06 CORPORATE INFORMATION 06 MISSION 09 CHAIRMAN’S STATEMENT 10 BOARD of directors
14 DIRECTORS’ REPORT 18 MANAGEMENT Team 21 AUDITOR’S REPORT 22 FINANCIAL REVIEW
6 GROWING...CARING...SERVING
CORPORATE PROFILE THE WINFRESH GROUP
MISSION
The Winfresh Group comprises the parent company, Winfresh Limited, together with the following subsidiary undertakings and associated companies:
To serve our customers with a range of high quality products and services at just prices, to pay fair prices to our suppliers and to return fair value to our shareholders.
Subsidiary Companies 1. Winfresh (UK) Limited 2. Winfruit Ltd (Subsidiary company of Winfresh (UK) Limited) 3. Vincyfresh Limited 4. Sunfresh Limited
We aim to do so by working in partnership with our suppliers in a manner that is socially and morally responsible and commands respect for our integrity and the positive contributions we make to the societies we serve.
Associated Company 5. Windward Isles Banana Company (UK) Ltd (Associated company of Winfresh [UK] Limited) 6. Windward Isles Banana Company Holdings (Jersey) Limited
SHAREHOLDERS The shareholders of Winfresh are the Governments of the four Windward Islands, Saint Lucia, Dominica, St. Vincent and the Grenadines and Grenada; Saint Lucia Agricultural Holding Company (“SLAHC”), Dominica Banana Holding Company (“DBHC”); St Vincent Banana Growers’ Association (“SVBGA”) and the Grenada Banana Co-operative Society (“GBCS”). SVBGA and GBCS have been dissolved and the shares held by them are to be transferred in accordance with the provisions of the Shareholders’ Agreement.
GROUP DIRECTORS
Montgomery Daniel - Chairman Cecil Ryan Vanoulst Jno Charles Deles Warrington James Fletcher Eustace Vitalis Renwick Rose Sonya Sally Anne Bagwhan-Logie Simon Stiell Bernard Cornibert (Winfresh UK only) Martina Edwin (Winfresh UK only)
GROUP EXECUTIVES Bernard Cornibert Martina Edwin Roy Hugh Phil Collins Ashley James Errol Reid
Denise Kamal
Chief Executive Company Secretary Sales & Marketing Director Procurement Director Operations Director Technical Director
Acting Finance Director
7 GROWING...CARING...SERVING
REGISTERED ADDRESSES
AUDITORS
Winfresh Limited Reg. No. 47 of 1994 99 Chaussee Road, Castries, Saint Lucia WI Sunfresh Limited Reg. No. 318 of 2010 Cul de Sac, Castries, Saint Lucia WI
Price Bailey LLP 3rd Floor, 24 Old Bond Street, London, W1S 4AP, United Kingdom
Winfresh (UK) Limited Reg. No: 2929097 3rd Floor, 24 Old Bond Street, London, W1S 4AP, United Kingdom Winfruit Limited Reg. No: 2929097 3rd Floor, 24 Old Bond Street, London, W1S 4AP, United Kingdom
BUSINESS ADDRESSES
Winfresh Limited Agricultural Complex, Odsan, P O Box 115, Castries, Saint Lucia WI Telephone +1 758 457-8600 Fax +1 758 453-1638 Sunfresh Limited Cul de Sac, P O Box JB39, Castries, Saint Lucia WI Telephone +1 758 451-5785 Fax +1 758 451-5607 Winfresh UK High Cross Lane East, Little Canfield, Essex, CM6 1TH, United Kingdom Telephone +44 (0) 1371 877 000 Fax +44 (0) 1371 873 531 Winfruit Limited High Cross Lane East, Little Canfield, Essex, CM6 1TH, United Kingdom Telephone +44 (0) 1371 877 000 Fax +44 (0) 1371 873 531 E-Mail info@wnfresh.net Web www.winfresh.net
BANKERS
Bank of St Lucia Bridge Street, P O Box 1031, Castries, Saint Lucia WI Barclays Bank Plc 50 Pall Mall, London, SW1Y 5AX, United Kingdom Crown Agents Bank St. Nicholas House, Sutton, Surrey, SM1 1EL, United Kingdom
SOLICITORS Caribbean Law offices 99 Chaussee Road, P O Box 835, Castries, Saint Lucia WI Tees Solicitors High Street, Bishop’s Stortford, Hertfordshire, CM23 2LU Bond Pearce LLP Oceana House, 39-49 Commercial Road, Southampton, SO15 1GA, United Kingdom
9 GROWING...CARING...SERVING
Chairman’s Statement Winfresh has improved on the performance of its principal trading activity in 2012. Total revenue from trading was marginally down but the trading loss was very significantly reduced. We are pleased that the earnings from trading are moving in the right direction but we understand that this is no time for the Company to relax. Indeed, much have been done and achieved in reducing cost and improving efficiency across the supply chain but the process will not stop there. Work will continue to ensure that the fortunes of the Group are comprehensively turned around. The performance of the Group, overall, remained frustratingly disappointing. The scale of the drop in the overall Group result and its implications for retained earnings and shareholder value is understandable but remains a matter of deep concern to the Board. The comprehensive result is heavily skewed towards the performance of the Geest joint venture companies, where the company has a significant investment. In 2010 and, again, in 2012 the company has had to write down, substantially, the carrying value of that investment. The impact on the Company’s results and, consequently, on shareholders’ equity has been phenomenal. The Board is mindful of the $ 92.016 million (62.4%) drop in shareholder value over the five years to 2012, largely as a result of the diminution in the value of the investment in the Geest joint venture.
The supplies problems of the Windward Islands banana industry caused by Tropical Storm Tomas and Black Sigatoka disease in 2010/2011, hopefully, are behind us. The Company must now move with full steam, with the support of the other stakeholders, to drive the Core Grower Programme to enable the Windwards banana industry to “stay on top of its game” and to deliver customer quality and volume requirements consistently. The Group will also move with renewed determination in pushing its diversification plans. The areas or parts of the business that are weak or underperforming will be dealt with appropriately to ensure that the business as a whole moves ahead. 2012 is now behind us but 2013 will be a watershed for the Company and subsidiaries and joint venture companies. Notwithstanding the difficulties and setbacks, the Winfresh Group will accelerate the rolling out of its new products in 2013/14. In particular, we should see the new and innovative “fruitful” by Winfruit Limited going to market with a bang very soon. Much as we are excited about the growth prospects for the Group, we are equally committed to and passionate about the Group’s ties
with the agricultural sector in the Windward Islands. Winfresh is a leading player in export marketing and distribution in the sector. It is important that the Company seeks not just to maintain but to enhance that position, through its crop diversification and agro-processing initiatives. To that end, Winfresh needs the understanding and support of all its stakeholders, particularly the shareholder Governments, as it makes the difficult transition from a single to a multi product company. I take the opportunity to thank the board, management and staff across the Group for their dedication and service to the Group and their stakeholders and for ensuring that the Winfresh ship remained afloat amid the persistently rough waters.
Montgomery Daniel CHAIRMAN
11
14 GROWING...CARING...SERVING
DIRECTORS’ REPORT The Directors present their report and consolidated financial statements, in Eastern Caribbean Dollars (XCD), for the Winfresh Group for the period ended 31 December 2011. The Eastern Caribbean Dollar is fixed to the US Dollar (USD) at the rate of USD 1 = XCD 2.70. DIRECTORS WHO SERVED DURING THE YEAR Montgomery Daniel - Chairman Cosmos Richardson (resigned on 15th March 2012) Cecil Ryan James Fletcher (appointed on 15th March 2012) Vanoulst Jno Charles Eustace Vitalis (appointed on 15th March 2012) Deles Warrington Renwick Rose (appointed on 15th March 2012) Ferron Lowe Bernard Cornibert—Winfresh UK only Gemma Bain-Thomas Martina Edwin—Winfresh UK only Peter Josie (resigned on 15th March 2012)
RESULTS AND DIVIDENDS The Group’s results for the period are set out in the statement of comprehensive income on pages [22] and [23]. The Group’s consolidated earnings from operations on its core activities before taxation was a loss of $ 2,964,146, compared to a loss of $ 16,909,424 for the previous year. Although still on the wrong side to the earnings mark, the results were trending in the right direction. However, the total comprehensive earnings, after taxation and inclusion of share of earnings from joint ventures, was a reduced to a loss of $ 49,662,607, compared to a loss of $ 13,047,252 in the previous year, of which $ 50,543,413 was attributable to the owners of the company, against the loss of $ 10,794,480 for previous year. Of the consolidated Group loss, £48,365,703 (97.4%) was attributable to losses from joint ventures and associates, the bulk of which was due to goodwill write down in the joint venture company, Windward Isles Banana Company (UK) Limited (“WIBUK”) The Directors do not recommend payment of a dividend for the period.
OPERATING AND FINANCIAL REVIEW: The Business of the Group The Group’s activities involve organising the sale of fresh produce in the United Kingdom under the Winfresh brand and customer own labels. The Group have traded principally in bananas. The produce is sourced largely from the Windward Islands and other Caribbean countries. Activities include purchasing ex works and loading of the produce in the Windward Islands and shipment to the United Kingdom as well as direct importation, FOB or CIF, from other countries. In the case of bananas, these are processed at the Group’s banana ripening facility at Stansted for distribution and sale to supermarket retailers and secondary wholesalers in the food markets. In addition, the Group have been involved in: •
The production and sales of bottled water and a range of processed foods and juices and beverages, and
•
The development, production, marketing and distribution of non-dairy freezer fruit dessert, and
15 GROWING...CARING...SERVING
5 years summary Changes 2011-12
2012 EC$’000
2011 EC$’000
2010 EC$’000
2009 EC$’000
2008 EC$’000
Trading Revenue (excluding share of joint ventures)
-3.4%
206,037
213,398
242,500
270,507
252,775
Profit/(Loss) before adjustments
67.0%
(5,685)
(17,244)
(21,489)
(8,159)
(10,419)
Profit/(Loss) before taxation
82.5%
(2,964)
(16,909)
(45,040)
9,350
(25,156)
-208.6%
(49,663)
(10,403)
(44,793)
11,198
(19,039)
-50.2%
44,723
89,871
108,516
158,424
147,206
84.1%
55,364
106,787
117,062
170,654
147,367
-48.1%
5.54
10.68
11.71
17.07
14.74
Comprehensive Profit/(Loss) after taxation (including share of joint ventures) Retained Earnings Shareholders’ Equity Equity Value per share
OPERATING AND FINANCIAL REVIEW: Business Performance, Principal Risks and Uncertainties Notwithstanding what might seem as a disappointing overall performance for the period, the turnaround in the EBIT from the core activities has been significant. The core business has struggled in the last few years from the severe challenges with which the Group have had to cope, particularly with banana supplies from the Windward Islands, but from all indications the Group appear to have turned the corner, at least for now, on those supplies difficulties. The competitive pressures in the fresh produce industry in particular and it the retail trade generally, have had and continues to have a significant negative influence on market prices. This continuing deflationary pressure on prices is completely out of sync with the inflationary push on the cost side. Calls in the trade for more realistic pricing have gone largely unheeded but this remains one of the biggest challenges facing the core business and the fresh produce trade generally. The Group have had some success in resolving some of the supply issues with their principal sources in the Caribbean, which largely have
been responsible for the recent loss from operations. However, there is still more that can and will be done to minimise the risk and threats to supplies posed by hurricanes and crop diseases and their impact on the Group’s year to year performance. Total volume of bananas purchased from the Windwards Islands was 35.5% higher in the period under review than in the previous period. This is by no means a significant increase considering the extent of the damages inflicted on banana industry by Tropical Storm Tomas and outbreak of Black Sigatoka disease as production was recovering from the storm. The recovery has been slow because of the prolonged impact of the disease. Banana volumes from the Windward Islands accounted for 23.5% of the Group’s total purchase, compared to 16.9% in the previous period. There was a 6.7% drop in the total cost of sales in the period compared to the previous period. The reduction was attributed largely to a drop in throughput and sales volumes. Total goods cost during the period was 6.2% lower than in the previous period but average cost was broadly in line with the that of the previous period.
16 GROWING...CARING...SERVING
Fairtrade bananas has been a significant part of the Group’s product offer, with Fairtrade accounting for more than 90% of its total banana volume sales in the period. Therefore, the increases in the FLO minimum FOB prices of Fairtrade bananas, during the period, have had some impact on the cost of goods, notwithstanding the reduction in the total cost. The total value of sales for the period was down by 3.6%, from the previous period. The drop was smaller than the reduction in the total cost of sales and the percentage reduction in fruit cost. This meant that average sales price was only marginally higher than in the previous period. While there was less disruption in supplies from the Group’s Caribbean sources, the vulnerability of the banana production in that region to short term weather and disease problems means that the Group remain exposed to the risks associated with intermittent supply problems. More generally, the business is exposed to risks and uncertainties associated with unpredictability in movements of energy costs and currency rates. This is not unique to the Group but applies to the banana trade in general. The Group have been monitoring those hazards and have put in place appropriate arrangements to reduce the exposure of the business and to act in a timely manner to mitigate potential losses. The growing pressure on prices has caused the Group to focus ever more on costs reduction and efficiency improvement. The result has been a 28.2% reduction in the cost administration and general expenses from the previous period.. The Group’s plans to introduce new products on the market have been further delayed, while work continued to ensure that risk of market failure is minimised. Bananas still accounted for more than 90% of the Group’s total turnover in the period under review. However, the Group have been in discussion with interested parties on options for the utilisation of the two new modules at the Stansted facility. FUTURE DEVELOPMENTS: Objectives and Strategy The Fairtrade labelling Organisation (FLO) did not announce any increase in the minimum prices to be paid for Fairtrade bananas for the next period. However, it is expected that new
price increases will come into effect in January 2014. The Group continue to be concerned at the widening price gap between the bananas from Windward Islands and those from other origins. Also, it is a matter of concern to the Group that Fairtrade bananas from small holder farmers, like those of the Windward Islands, are being displaced in the market by Fairtrade bananas from plantation farmers, who qualify under the FLO hired labour scheme. There is a significant risk that Fairtrade, which was once seen as the saviour for small holder (family) farmers, will begin to have unintended but serious negative consequences for those farmers. The Group fear that the Windward Islands banana farmers could be the first casualties of this policy. The Group are in the concluding stages with a third party manufacturer for production of its dairy-free freezer fruit desert, “fruitful” on a significant scale. This innovative product is a magical mix of fruit made with 100% ingredients of natural origin. Consumers buying premium brands in that category have already given the product very positive reviews and amazed at its creamy texture given that it is 100% dairy free and virtually fat free. The Directors remain confident about the market prospects of the product which will be unveiled soon. Subject to the completion of some internal structuring within the Group the plans to launch the product into the market in 2013 remains on course. The Group will explore all opportunities and pursue vigorously its ongoing discussions on the full utilisation of the remaining modules at the expanded facility in Stansted. Despite the setbacks, the Group directors are confident that the Group will be able to achieve its objectives of taking most of its new range of products to market 2013. EMPLOYEES AND EMPLOYEE INVOLVEMENT During the year the Group’s policy of providing employees with information about the Group continued through announcements and briefings in which the employees have also been encouraged to present their suggestions and views on the Group’s operations. CREDITOR PAYMENT POLICY AND PRACTICE The Group’s policy concerning the payment of trade payables (creditors) is to agree the terms of payment with its suppliers when agreeing the terms of each contract; to ensure that suppliers are made aware of these terms by inclusion of the relevant terms in supply contracts where appropriate; and to pay its trade payables in accordance with those
17 GROWING...CARING...SERVING
contractual obligations. On average and based on the results for the entire period, trade payables at the statement of financial position date represented an average of 25 days. POST BALANCE SHEET EVENTS There were no significant events after the balance sheet date affecting the Group or the company, which have not been disclosed in the consolidated financial statements. AUDITORS In accordance with the company’s articles, a resolution proposing that Price Bailey LLP be appointed as auditors of the company will be put to the General Meeting. STATEMENT OF DISCLOSURE OF INFORMATION TO AUDITORS The Directors who held office at the date of approval of this Directors’ report confirm that: (a)
So far as the Directors are aware, all relevant audit information was disclosed to the Group’s auditors and there is none of which they were uninformed.
(b)
The Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.
By the Order of the Board
Martina Edwin COMPANY SECRETARY
Approved by the Board of Directors on 27th July 2013
21
August 24, 2012
Price Bailey Causeway House 1 Dane Street Bishop’s Stortford Hertfordshire CM23 3BT Tel: +44 (0)1279 755888 Fax: +44 (0)1279 755417
Independent Auditor’s Report TO THE SHAREHOLDERS OF WINFRESH LIMITED Report on the Financial Statements We have audited the accompanying consolidated financial statements of Winfresh Limited which comprise the consolidated statement of financial position as of December 29, 2012, consolidated statement of comprehensive income, consolidated Statement of changes in equity, and consolidated statement of cash flows for the period then ended and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We have conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 29, 2012 and of its financial performance and its cash flows for the period ended in accordance with International Financial Reporting Standards.
G Llewellyn Gill & Co (for and on behalf of Price Bailey) Chartered Accountants Castries, Saint Lucia
22 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Consolidated statement of comprehensive income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME DECEMBER FORFOR THE THE YEARYEAR ENDEDENDED DECEMBER 29, 2012 29, 2012
(expressed in Eastern Caribbean dollars)
(Expressed in Eastern Caribbean Dollars)
January 1 2012 to December 29 2012 $
January 2 2011 to December 31 2011 $
206,036,714
213,398,228
(187,751,114)
(201,269,090)
18,285,600
12,129,138
Distribution and selling
(12,278,003)
(13,093,794)
Administrative and general expenses
(11,692,643)
(16,279,032)
(5,685,046)
(17,243,688)
(2,245,141)
(1,086,765)
Other gains/(losses), net (Note 22)
3,933,045
141,567
Other income (Note 23)
1,032,996
1,279,462
(2,964,146)
(16,909,424)
Share of (loss)/profit in joint ventures and associates (Note 15)
(48,365,703)
8,594,215
Loss before income tax
(51,329,849)
(8,315,209)
(893,370)
(2,088,183)
(52,223,219)
(10,403,392)
(53,104,025) 880,806
(8,150,620) (2,252,772)
(52,223,219)
(10,403,392)
Revenue Sales of goods Cost of goods sold Profit from trading
Finance costs (Note 21)
Loss before share of profit in joint ventures, associates and income tax
Income tax expense (Note 28) Loss for the period
Loss after taxation attributable to: Owners of the company Non-controlling interest
-3-
23 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED
Consolidated statement of comprehensive income
CONSOLIDATED STATEMENT COMPREHENSIVE INCOME FOR THE YEAR ENDEDOF DECEMBER 29, 2012 FOR(expressed THE YEAR ENDED DECEMBER 29, 2012 in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
Loss for the period Other comprehensive gains/(losses) Currency movement for the period Share of joint venture actuarial losses on defined benefit pension plans (Note 15) Total comprehensive loss for the period
January 1 2012 to December 29 2012 $
January 2 2011 to December 31 2011 $
(52,223,219)
(10,403,392)
3,632,233 (1,071,621)
(985,805) (1,658,055)
(49,662,607)
(13,047,252)
(50,543,413) 880,806
(10,794,480) (2,252,772)
(49,662,607)
(13,047,252)
Total comprehensive loss attributable to: Owners of the company Non-controlling interest
-4-
24 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Consolidated statement of changes in equity CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THEPERIOD PERIODENDED ENDED DECEMBER 2012 FOR THE DECEMBER 29, 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars) Share capital $ Balance at January 2, 2011 Comprehensive loss: Loss for the year after taxation Share of actuarial loss of joint venture's defined benefit pension scheme
20,000,000
Contributed Currency capital translation reserves $ $
Retained earnings
Total
$
$
303,217 (11,756,710) 108,382,310 116,928,817
-
-
- (10,403,392) (10,403,392) - (1,658,055) (1,658,055)
Total comprehensive loss
-
-
- (12,061,447) (12,061,447)
Other comprehensive loss: Currency movement for the period year
-
-
(985,805)
Total comprehensive income
-
-
(985,805) (12,061,447) (13,047,252)
Transactions with owners: Amortisation of contributed capital
-
(30,322)
Balance at December 31, 2011
-
-
30,322
(985,805)
-
20,000,000
272,895 (12,742,515) 96,351,185 103,881,565
20,000,000
272,895 (12,742,515) 98,870,859 106,401,239
Attributable to: Owners of the parent company Non-controlling interest
385,796 106,787,035
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Winfresh Limited
WINFRESH LIMITED Consolidated statement of changes in equity
(continued) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) FOR THEPERIOD YEARENDED ENDED DECEMBER 29, 2012 FOR THE DECEMBER 29, 2012 (expressed in Caribbean Eastern Caribbean dollars) (Expressed in Eastern Dollars) Share capital $ Balance at January 1, 2012 Comprehensive loss: Loss for the year after taxation Share of actuarial loss of joint venture's defined benefit pension scheme
Contributed Currency capital translation reserves $ $
20,000,000
Retained earnings
Total
$
$
272,895 (12,742,515) 96,351,185 103,881,565
-
-
- (52,223,219) (52,223,219) (1,071,621) (1,071,621)
-
-
- (53,294,840) (53,294,840)
Other comprehensive income: Currency movement for the period
-
-
3,632,233
Total comprehensive income/(loss)
-
-
3,632,233 (53,294,840) (49,662,607)
Transactions with owners: Amortisation of contributed capital Adjustment for minority interest
-
(27,290) -
-
27,290 133,451
133,451
-
(27,290)
-
160,741
133,451
20,000,000
245,605
(9,110,282) 43,217,086
54,352,409
20,000,000
245,605
(9,110,282) 44,722,503
55,857,826
Balance at December 29, 2012
-
3,632,233
Attributable to: Owners of the parent company Non-controlling interest
(483,398) 55,374,428
-6-
26 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Consolidated statement of Financial Position As OF DECEMBER 29, 2012 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
December 29 2012 $
December 31 2011 $
7,608,437 1,280,644 22,374,032 10,291,815 4,507,130 479,405
9,380,019 1,233,120 24,562,013 7,953,475 4,439,375 524,415
46,541,463
48,092,417
908,253 1,015,734 2,619,661 44,872,848 11,817,159 2,654,000
976,008 930,756 2,534,606 47,300,729 56,742,144 2,936,329
110,429,118
159,512,989
31,838,697 22,394,918 121,075
2,797,074 21,650,693 -
54,354,690
24,447,767
700,000
28,278,187
55,054,690
52,725,954
Assets Current assets Cash and cash equivalents (Note 6) Held-to-maturity financial assets (Note 7) Trade and other receivables (Note 8) Inventories (Note 10) Due from related parties (Note 11) Deferred tax asset (Note 19)
Non-current assets Due from related parties (Note 11) Other receivables (Note 12) Intangible fixed assets (Note 13) Property, plant and equipment (Note 14) Investments in joint ventures and associates (Note 15) Other investments (Note 16) Total assets Liabilities Current liabilities Bank loans and overdrafts (Note 6) Trade and other payables (Note 17) Income tax payable
Non-current liabilities Loans and borrowings (Note 18) Total liabilities
-7-
27 GROWING...CARING...SERVING
Winfresh Limited
Consolidated statement of Financial Position WINFRESH LIMITED (continued)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED) As OF DECEMBER 29, 2012 AS OF DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
December 29 2012 $
December 31 2011 $
Share capital (Note 20) Contributed capital and reserves Currency translation reserve Retained earnings
20,000,000 245,605 (9,110,282) 44,722,503
20,000,000 272,895 (12,742,515) 98,870,859
Non-controlling interest (Note 25)
55,857,826 (483,398)
106,401,239 385,796
Total equity
55,374,428
106,787,035
110,429,118
159,512,989
Equity
Total liabilities and shareholders' equity
Approved by the Board of Directors on .........................................
........................................ Approved by the Board of Directors on 27 June 2013.
.....................................
Name: ........................................ Director
Name: ........................................ Director
____________________________
____________________________
J L Fletcher Director
Eustace Vitalis Director
28 GROWING...CARING...SERVING
Winfresh Limited
Consolidated statement of cash flows
WINFRESH LIMITED
FOR THE YEAR ENDED DECEMBER 29, 2012
CONSOLIDATED STATEMENT OF CASH FLOWS (expressed in Eastern Caribbean dollars) FOR THE YEAR ENDED DECEMBER 29, 2012
December 29 2012 $
December 31 2011 $
(51,329,849)
(8,315,209)
4,080,247 (1,784,955) (7,860) (91,422) 48,244,267 362,674 (1,748,250) 1,546,350
3,754,313 27,575 3,116 19,355 (403,373) (8,594,215) 1,085,089
(728,798)
(12,423,349)
2,187,981 (2,338,340) (84,978) 632,894
(1,559,454) 72,312 1,379,244 215,144
(331,241)
(12,316,103)
Income tax refund Interest paid
(1,546,350)
2,440 (1,085,088)
Net cash used in operating activities
(1,877,591)
(13,398,751)
Cash flows from investing activities Payments to acquire property, plant and equipment Increase in other investments Interest received Dividends received Proceeds from disposal of property, plant and equipment
(813,474) (47,524) 91,442 76,298
(15,411,079) (38,815) 403,373 2,096,150 166,388
Net cash used in investing activities
(693,258)
(12,783,983)
Cash flows from operating activities Loss for the period Adjustments for: Depreciation (Note 13 and 14) Unrealised exchange gain Gain on disposal of property, plant and equipment Loss on disposal of trademarks Interest income Share of loss/(profit) in joint ventures and associates (Note 15) Impairment of property, plant and machinery (Note 22) Discount on acquisition of subsidiary Finance costs Operating loss before working capital changes (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories Decrease in amounts due from related parties Increase/(decrease) in trade and other payables Cash used in operating activities
29 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Consolidated statement of cash flows (continued) FOR THE YEAR ENDED DECEMBER 29, 2012 CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) (expressed in Eastern Caribbean dollars) FOR THE YEAR ENDED DECEMBER 29, 2012
December 29 2012 $
December 31 2011 $
Cash flows from financing activities New bank loan Loan from related party Loan repayment
(9,897)
21,178,406 40,031 -
Net cash generated from investing activities
(9,897)
21,218,437
(2,580,746) 6,582,945
(4,964,297) 11,547,242
4,002,199
6,582,945
Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (Note 6)
30 GROWING...CARING...SERVING
WINFRESH LIMITED Winfresh Limited
Notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of DECEMBER DECEMBER 29, 2012 29, 2012
(expressed in Eastern Caribbean dollars)
(Expressed in Eastern Caribbean Dollars)
1
General information Incorporation These consolidated financial statements include the financial statements of Winfresh Limited (the Company) and its subsidiary companies, Winfresh UK Limited, Winfruit Limited, Vincyfresh Limited and Sunfresh Limited. Winfresh Limited was incorporated under the laws of Saint Lucia and continued under the Company's Act, 1996. The Company commenced trading effective January 1, 1995 with the takeover of the operations formally undertaken by Windward Islands Banana Growers' Association ("WINBAN"). Winfresh (UK) Limited was incorporated under the Companies Act 1985 of the United Kingdom and commenced trading in May 1994 and is a wholly owned subsidiary of Winfresh Limited. Winfruit Limited was incorporated under Companies Act 2006 of the United Kingdom and commenced trading in December 2008. Winfresh (UK) Limited has a 75% holding of the ordinary shares of the company. Vincyfresh Limited was incorporated under the 1994 Companies Act of Saint Vincent and the Grenadines as Lauders Agro Processors Inc. and commenced trading in October 2007. Winfresh Limited has a 60% holding of the Class "A" common shares of the company. Sunfresh Limited was incorporated under the laws of Saint Lucia and continued under the Company's Act, 1996 and commenced trading in January 2011. Winfresh Limited has a 100% holding of the ordinary shares of the company. The Company's registered office is located at 99 Chaussee Road, Castries, Saint Lucia. Principal activity The principal activity of the Group is the importation, marketing and distribution of bananas and fresh produce, and processing, packaging and distribution of water and fruit juices. Shareholdings The of the Winfresh are the of the Windward Islands, St. Lucia, Dominica, St. The shareholdings shareholdings of Company are Governments the Governments of four the four Windward Islands: Saint Lucia, Vincent and theVincent Grenadines and Grenada;and Saint Lucia Agricultural Holding Company (“SLAHC”), Dominica, Saint and the Grenadines Grenada and the banana grower associations ("BGAs")Dominica Banana Holding Company St Vincent Banana Corporation Growers’ Association the Grenada of the Windward Islands: (“DBHC”); Dominica Banana Marketing ("DBMC"), (“SVBGA”) St Vincentand Banana Banana Co-operative Society (“GBCS”). SVBGA and GBCS have been dissolved and the shares held by them Growers' Association ("SVBGA") and the Grenada Banana Co-operative Society ("GBCS"). are to be transferred in accordance with the provisions of the Shareholders’ Agreement. The Group's financial year represents a 52 week period ending December 29, 2012 (December 31, 2011 52 week period ending December 31, 2011).
- 11 -
31 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
2
Basis of preparation
(a)
Statement of compliance These Consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
(b)
Basis of measurement The consolidated financial statements have been prepared under the historical cost convention except for financial assets that have been measured at fair value.
(c)
Functional and presentation currency Items included in the financial statements of each Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The Group's functional currencies include Eastern Caribbean dollars (EC$), and the UK pound (GBP). The consolidated financial statements are presented in Eastern Caribbean Dollars (EC$), which is the Group's presentation currency.
(d)
Use of estimates and judgements The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about assmptions and estimation uncertainties that have a significant risk of resulting in a material adjustment with the next accounting period are included in the following notes:
* * * *
Tade receivables Property, plant and equipment Impairment of non-financial assets Determination of fair values
(e)
Standards and amendments effective and relevant to the Company
Note 3 Note 3 Note 3 Note 5
The financial statements have been prepared in accordance with IFRSs which are effective as at January 1, 2012. The following IFRSs and International Accounting Standards [IASs] became effective during the period: Effective from January 1, 2012: IAS 12
Income taxes - Limited scope amendment (recovery of underlying assets)
Effective from July 1, 2012 IAS 1
Presentation of Financial Statements - Amendments to revise the way other comprehensive income is presented
32 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 201229, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
2
Basis of preparation (e)
(continued)
Standards and amendments effective and relevant to the Company (continued)
At the date of authorisation the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective. IAS 1 IAS 1 IAS 16 IAS 19 IAS 27 IAS 27 IAS 28 IAS 32 IAS 32 IAS 34 IAS 36 IFRS 1 IFRS 1 IFRS 7 IFRS 7 IFRS 9 IFRS 9 IFRS 10 IFRS 10 IFRS 10 IFRS 11 IFRS 11 IFRS 12 IFRS 12 IFRS 12 IFRS 13 IFRIC 20 IFRIC 21
Presentation of Financial Statements - Amendments to revise the way other comprehensive income is presented Amendments resulting from Annual Improvements 2009-2011 Cycle (comparative information) Amendments resulting from Annual Improvements 2009-2011 Cycle (Servicing equipment) Employee Benefits - Amended Standard resulting from the Post-Employment Benefits and Termination Benefits projects Consoildated and separate financial statements - Reissued as IAS 27 Separate Financial Statements (As amended in 2011) Amendments for investment entities Investment in Associates - Reissued as IAS 28 Investments in Associates and Joint Ventures (as amended 2011) Financial Instruments: Presentation - Amendments to application guidance on the offsetting of financial assets and financial liabilities Amendments resulting from Annual Improvements 2009-2011 Cycle (tax effect of equity distributions) Amendments resulting from Annual Improvements 2009-2011 Cycle (interim reporting of segment assets) Amendments arising from Recoverable Amount Disclosures for Non-Financial Assets Amendments for government loan with a below-market rate of interest when transitioning to IFRSs Amendments resulting from Annual Improvements 2009-2011 Cycle (repeat application, borrowing costs) Financial Instruments: Disclosures - Amendments enhancing disclosures about offsetting of financial assets and financial liabilities Financial Instruments: Disclosures - Amendments requiring disclosures about the initial application of IFRS 9 Financial Instruments - Classification and measurement of financial assets Financial Instruments - Accounting for financial liabilities and derecognition Consolidated Financial Statements Amendments to transitional guidance Amendments for investment entities Joint Arrangements Amendments to transitional guidance Disclosure of Interests in Other Entities Amendments to transitional guidance Amendments for investment entities Fair Value Measurement Stripping Costs in the Production Phase of a Surface Mine Levies
The adoption of these standards is not expected to have a significant impact on the financial statements.
33 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
3
Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been constantly applied by the Group entities unless otherwise stated. Consolidation (a)
Subsidiaries Subsidiaries are all entities over which the Group has power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed as at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated statement of comprehensive income. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries are consistent with the policies adopted by the Group.
(b)
Associates Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investment in associates is accounted for by the equity method of accounting and initially recognised at cost. The Group's share of its associates' post-acquisition profits or losses is recognised in the consolidated statement of comprehensive income, and its share of post-acquisition movements in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate Unrealised gains on transactions between the Group and its associate are eliminated to the extent of the Group's interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
34 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
3
Summary of significant accounting policies
(continued)
Consolidation (continued) (c)
Joint ventures A joint venture exists where the Group has a contractual arrangement with one or more parties to undertake activities typically, however not necessarily, through entities that are subject to joint control. The Group recognises interests in a jointly controlled entity using the equity method. The Group's share of the results of joint ventures is based on financial statements made up to a date not earlier than three months before the date of the balance sheet. Intragroup gains on transactions are eliminated to the extent of the Group's interest in the investee. Intragroup losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Non-controlling interests The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests. Cash and cash equivalents Cash and cash equivalents in the statement of cash flows include cash in hand, deposits held with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the consolidated statement of financial positioin. Investments The Group classifies its investments as loans and receivables. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. A provision for impairment of loans and receivables is established when there is objective evidence that the Group will not be able to collect all amounts due to it according to their original terms. Regular way purchases and sales of investments are recognised on trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus, in the case of all financial assets not carried at fair value through the consolidated statement of comprehensive income, transaction costs that are directly attributable to their acquisition. Investments are derecognised when the rights to receive cash flows from the investment have expired or where they have been transferred and the Group has also transferred substantially all risks and rewards of ownership. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at fair value less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the consolidated statement of comprehensive income.
35 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued) DECEMBER 29, 2012 29, 2012 As of DECEMBER (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars) 3
Summary of significant accounting policies
(continued)
Inventories Inventories, which are comprised of shipments of bananas in transit, bananas held in storage at a ripening depot and packaging materials, are stated at the lower of cost and net realisable value. Cost for bananas is determined by reference to the invoiced price together with the delivery costs incurred in shipping the bananas to the United Kingdom and to a ripening depot. Cost for packaging materials is determined using the weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business less applicable variable selling expenses. Property, plant and equipment Land and buildings comprise warehouses and offices. All assets are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of comprehensive income during the financial year in which they are incurred. Increases in the carrying amount arising on revaluation of land and buildings are credited to other reserves in shareholder's equity. Decreases that offset previous increases of the same asset are charged against other reserves directly in equity; all other decreases are charged to the consolidated statement of comprehensive income. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to the consolidated statement of comprehensive income and depreciation based on the asset's original cost is transferred from 'other reserves' to 'retained earnings'. Land is not depreciated. Depreciation on other assets is calculated using the straight-line and reducing balance methods to allocate their costs or revalued amounts to their residual values over their estimated useful lives, as follows: Buildings - (straight-line) Plant and machinery - (straight-line) Office furniture and equipment - (straight-line and reducing balance) Computer equipment - (straight-line) Motor vehicles - (straight-line)
2% 15% - 20% 25% - 33% 25% - 33% 25%
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the consolidated statement of comprehensive income.
36 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
3
Summary of significant accounting policies
(continued)
Impairment of non-financial assets Assets that have an indefinite useful life, for example land, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of comprehensive income over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date. Deferred income tax Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in an transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Share capital Ordinary shares are classified as equity. Preference shares which have discretionary dividend obligations and are not redeemable at a specific date or at the option of the shareholders, are also classified as equity. Dividend distribution Dividend distribution to the group company's shareholders is recognised as a liability in the Group's consolidated financial statements in the period in which the dividends are approved by the company's shareholders. Contributed capital Property, plant and equipment transferred and donated to the Group is included in property, plant and equipment at cost or valuation, and the corresponding credit is recorded in a contributed capital reserve. This contributed capital reserve is amortised to retained earnings on a straight line basis using the same rates used to provide depreciation on the applicable assets. - 17 -
37 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued) DECEMBER 29, 2012 29, 2012 As of DECEMBER (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars) 3
Summary of significant accounting policies
(continued)
Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of comprehensive income on a straight-line basis over the period of the lease. Employee benefits Pension obligations The subsidiary company, Winfresh (UK) Limited, is party to a multi-employer defined benefit pension scheme. The actuaries of the scheme have confirmed to the directors that the company is unable to identify its share of the underlying assets and liabilities of the scheme on a reasonable consistent basis. Accordingly, there is insufficient information to use defined benefit accounting. In accordance with IAS 19 revised, the scheme is accounted for as if it were a defined contribution pension scheme. A defined contribution pension scheme is a pension plan under which the company pays fixed contributions to a separate entity, typically being a pension fund. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The assets of the scheme are held in a separate independently administered fund. The subsidiary's contributions are charged to the statement of income in the year to which they relate. Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is recognised as follows: a.
Banana trading Banana trading income (including fees, recoveries, sales and commissions) is recognised upon delivery of products and customer acceptance.
b.
Interest income Interest income is recognised on a time-proportion basis using the effective interest method.
c.
Other income Other income is recognised on an accruals basis.
d.
Dividend income Dividend income is recognised when the right to receive payment is established.
Foreign currency translation a.
Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities are recognised in the consolidated statement of comprehensive income.
- 18 -
38 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED
Notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 2012 29, 2012
(expressed in Eastern Caribbean dollars)
(Expressed in Eastern Caribbean Dollars)
3
Summary of significant accounting policies
(continued)
Foreign currency translation (continued) b.
Group companies The results and financial position of all of the Group's entities that have a functional currency different from the presentational currency are translated into the presentational currency as follows:
(i)
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(ii)
income and expenses for each statement of comprehensive income are translated at the average exchange rates for the financial period (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
(iii) all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of borrowings are taken to shareholder's equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the consolidated statement of comprehensive income as part of the gain or loss on sale. Comparatives Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with comparative information. 4
Financial risk management Financial risk factors The Group's activities expose it to variety of financial risk: market risk (including currency risk and fair value risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the Group's financial performance. Risk management The Directors are charged with the overall responsibility of establishing and monitoring the Group's risk management policies and processes. The Group's overall risk management policies and processes focus on identifying, analysing and monitoring all potential risks such as foreign exchange risk, interest rate risk and credit risk that are faced by the Group. All treasury transactions are reported to and approved by the Directors.
39 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
4
Risk management
(continued)
a.
Market risk
(i)
Foreign exchange risk The Group trades internationally and is exposed to foreign exchange rate risk from various currency exposures, primarily with respect to the US dollar and Sterling/UK pound. The exchange rate of the Eastern Caribbean dollar (EC$) to the United States dollar (US$) has been formally pegged at EC$2.70 = US$1.00 since July 1976. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are nominated in a currency that is not the entity functional currency. The Group purchases its bananas and fresh produce in foreign currency and forward currency contracts are occasionally used for the purchases. All costs denominated in foreign currency are settled using the spot rate. There were no outstanding forward currency contracts at the balance sheet date.
The following table summarises the Group's exposure to foreign currency exchange rate risk at December 29, 2012 EC$ $
US$ $
Stg $
Euro $
Loans and receivables Cash and cash equivalents Investments: Loans and receivables Trade and other receivables Due from related parties
23,049 1,280,644 2,216,063 5,415,383
20,885 470,606 -
7,540,366 20,703,097 -
24,137 -
7,608,437 1,280,644 23,389,766 5,415,383
Total financial assets
8,935,139
491,491
28,243,463
24,137
37,694,230
US$ $
Stg $
Euro $
Total $
Financial liabilities at amortised cost Bank borrowings and overdrafts 10,101,697 Trade and other payables 4,590,692
4,374,228
21,737,000 13,599,650
530,348
31,838,697 23,094,918
Total financial liabilities
14,692,389
4,374,228
35,336,650
530,348
54,933,615
Net balance sheet financial position
(5,757,250) (3,882,737)
(7,093,187)
At December 29, 2012
Total $
Financial assets
EC$ $ Financial liabilities
(506,211) (17,239,385)
40 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 201229, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
4
Risk management
(continued)
a.
Market risk (continued)
(i)
Foreign exchange risk (continued) EC$ $
At December 31, 2011 Total financial assets Total financial liabilities Net balance sheet financial position
US$ $
Stg $
Euro $
Total $
8,823,761 1,367,688 (13,026,572) (3,198,170)
30,337,350 (36,495,779)
61,736 40,590,535 (5,433) (52,725,954)
(4,202,811) (1,830,482)
(6,158,429)
56,303 (12,135,419)
At December 29, 2012 if the EC$ had weakened/strengthened by 10% against the Stg/UK pound with other variables held constant, post tax profit for the year would have been $709,319 (December 31, 2011 - $615,843) higher/lower, mainly as a result of foreign exchange gains / losses on translation of Stg/UK pound denominated bank balances trade receivables and trade payables. (ii)
Cash flow and fair value interest rate risk The Group has interest bearing assets at fixed interest rates which expose the Group to fair value interest rate risk. The Group has determined that the fair value interest rate risk was not significant at the balance sheet date.
b.
Credit risk Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions and investments classified as loans and receivables; as well as credit exposure to customers, including trade receivables, balances due from related parties and committed transactions. The Group manages its exposure to this risk by applying contractual terms that have been approved by the Directors to the amount of credit exposure to any one counterparty. It also employs strict minimum credit worthiness criteria as to the choice of counterparty, thereby ensuring that there is no significant concentration of credit risk. The amount of the Group's maximum exposure to credit risk is indicated by the carrying amount of its financial assets at the balance sheet date. Management does not foresee any losses from nonperformance by these counterparties as at December 29, 2012 and December 31, 2011.
c.
Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and the ability of funding through an adequate amount of committed credit facilities. Bank overdrafts and trade and other payables are due within twelve months based on the remaining period at the balance sheet date to the contractual maturity date. The contractual undisclosed cash flows of the bank overdrafts and trade payables approximate the carrying amounts at the balance sheet date as the impact of discounting is not significant.
41 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 201229, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
4
Risk management d.
(continued)
Capital risk management The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders or return capital to shareholders.
5
Determination of fair values A number of the Group's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Property, plant and equipment The fair value of property, plant and equipment recognised as a result of a business combination is the estimated amount for which a property could be exchanged on the date of acquisition between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had acted knowledgeably. The fair value of items of plant, equipment, fixtures and fittings is based on the market approach and cost approaches using quoted market prices for similar items when available and replacement cost when appropriate. Depreciation replacement cost estimates reflect adjustments for physical deterioration as well as functional and economic obsolescence. Goodwill Goodwill is recorded at its fair value, this being the amount in excess of the fair market value of the separately identifiable assets of the subsidiary company that was acquired during the year. In future periods, goodwill will be assessed for impairment. Trade and other receivables The fair values of trade and other receivables approximate their carrying amounts due to the short term nature of the related transactions. Cash and cash equivalent Due to the short term nature of the transactions, the fair values of cash and cash equivalents approximate their carrying amounts at the reporting date. Trade and other payables Due to the short term nature of the related transactions, the fair values and other payables approximate their carrying amounts at the reporting date.
42 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
6
Cash and cash equivalents December 29 December 31 2012 2011 $ $ Cash at bank and in hand
7,608,437
9,380,019
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following: December 29 December 31 2012 2011 $ $ Cash at bank and in hand Bank overdrafts
Short term bank loan
7
7,608,437 (3,606,238)
9,380,019 (2,797,074)
4,002,199 (28,232,459)
6,582,945 -
(24,230,260)
6,582,945
Held-to-maturity financial assets December 29 December 31 2012 2011 $ $ Term deposit
1,280,644
1,233,120
Held-to-maturity financial assets comprise term deposits with banks. The weighted average effective interest rate on term deposits is 3% and 3.25% (December 31, 2011 - 3% and 3.25%) per annum. Term deposits mature within one year.
43 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBERin29, 2012 Caribbean dollars) (expressed Eastern (Expressed in Eastern Caribbean Dollars)
8
Trade and other receivables December 29 December 31 2012 2011 $ $ Trade receivables Less: provision for impairment of trade receivables (Note 9)
20,553,519 (631,292)
21,838,119 (639,643)
Trade receivables - net
19,922,227
21,198,476
1,419,763 1,032,042
2,353,916 1,009,621
22,374,032
24,562,013
Other receivables Prepayments
The credit quality of trade receivables is summarised as follows:
December 29 December 31 2012 2011 $ $
Neither past due nor impaired Past due but not impaired Impaired
13,985,857 5,936,370 631,292
16,608,788 4,589,688 639,643
Gross
20,553,519
21,838,119
The ageing of trade receivables that are past due and not impaired is as follows: December 29 December 31 2012 2011 $ $ Less than one month past due One to two months past due More than two months past due
4,147,624 429,617 1,359,129
4,306,934 127,194 155,560
5,936,370
4,589,688
44 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
8
Trade and other receivables The ageing of trade receivables that are impaired is as follows:
Over two months
(continued)
December 29 December 31 2012 2011 $ $ 631,292
639,643
The impaired receivables mainly relate to customers who are in unexpectedly difficult economic positions. Management has reviewed the position and determined that a part of these receivables is expected to be recovered. Other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables mentioned above. The Group does not hold any collateral as security. 9
Provision for impairment of trade receivables The movement in the provision for impairment of receivables is as follows:
December 29 December 31 2012 2011 $ $
At beginning of year Release provision Provision made during the year
639,643 (8,351) -
639,252 (7,960) 8,351
At end of year
631,292
639,643
The creation and release of the provision for impaired receivables has been included in general and administrative expenses in the consolidated statement of comprehensive income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash. 10
Inventories
Raw materials Chemicals and additives Packaging materials Finished goods
December 29 December 31 2012 2011 $ $ 230,229 377,293 1,257,696 8,426,597
212,331 988,172 6,752,972
10,291,815
7,953,475
45 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
11
Related party transactions and balances The Group is related to the four banana grower associations (BGAs) and the Governments of the Windward Islands (Note 1) which together own 100% of the Company's shares. The Group owns 50% of Windward Isles Banana Company Holdings (Jersey) Limited. The following transactions were carried out with the above mentioned related parties: December 29 December 31 2012 2011 $ $ Purchases of goods and services Purchases of bananas from BGAs
Key management compensation Salaries and other short-term benefits Year-end balances arising from sales / purchases of goods / services:
Due from/(due to) related parties Current St. Lucia Banana Corporation Government of Saint Lucia Sunsmart Beverages Inc.
Non-current Grenada Banana Co-operative Society Dominica Banana Marketing Corporation Sunsmart Beverages Inc.
25,288,435
21,265,287
December 29 December 31 2012 2011 $ $ 3,820,310
3,002,323
December 29 December 31 2012 2011 $ $
(9,777) 4,439,375 67,755
(9,777) 4,439,375 -
4,497,353
4,429,598
786,780 121,473 -
786,780 121,473 67,755
908,253
976,008
Balances with related parties are unsecured, non-interest bearing and have no fixed terms of repayment. During previous financial year the company had accepted, in principle, an offer from the Government of Saint Lucia for the settlement of the amount due by way of transfer of land valued at $4,439,375. The transfer is still being negotiated at the balance sheet date.
46 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
12
Other receivables
December 29 December 31 2012 2011 $ $
Other loan At beginning of year Movement during the year At end of year
930,756 84,978
904,377 26,379
1,015,734
930,756
Included in the above balance is a loan of $956,285 (at December 31, 2011, - $886,583), which bears interest at LIBOR rate plus 3% per annum and is stated at its fair value as at the balance sheet date. 13
Intangible fixed assets
Patents $
Goodwill $
Trademarks $
Total $
423 -
2,546,996 -
19,302 (19,302)
2,566,721 (19,302)
At December 31, 2011
420
2,534,233
-
2,534,653
At January 1, 2012 Exchange differences
420 14
2,525,848 93,447
-
2,526,268 93,461
At December 29, 2012
434
2,619,295
-
2,619,729
Amortisation At January 2, 2011 Amortisation on disposals Charge for the period
25 22
-
385 (385) -
410 (385) 22
At December 31, 2011
47
-
-
47
At January 1, 2012 Charge for the period
47 21
-
-
47 21
At December 29, 2012
68
-
-
68
Net book value At December 29, 2012
366
2,619,295
-
2,619,661
At December 31, 2011
373
2,534,233
-
2,534,606
At January 1, 2011
398
2,546,996
18,917
2,566,311
Cost At January 2, 2011 Disposals
The goodwill arises on the acquisition of Winfruit Limited by Winfresh (UK) Limited.
47 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars) 14
Property, plant and equipment Leasehold improvements
Land and buildings
Plant and machinery
Office furniture and equipment
Computer equipment
Motor vehicles
Total
$
$
$
$
$
$
$
Cost At January 2, 2011 Exchange differences Additions Adjustments to costs Disposals
7,877 -
26,220,434 12,282,564 (150,411) (8,808) 11,908,881 2,596,694 (118,717) (5,199) (81,000)
5,110,161 4,053 1,279,264 (99,324) (14,100)
3,543,992 1,718 269,905 (94,451) (17,650)
1,836,980 49,002,008 701 (152,747) 398,442 16,453,186 (467,439) (785,130) (346,965) (459,715)
At December 31, 2011
7,877
37,860,187
14,784,251
6,280,054
3,703,514
1,421,719
At January 1, 2012 Exchange differences Additions Adjustments to costs Disposals Revaluation
7,877 -
37,860,187 14,784,251 925,903 183,460 149,952 (988,933) 979,516 (118,716) (57,912) (80,345) -
6,280,054 195,783 452,823 -
3,703,514 58,399 210,699 (1,275,293) -
At December 29, 2012
7,877
37,598,096
16,039,267
6,928,660
2,697,319
1,381,544
Depreciation At January 2, 2011 Adjustments to depreciation On disposals Charge for the period
7,877 -
894,979 (56,190) 765,173
5,141,472 (5,199) 1,678,803
3,981,738 (99,324) (5,828) 611,020
2,737,387 (94,451) (11,365) 440,109
1,251,251 14,014,704 (467,439) (722,603) (272,348) (289,541) 259,208 3,754,313
At December 31, 2011
7,877
1,603,962
6,815,076
4,487,606
3,071,680
770,672
At January 1, 2012 Exchange differences Adjustments to depreciation On disposals Charge for the period
7,877 -
1,603,962 45,793 (196) (118,716) 579,634
6,815,076 144,972 (678) (30,344) 2,218,130
4,487,606 149,174 700,252
3,071,680 42,748 (1,272,200) 328,804
770,672 16,756,873 18,225 400,912 (874) (35,962) (1,457,222) 253,406 4,080,226
At December 29, 2012
7,877
2,110,477
9,147,156
5,337,032
2,171,032
1,006,341
19,779,915
Net book value At December 29, 2012
-
35,487,619
6,892,111
1,591,628
526,287
375,203
44,872,848
At December 31 2011
-
36,256,225
7,969,175
1,792,448
631,834
651,047
47,300,729
At January 1, 2011
-
25,325,455
7,141,092
1,128,423
806,605
585,729
34,987,304
64,057,602
1,421,719 64,057,602 33,564 1,397,109 813,474 (9,417) (73,739) (1,525,660) (80,345) 64,652,763
16,756,873
48 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
15
Investments in joint ventures and associates December 29 December 31 2012 2011 $ $ At beginning of period Share of (loss)/profit in joint ventures and associates Share of joint venture interest receivable Share of joint venture finance costs Share of tax in joint ventures and associates Share of actuarial losses Dividends Currency translation adjustment At end of period
56,742,144 (48,365,703) 820,227 (698,791) (726,016) (1,071,621) 5,116,919
54,239,162 8,594,215 (2,379,130) (1,658,055) (2,096,150) 42,102
11,817,159
56,742,144
The Group's share of the results of its joint ventures and its share of assets and liabilities are as follows: Assets $
Liabilities $
Revenues $
At December 29, 2012 Windward Isles Banana Company Holdings (Jersey) Limited Windward Isles Banana Company (UK) Limited
8,251,365 64,950,156
989,034 60,826,647
115,560,411
At December 31, 2011 Windward Isles Banana Company Holdings (Jersey) Limited Windward Isles Banana Company (UK) Limited
29,471,869 88,667,145
1,136,113 56,795,184
119,379,370
Windward Isles Banana Company (UK) Limited ("WIBUK") and Windward Isles Banana Company Holdings (Jersey) Limited ("WIBJ") are incorporated in the United Kingdom and Jersey respectively, on a 50% joint-venture basis with Fyffes Plc for the acquisition of the banana operating division of the Geest Group of Companies.
49 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 2012 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
16
Other investments
December 29 December 31 2012 2011 $ $
At beginning of year Impairment loss
2,936,329 (282,329)
2,936,329 -
At end of year
2,654,000
2,936,329
Vincyfresh Limited, one of the group companies, invested in a property now valued at $2,654,000 located at Diamond to operate a snack food factory. On February 28, 2011 Vincyfresh Crisps Ltd was incorporated and on March 18, 2011 the property was registered as being owned by Vincyfresh Crisps Ltd. Vincyfresh Crisps Ltd is a 100% owned subsidiary of Vincyfresh Limited. Vincyfresh Crisps Ltd has not traded since its incorporation . 17
Trade and other payables
Trade payables Other payables Accrued expenses
December 29 December 31 2012 2011 $ $ 11,517,230 2,077,258 8,800,430
12,027,210 642,243 8,981,240
22,394,918
21,650,693
50 GROWING...CARING...SERVING
Winfresh Limited
Notes to consolidated financial statements
WINFRESH LIMITED
(continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
As of DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars)
DECEMBER 29, 2012
(Expressed in Eastern Caribbean Dollars)
18
Loans and borrowings
December 29 December 31 2012 2011 $ $
Bank loans Other loans
Analysis of loans Wholly repayable within five years
Loan maturity analysis In more than two years but not more than five years
700,000
27,466,856 811,331
700,000
28,278,187
700,000
28,278,187
700,000
28,278,187
700,000
28,278,187
The aggregate amount of loans and borrowings for which security has been given amounted to $28,232,459 (see note 6) (December 31, 2011 - $27,466,856), which are secured by way of a debenture over the subsidiary companies' long leasehold property and improvements, freehold land and buildings and equipment, and guarantees by given the ultimate parent company. Bank loan of $21,737,000 bears interest at LIBOR plus 2.5%; bank loan of $6,495,459 bears interest at 8.5% per annum. Other loans of $700,000 are unsecured, interest free and no fixed repayment terms. 19
Deferred income tax asset Deferred income taxes are calculated in full on temporary differences under the liability method using a principal tax rate of 24% (December 31, 2011 - 26%). The movement on the deferred tax (asset) account is as follows: December 29 December 31 2012 2011 $ $ At beginning of year Consolidated statement of income charge (Note 28) Exchange difference
524,415 (63,130) 18,120
246,969 288,429 (10,983)
At end of year
479,405
524,415
Deferred taxes arise from decelerated capital allowances in the United Kingdom.
51 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
20
Share capital
Subscribed 500 ordinary shares of $10,000 each 1,500 5% non-cumulative preference shares of $10,000 each
21
December 29 December 31 2012 2011 $ $
5,000,000 15,000,000
5,000,000 15,000,000
20,000,000
20,000,000
Finance costs January 1 January 2 2012 2011 to to December 29 December 31 2012 2011 $ $ On bank loans and overdrafts Share of joint venture finance costs Other interest
22
1,546,205 698,791 145
1,052,332 34,433
2,245,141
1,086,765
Other (losses) / gains, net
Foreign exchange gains / (losses) - Unrealised (losses) / gains on translation of balances - Realised losses on transactions (Loss)/gain on disposal of property, plant and equipment Loss on disposal of intangible assets Loss on revaluation of property, plant and equipment Discount on acquisition of subsidiary
January 1 January 2 2012 2011 to to December 29 December 31 2012 2011 $ $ 2,133,600 406,009 7,860 (362,674) 1,748,250
(175,500) 339,540 (3,116) (19,357) -
3,933,045
141,567
52 GROWING...CARING...SERVING
Winfresh Limited WINFRESH LIMITED
Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 201229, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
23
Other income January 1 January 2 2012 2011 to to December 29 December 31 2012 2011 $ $ Agency fees and commissions Interest income Share of joint venture interest Miscellaneous income
24
91,422 820,227 121,347
19,675 405,049 854,738
1,032,996
1,279,462
Financial commitments At 29 leases asas follows: 29 December December2012 2012the theGroup grouphad hadlease leasepayments paymentsdue dueunder underoperating operating leases follows:
Land and buildings Other December 29 December 31 December 29 December 31 2012 2011 2012 2011 $ $ $ $ Within one year Between two and five years In over five years
210,000 579,000 325,500
93,032 -
76,942 40,397 -
179,057 111,406 -
1,114,500
93,032
117,339
290,463
53 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED
Notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 2012 29, 2012
(expressed in Eastern Caribbean dollars)
(Expressed in Eastern Caribbean Dollars)
25
Non-controlling interest
Minority share of retained deficit a beginning of period Minority share of pre-acquisition deficit Minority share of equity in subsidiary company Minoriy share of losses for the period Reverse minority share of losses on becoming wholly owned Reverse minority share of equity on becoming wholly owned Exchange difference Minority share of retained deficit at end of period
December 29 December 31 2012 2011 $ $ 385,796 (716,583) 1,604,922 (1,750,000) (7,533)
1,616,549 (2,182,173) 3,204,192 (2,252,772) -
(483,398)
385,796
December 29 December 31 2012 2011 $ $ Minoity share of retained deficit Minority share of pre-acquisition deficit Minority share of equity in subsidiary company
(1,505,417) (2,182,173) 3,204,192
(2,386,223) (2,182,173) 4,954,192
(483,398)
385,796
54 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (continued)
As of DECEMBER DECEMBER 29, 201229, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
26
Expenses by nature
December 29 December 31 2012 2011 $ $
Direct costs Salaries and wages Directors' fees Rent and service charges Communication Insurance Light and heat Repairs and renewals Security Printing, postage and stationery Advertising and publicity Telephone Information technology support costs Vehicle expenses Travel and entertaining Subsistence Legal and professional fees Audit fees Bank charges Bad debt expenses Other expenses Subscriptions and donations Research and development Depreciation and amortisation
192,297,019 9,211,425 1,544,139 384,992 15,699 254,107 429,698 208,531 72,013 105,652 347,751 192,792 157,271 66,535 703,194 106,865 254,128 487,469 170,653 358,423 109,304 89,063 75,663 4,079,374
208,124,057 10,929,087 1,401,160 873,207 39,139 439,055 435,833 381,111 97,032 133,262 73,138 205,108 479,209 113,814 635,027 88,387 748,054 533,901 325,154 341,588 350,479 49,616 91,185 3,754,313
Total cost of goods sold, administrative and general expenses
211,721,760
230,641,916
Cost of goods sold Distribution and selling Administrative and general expenses
187,751,114 12,278,003 11,692,643
201,269,090 13,093,794 16,279,032
Total cost of goods sold, administrative and general expenses
211,721,760
230,641,916
55 GROWING...CARING...SERVING
Winfresh Limited
Notes to consolidated financial statements
WINFRESH LIMITED
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 (expressed in Eastern Caribbean dollars)
DECEMBER 29, 2012
(Expressed in Eastern Caribbean Dollars)
27
Employee benefit expenses December 29 December 31 2012 2011 $ $ Salaries and wages Directors' fees Social security costs Other staff costs
28
Income tax expense
7,996,582 1,544,139 699,651 515,192
9,252,122 1,401,160 877,791 799,174
10,755,564
12,330,247
December 29 December 31 2012 2011 $ $
Current tax Share of joint venture tax Adjustment for prior year Deferred tax charge (Note 19)
118,666 711,574 63,130
2,379,130 (2,518) (288,429)
Current tax charge
893,370
2,088,183
The tax on the Group's profit before tax differs from the theoretical amount that would arise using the applicable standard rate as follows: December 29 December 31 2012 2011 $ $ Loss before income tax
(51,329,849)
(8,315,209)
Tax calculated at standard rate of 30% Tax effect of consolidation adjustments Exempt profit Expenses not deductible for tax purposes Tax losses uilised Deferred tax not recognised Other tax adjustments
(15,398,955) 1,109,865 13,087,501 142,967 (320,089) 774,704 1,497,377
(2,494,563) 2,626,013 (2,234,496) 46,525
893,370
2,088,183
Tax charge
- 36 -
2,090,701 2,054,003
56 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER DECEMBER 29, 201229, 2012 (expressed in Eastern Caribbean dollars) (Expressed in Eastern Caribbean Dollars)
29
Pension costs The subsidiary company, Winfresh (UK) Limited, is party to a multi-employer defined benefit pension scheme and the scheme's actuaries have confirmed to the directors that they would be unable to supply the trustees of the pension scheme with any allocation of the pension scheme's assets and liabilities between the pension scheme's participating employers on a reasonably consistent basis. Consequently, in accordance with International Accounting Standard No. 19 (IAS 19) the scheme has been accounted for as if it were a defined contribution pension scheme. The constitution of the scheme requires that a triennial valuation is performed by independent actuaries and the last such valuation was performed at December 31, 2009. As part of this valuation the trustees had previously produced a Statement of Funding Principles [SFP] in April 2008, which sets out the trustees' policy for ensuring that the scheme's statutory funding objective is met. The valuation performed at December 31, 2009 revealed that, on the SFP basis, there was a funding deficit of $20,376,000 in the scheme at that date [previous triennial valuation at December 31, 2006 - a funding deficit of $15,390,000 at that date when restated to the SFP basis]. In each case the funding level was less than the 90% required by the minimum funding requirement rules. A supplementary IAS 19 report prepared by the independent actuaries at December 31, 2010 estimates that the pension scheme deficit at December 31, 2010 stated on a consistent basis but now also taking into account the effect of IFRS Interpretations Committee Update 14 (IFRIC 14) was $14,888,000. As before, the funding level was less than the 90% required by the minimum funding requirement rules. The trustees have determined to keep the pension fund's investment strategy under close review and the participating employers have determined that they will do all that they can to preserve accrued entitlements within the scheme via an agreed schedule of revised employer contributions. The participating employers are currently in discussion regarding further steps that may be taken to address the deficit in the scheme. The assets of the scheme are held separately from those of the subsidiary company in an independently administered fund. The pension cost charge in the consolidated statement of comprehensive income represents contributions payable by the subsidiary company to the fund for the period amounted to $177,254 (period to December 31, 2011 - $369,157). No contributions were payable to the fund at the balance sheet date (at December 31, 2011 - ÂŁNil).
57 GROWING...CARING...SERVING
Winfresh Limited
WINFRESH LIMITED Notes to consolidated financial statements
(continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of DECEMBER 29, 2012 DECEMBERin29, 2012 Caribbean dollars) (expressed Eastern (Expressed in Eastern Caribbean Dollars)
30
Guarantees The subsidiary company, Winfresh (UK) Limited, has provided a payment guarantee to the UK tax authority, HM Revenue & Customs. At the balance sheet date the maximum amount payable under this guarantee totalling $1,065,230 (December 31, 2011 - $1,048,075).
31
Contingent liabilities
31.1 The Group is contingently liable in respect of disputed liabilities that may be due under the banana contract sales agreement with the banana companies. These amounts are currently being negotiated and the full amount of the liability, if any, cannot be determined at the balance sheet date. Any settlements arising from these disputed liabilities are expected to be accounted for as a charge against income in the period in which the settlement occurs. 31.2 The Group has agreed to continue to provide financial support to a subsidiary undertaking for the foreseeable future, being a period of at least twelve months from the date of approval of these consolidated financial statements, by way of deferment of the amounts owed by the subsidiary undertaking or by other means, so as to enable the subsidiary undertaking to continue in operation as a going concern. At the statement of financial position date the amount owed by this subsidiary undertaking was $2,574,162 (at December 31, 2011 - $1,679,620), for which no provision for impairment has been made. 31.3 The Group has entered into a recovery plan designed to restore the minimum funding level of the defined benefit pension scheme of which it is one of the participating employers, by way of a schedule of revised employer contributions. At the currently agreed level of contribution the group is liable to make a total employers contribution of $177,254 per year. No provision has been made in these consolidated financial statements in respect of this liability.
58
Notes
Winfresh Limited Agricultural Complex, Odsan, P O Box 115, Castries, Saint Lucia WI Tel: +1 758 457-8600 Fax: +1 758 453-1638 www.winfresh.net