

Debtors

13

83,356

27,579

Cash at bank and in hand

545,239

538,481

937,530

834,615

CREDITORS

Amounts falling due within one year

14

1,336,373

1,257,729

NET CURRENT LIABILITIES

(398,843

)

(423,114

)

TOTAL ASSETS LESS CURRENT LIABILITIES

4,020,918

4,002,576

CREDITORS

Amounts falling due after more than one year

15

(679,499

)

(862,009

)

PROVISIONS FOR LIABILITIES

19

(202,397

)

(191,379

)

NET ASSETS

3,139,022

2,949,188

CAPITAL AND RESERVES

Called up share capital

20

7,300

7,300

Capital redemption reserve

21

2,700

2,700

Retained earnings

21

3,129,022

2,939,188

SHAREHOLDERS' FUNDS

3,139,022

2,949,188

The financial statements were approved and authorised for issue by the Board of Directors on 8 November 2017 and were signed on its behalf by:

Mr K P Stokes - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2015

7,300

2,744,795

2,700

2,754,795

Changes in equity

Dividends

-

(45,000

)

-

(45,000

)

Total comprehensive income

-

239,393

-

239,393

Balance at 31 March 2016

7,300

2,939,188

2,700

2,949,188

Changes in equity

Dividends

-

(50,000

)

-

(50,000

)

Total comprehensive income

-

239,834

-

239,834

Balance at 31 March 2017

7,300

3,129,022

2,700

3,139,022

Cash flows from operating activities

Cash generated from operations

23

397,331

538,488

Interest paid

(13,262

)

(17,405

)

Interest element of hire purchase or finance lease rental payments paid

-

(75

)

Tax paid

(67,637

)

(7,968

)

Interest received

-

2,258

Net cash from operating activities

316,432

515,298

Cash flows from investing activities

Purchase of tangible fixed assets

(158,905

)

(268,286

)

Sale of tangible fixed assets

5,000

5,500

Net cash from investing activities

(153,905

)

(262,786

)

Cash flows from financing activities

Loan repayments in year

(179,845

)

(175,433

)

Capital repayments in year

-

(18,192

)

Amount introduced by directors

74,076

74,786

Amount withdrawn by directors

-

(2,289

)

Equity dividends paid

(50,000

)

(45,000

)

Net cash from financing activities

(155,769

)

(166,128

)

Increase in cash and cash equivalents

6,758

86,384

Cash and cash equivalents at beginning of year

24

538,481

452,097

Cash and cash equivalents at end of year

24

545,239

538,481

1.	COMPANY INFORMATION

Farndon Fields Farm Limited is a private company limited by shares and is incorporated in England and Wales.

The address of its registered office is Farndon Fields Farm, Farndon Road, Market Harborough, Leicestershire

LE16 9NP.

2.	STATUTORY INFORMATION

Farndon Fields Farm 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 Company Information page.

3.	STATEMENT OF COMPLIANCE

The financial statements of Farndon Fields Farm Limited have been prepared in accordance with United

Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting

Standard applicable in the United Kingdom and the Republic of Ireland" ("FRS 102") and the Companies Act

2006, under the provision of the Large and Medium-sized Companies and Groups (Accounts and Reports)

Regulations 2008 (SI 2008/410).

4.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements are prepared on a going concern basis, under the historical cost convention, as

modified by the revaluation of land and buildings and certain financial assets and liabilities measured at fair

value through profit or loss.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting

estimates. It also requires management to exercise its judgement in the process of applying the company's

accounting policies. The areas involving a higher degree of judgement or complexity, or areas where

assumptions and estimates are significant to the financial statements are disclosed below.

Significant judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will,

by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are

addressed below.

i) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives

and residual values of the assets. The useful economic lives and residual values are reviewed annually. They are

amended when necessary to reflect current accounting estimates, based on technological advancement, future

investments, economic utilisation and the physical condition of the assets. See note 11 for the carrying amount

of the property, plant and equipment, and this note for the useful economic lives of each class of asset.

ii) Fair value of biological assets and agricultural produce

The carrying value of biological assets and agricultural produce is the determined fair value less costs to sell.

See note 12 for the carrying amount of biological assets and agricultural produce and details of the methods and

significant assumptions applied in determining the fair value.

There are not considered to be any critical judgements in applying the company's accounting policies.

Turnover

Turnover is measured at the fair value of the consideration received or receivable and represents the amount

receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the company

and Value Added Tax.

The company recognises turnover when (a) the significant risks and rewards of ownership have been transferred

to the buyer; (b) the company retains no ongoing involvement or control over the goods; (c) the amount of

revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity; and (e)

when specific criteria relating to each of the company's sales channels have been met, as described below.

i) Sale of goods - business customers

The company sells both grown crops and a range of externally sourced food products in the wholesale market.

Sales of goods are recognised on delivery to the customer. Delivery occurs when the goods have been shipped to

the location specified by the customer, the risks of obsolescence or loss have been transferred to the customer,

the customer has accepted the products in accordance with the sales contract, the acceptance provisions have

lapsed or the company has objective evidence that all criteria for acceptance have been satisfied.

ii) Sale of goods - retail

The company operates a retail shop and café for the sale of food, drink, homeware and certain related products.

Sales of goods are recognised on sale to the customer, which is considered the point of delivery. Retail sales are

usually by cash, credit or payment card.

Sales are made to customers with a right to return within a specified period, subject to conditions which reflect

the perishable nature of certain items. Accumulated experience is used to estimate and provide, where necessary,

for such returns at the balance sheet date.

iii) Loyalty programme

The company operates a loyalty programme whereby retail customers can accumulate points on their purchases

which are available to be redeemed against future purchases. Provision is made at the balance sheet date for

points earned but not redeemed.

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.

Entitlements are being amortised evenly over their estimated useful life of nil years.

Intangible fixed assets

Entitlements are stated at cost less accumulated depreciation and accumulated impairment losses. Entitlements

are being written off over their expected useful life of 10 years, on a straight-line basis.

Where factors indicate that the useful life of intangible assets has changed, the useful life is amended

prospectively to reflect the new circumstances.

The assets are reviewed for impairment if factors indicate that the carrying amount may be impaired.

Tangible fixed assets

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost

includes the original purchase price and costs directly attributable to bringing the asset to its working condition

for its intended use.

Land is not depreciated. Depreciation on other assets is calculated, using the straight line or reducing balance

method, to allocate the cost, less estimated residual value, over their expected useful lives as follows:

Freehold buildings

- 2 to 4% on cost

Improvements to leasehold buildings

- 4 to 10% on cost

Plant and machinery

- 25% on reducing balance

Fixtures and fittings

- 15% reducing balance

Motor vehicles

- 25% reducing balance

Computer equipment

- 33 1/3% on cost

The expected useful lives of assets are reviewed, and adjusted, if appropriate, at the end of each reporting period.

The effect of any change is accounted for prospectively.

Stocks

Shop stocks are valued at the lower of cost and estimated selling price less costs to complete and sell. Stocks are

recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the first-in, first-out (FIFO) basis.

At the end of each reporting period stocks are assessed for impairment. If an item of stock is impaired, the

identified stock is reduced to its selling price less costs to sell and an impairment charge is recognised in the

profit and loss account.

Biological assets and related agricultural produce are measured at fair value less costs to sell. Changes in fair

value less costs to sell are recognised in profit and loss in the period in which they arise.

Where active markets exist for assets in their present condition and location, fair value is determined as the

quoted price existing in the market that the company expects to use. Where no active market exists, fair value is

determined based on market prices for similar assets with adjustment to reflect differences.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held

under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases

are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element

of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Amounts not paid are shown in other creditors in the balance sheet. Once the contributions have been paid the

company has no further payment obligations. The assets of the scheme are held separately from the company in

independently administered funds.

Government grants and subsidies

Government grants and subsidies are recognised when there is reasonable assurance that the company will

comply with the conditions attaching to the grants, and that they will be received. Income from grants and

subsidies is included in profit and loss under the performance model.

5.	EMPLOYEES AND DIRECTORS

31.3.17

31.3.16

£

£

Wages and salaries

917,083

738,061

Social security costs

61,262

46,208

Other pension costs

3,382

2,520

981,727

786,789

The average monthly number of employees during the year was as follows:

31.3.17

31.3.16

Administration

14

11

Sales

45

40

Farm

7

5

66

56

Key management personnel compensation during the year amounted to £29,836 (31.3.16: £29,836).

31.3.17

31.3.16

£

£

Directors' remuneration

29,836

29,836

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.3.17

31.3.16

£

£

Hire of plant and machinery

8,265

453

Other operating leases

128,000

128,000

Depreciation - owned assets

160,194

155,916

Profit on disposal of fixed assets

(3,962

)

(3,574

)

Entitlements amortisation

3,602

4,345

Auditors' remuneration

5,000

5,000

Single farm payments receivable

(53,323

)

(46,662

)

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.3.17

31.3.16

£

£

Bank loan interest

13,262

17,405

Hire purchase charges

-

75

13,262

17,480

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.3.17

31.3.16

£

£

Current tax:

UK corporation tax

63,062

67,637

Deferred tax

11,019

8,448

Tax on profit

74,081

76,085

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

31.3.17

31.3.16

£

£

Profit before tax

313,915

315,478

Profit multiplied by the standard rate of corporation tax in the UK of 20% (2016 - 20%)

62,783

63,096

Effects of:

Expenses not deductible for tax purposes

11,298

12,989

Total tax charge

74,081

76,085

9.

DIVIDENDS

31.3.17

31.3.16

£

£

Interim

50,000

45,000

10.	INTANGIBLE FIXED ASSETS

Entitlements

£

COST

At 1 April 2016

and 31 March 2017

43,450

AMORTISATION

At 1 April 2016

39,848

Amortisation for year

3,602

At 31 March 2017

43,450

NET BOOK VALUE

At 31 March 2017

-

At 31 March 2016

3,602

11.	TANGIBLE FIXED ASSETS

Improvements

to

Freehold

Freehold

leasehold

Plant and

land

buildings

buildings

machinery

£

£

£

£

COST

At 1 April 2016

2,820,931

833,773

842,051

547,936

Additions

-

-

10,696

101,626

Disposals

-

-

-

(18,000

)

At 31 March 2017

2,820,931

833,773

852,747

631,562

DEPRECIATION

At 1 April 2016

-

247,610

267,155

442,835

Charge for year

-

20,003

43,460

34,344

Eliminated on disposal

-

-

-

(16,962

)

At 31 March 2017

-

267,613

310,615

460,217

NET BOOK VALUE

At 31 March 2017

2,820,931

566,160

542,132

171,345

At 31 March 2016

2,820,931

586,163

574,896

105,101