ANNUAL
REPORT & ACCOUNTS
2016
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2013 1
ANNUAL REPORT 2016
Corporate Profile and Group Operations
Financial Highlights
Chairman’s Statement
Financial Review
Shareholder Information
Board of Directors
Corporate Information
Directors’ Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the consolidated financial statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the accounts
Consolidated Historical Financial Summary
FINANCIAL CALENDAR 2017
Page
1
2
3 - 5
6 - 7
8 - 9
10
11
12 - 22
23
24 - 25
26 - 27
28
29
30
31 - 76
77
78
79 - 83
84
Announcement of preliminary results
Annual Report posted to shareholders
Annual General Meeting
23 March 2017
30 March 2017
10 May 2017
Announcement of interim results
14 September 2017
CORPORATE PROFILE
Background
Norish plc is a leading warehousing company dedicated to serving the food manufacturing, distribution
and retailing sectors. Norish was founded in 1975 and became a public company in 1986. Its shares are
listed on the Alternative Investment Market of the London Stock Exchange.
Norish mainly operates strategically located temperature controlled storage centres, each of which
provides storage, freezing, picking, order assembly services to food companies engaged in processing,
wholesaling and retailing.
Norish is also involved in commodity trading (Meat, Dairy and Fish).
Norish has commenced a dairy farming operation in Kilkenny, Ireland.
Group Operations
Kieran Mahon – Group Managing Director - kieran.mahon@norish.com
Northern Industrial Estate
Bury St Edmunds
Suffolk IP32 6NL
Tel: 01293 862498
Mob: 00 353 87 987 9111
Locations and Segments
North West
n Brierley Hill, West Midlands (Cold store)
n Wrexham, Clwyd (Cold store)
South East
n Bury St. Edmunds, Suffolk (Cold store)
n Braintree, Essex (Cold store)
n Lympne, Kent (Cold store)
n Gillingham, Kent (Cold store)
Commodity Trading
n Newry, Northern Ireland (Townview Foods Limited offices)
n Dublin, Ireland (Foro International Connections Limited offices)
Dairy Farming
n Kilkenny, Ireland (Cantwellscourt Farm)
Discontinued Operations
n Leeds, Yorkshire (Cold store) – sold during 2016
n Dublin, Ireland (FMCG business based at Foro International Connections Limited offices)
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 1
FINANCIAL HIGHLIGHTS
Revenue - Continuing operations
Operating profit-continuing
Profit before tax-continuing
Basic earnings per share – continuing (pence)
Diluted earnings per share – continuing (pence)
Net debt to EBITDA (times)
Dividend paid per share
- interim for current year
- final for previous year
Capital employed
Shareholders’ funds
Net borrowings
2016
£’000
2015
£’000
32,098
25,145
872
633
1.5p
1.5p
3.5
839
560
2.8p
2.8p
2.2
Nil
1.50c
Nil
1.50c
1.50c
1.50c
£’000
15,261
5,244
£’000
15,327
3,212
20,505
18,539
Gearing – excluding goodwill (see Note 1 below)
41%
25%
Note 1
The above gearing figures are expressed as net borrowings (total borrowings less cash) divided by net assets
(excluding goodwill).
2 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
CHAIRMAN’S STATEMENT
I am pleased to present the Annual Report of Norish Plc for 2016.
Financial Highlights
• Total revenue increased by 27.9% to £32.1m (2015: £25.1m).
• Revenue from commodity trading increased by 46.6% to £19.5m (2015: £13.3m).
• Revenue from our continuing temperature controlled divisions increased by 6.8% to £12.6m
(2015: £11.8m).
• Operating profit increased by 3.6% to £0.87m (2015: £0.84m).
• Net assets unchanged at £15.3m (2015: £15.3m).
• Net debt increased to £5.2m (2015: £3.2m).
Operational Highlights
• The performance of the cold store division was ahead of 2015 by 9.4%
• The performance of the commodity division was ahead of 2015 by 48%
• We invested £1.7m of the funds raised in December 2015 by the end of December 2016.We
invested £0.8m in our temperature controlled division, £0.6m in dairy infrastructure along with
£0.3m in the herd for the dairy farm in Kilkenny
• We continue to invest in projects which provide short term payback and in the build out of our
dairy business.
North West Division
The North West cold store division which comprises the freehold sites at Wrexham and Birmingham
performed well in 2016. This was mainly as a result of a buoyant market in China for most of 2016.
China is the U.K.’s biggest export market for fifth quarter pig meat. Exports of pig meat to China have
increased more than fourfold since the UK started to export there in 2011. Two of the three licensed cold
stores in the U.K. are the Norish plc owned properties at Wrexham, North Wales and Brierley Hill,
Birmingham.
South East Division
The South East division, which comprises the sites at Bury St. Edmunds (freehold), Braintree (leasehold),
Gillingham (long term leasehold at a peppercorn rent) and East Kent (leasehold) performed below the
same period last year. Contribution was mainly impacted by a refurbishment programme at the Bury St
Edmunds site, which we completed in December 2016.
Commodity Trading
Our commodity trading division which consists of Townview Foods Limited and Foro International
Connections Limited (“Foro”) contributed £0.5m for the period, up from £0.4m for the same period last
year.
Townview Foods Limited trades in protein products, mainly beef, pork, lamb and chicken. Sales from
pork increased by £3m during the year, sales from beef increased by £1.9m, and sales from lamb
increased by £0.6m. Townview Foods Limited generated a contribution of £0.6m for the period, against
£0.4m for the same period last year, and sales of £18.5m, against £12.3m for the same period last year.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 3
CHAIRMAN’S STATEMENT (CONTINUED)
Foro accounted for £1m of the sales, unchanged from 2015. Foro broke even, unchanged from last year.
Foro trades mainly in fish, dairy and its currently developing a product to sell to the ready to drinks
market.
We are continually investing in people to grow this division.
Dairy
Our low cost grass based dairy farm was successfully converted from a tillage/suckler farm in the second
half of 2016.
Discontinued
During 2015 the Group agreed the sale of the Leeds site for £0.4m net. The sale completed in March
2016. This site was not part of the future plans for the business. Losses in respect of this property are
included in discontinued activities.
During 2016, Foro discontinued trading in the FMCG market due to high working capital requirements,
currency fluctuations, and unacceptable margins. The 2015 comparative figures have been adjusted to
reflect the reclassification.
Outlook
2016 was a year of considerable progress for the group. Commercial decisions made in previous years,
combined with a new, focused, management approach and a strengthening of the Group’s Statement of
Financial position, has ensured that Norish is now in a position to develop its business in ways that were
previously unavailable to the group.
We have been very encouraged by the excellent start made in the first two months of 2017 by our two
main Trading Divisions - Temperature Controlled Storage and Protein Trading (Townview Foods).
The dairy division is in the early stages of developing its business model and is putting in place an
experienced senior executive team to manage and grow this business.
Through our subsidiary, Foro International Connections Limited, we are developing retail and food
service markets, both in Ireland and the U.K. in conjunction with three significant European
manufacturers of fruit drinks, health smoothies and RTD (ready to drink) coffee. This development fits in
well with our existing U.K. cold store locations.
At this juncture, our cold stores comprise the greatest proportion of our property, plant and equipment
(97%). The cold store division also represents the most immediate opportunity to improve profitability
and returns for the group, something the Board is acutely aware of. Through active management of our
cold store division, we are looking at every facet of our cost base, implementing changes and building an
ever better, more balanced, more diversified business.
At this juncture we consider it appropriate to increase guidance for 2017 to a range of 2.75p to 3p (fully
diluted adjusted eps).
4 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
CHAIRMAN’S STATEMENT (CONTINUED)
Financial Review
Total equity at 31 December 2016 stood at £15.3m (2015: £15.3m). Net debt at 31 December 2016 was
£5.2m compared to £3.2m at 31 December 2015.
Dividend
The board recommends the payment of a final dividend of 1.50 €cent per share. This will be paid on 20
October 2017 to those shareholders on the register on the 29 September 2017. It will bring the total
dividend in respect of the financial year to 1.50 €cent per share, unchanged from last year.
Brexit
The United Kingdom voted to leave the EU on the 23rd of June, last year. As of now we have not seen
any appreciable change to our business, as a result of that vote.
On behalf of the board, I would like to thank the management team and staff for their commitment and
contribution in 2016.
Ted O’Neill
Chairman
22 March 2017
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 5
FINANCIAL REVIEW
The number of pallets handled in increased by 9%, and we handled 18% additional pallets for blast
freezing in 2016. This will allow the Group to positively position for future growth. Norish plc is one
of only two companies in Britain who can presently provide blast freezing services for pig meat for
China.
The significant feature of the year is the investment in the dairy farming business in Kilkenny.
Sales
Total Group revenue increased by 27.9% to £32.1m (2015: £25.1m). Temperature controlled revenues
increased by 6.8% to £12.6m (2015: £11.8m). Revenues were up mainly as a result of an increase in blast
freezing volumes. Revenues in the commodity division increased by 46.6% to £19.5m (2015: £13.3m).
Townview Foods mainly accounted for the increased sales.
Gross profit
Gross profit unchanged at £1.3m (2015: £1.3m).
Operating profit
Operating profit increased to £0.9m (2015: £0.8m).
Finance expense (net)
Finance expense decreased to £0.27m (2015: £0.30m). The decrease is mainly attributable to the cash
generated from the fund raise in December 2015.
Loss from discontinued operations
As part of the Group’s strategy to exit the ambient sector we recorded a loss of £0.1m (2015: £0.3m).
In 2016, The Group has exited the FMCG market and recorded a loss of £0.1m (2015: £Nil).
Earnings per share
The basic earnings per share fell to 1.5p (2015: 2.8p). The earning per share was impacted by the
additional shares issued in December 2015.
Capital
During the year we invested £1.7m (2015: £0.5m) £0.6m in capital outlay along with £0.3m in the herd
for the dairy farm in Kilkenny and £0.8m in routine capital expenditure in the temperature controlled
division.
Cash Position
Net debt increased to £5.2m (2015: £3.2m). Operating activities generated £0.3m (2015: absorbed £0.2m)
and financing activities absorbed £0.9m (2015 generated: £4.7m). Investment in assets was made of
£1.7m (2015: £0.5m). Investment of £0.3m was made in the dairy herd.
6 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
FINANCIAL REVIEW (CONTINUED)
Dividend
The board recommends the payment of a final dividend of 1.50 €cent per share. This will be paid on the
20 October 2017 to those shareholders on the register on the 29 September 2017. It will bring the total
dividend in respect of the financial year to 1.50 €cent per share unchanged from last year.
Treasury policy and management
The treasury function, which is managed centrally, handles all Group funding, debt, cash, working capital
and foreign exchange exposures. Group treasury policy concentrates on the minimisation of risk in all of
the above areas and is overseen and approved by the Board. Speculative positions are not taken.
Financial risk management
The Group’s financial instruments comprise borrowings, cash, derivatives, and various items, such as
trade receivables, trade payables etc., that arise directly from its operations. The main purpose of the
financial instruments not arising directly from operations is to raise finance for the Group’s operations.
The Group may enter into derivative transactions such as interest rate swaps, caps or forward foreign
currency transactions in order to minimise its risks. The purpose of such transactions is to manage the
interest rate and currency risks arising from the Group’s operations and its sources of finance.
The main risks arising from the Group’s financial instruments are interest rate risk and, liquidity risk. The
Group’s policies for managing each of these risks are summarised below.
Interest rate risk
The Group finances its operations through a mixture of retained profits, bank and other borrowings at both
fixed and floating rates of interest, and working capital. The Group determines the level of borrowings at
fixed rates of interest having regard to current market rates and future trends. At the year-end, £3.47m term
loans of which, £0.9m are at floating base rate plus a bank margin of 1.2% and £0.83m are at floating base
rate plus a bank margin of 1.75% and £0.5m are floating at bank base rate plus a bank margin of 2.75% and
£1.24m are floating at bank base rate plus a margin of 3%. The Group holds an interest rate swap on £3m at
1.03% against Bank of England base rate which expires in June 2017.
Liquidity risk
The Group’s policy is that, in order to ensure continuity of funding, a significant portion of its borrowings
should mature in more than one year. At the year-end, 59% of the Group’s borrowings were due to
mature in more than one year. The Group achieves short-term flexibility by means of invoice finance and
overdraft facilities.
Aidan Hughes
Finance Director
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 7
SHAREHOLDERS INFORMATION
Shareholder analysis at 22 March 2017
Number of shares
Number of
accounts
Percentage
of accounts
Number of
shares (000)
Percentage
of shares
1 – 1,000
1,001 – 10,000
10,001 – 100,000
Over 100,000
Total
108
82
57
568
303
36
27
19
18
100
48
321
2,089
27,502
29,960
0
1
7
92
100.0
Share price data (€)
Year ended 31 December 2016
46p (€0.52)
32.5p (€0.42)
43.5p (€0.51)
Year ended 31 December 2015
56.75p (€0.78)
35p (€0.45)
42.5p (€0.58)
High
Low
31 December
The market capitalisation of Norish plc at 31 December 2016 was £12.4m (€14.6m) compared with
£12.1m (€16.5m) at 31 December 2015, and £11m (€12.6m) at 22 March 2017.
Investor relations
Investor enquiries should be addressed to Aidan Hughes, Company Secretary, at:
Ø Norish plc, Northern Industrial Estate, Bury St Edmunds, Suffolk, IP32 6NL
Ø Email: aidan.hughes@norish.com
Registrars
Administrative enquiries relating to the holding of Norish shares should be directed to the Company’s
Registrars whose address is:
Ø Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands,
B63 3DA.
Ø Telephone: +44 (0121) 585 1131
8 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
SHAREHOLDERS INFORMATION (CONTINUED)
Amalgamation of accounts
Shareholders who have multiple accounts in their name and who receive duplicate mailings should contact
the Company’s Registrars in order to have these accounts amalgamated.
Dividends
Dividends when payable to shareholders will be paid net of withholding tax, which is currently 20%.
Provided certain administrative procedures are adhered to, a withholding tax exemption will apply to
certain classes of shareholder.
Individuals who are tax resident in Ireland are not entitled to a withholding tax exemption.
CREST
Norish participates in the CREST share settlement scheme. Shareholders may continue to hold paper
share certificates or they may hold their shares electronically.
Annual General Meeting
The Annual General Meeting will be held at the premises South Bank House, Barrow Street, Dublin 4 on
Wednesday 10 May 2017 at 11am.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 9
BOARD OF DIRECTORS
Executive Directors
Executive Chairman
Ted O’Neill (65) was appointed to the board and became Chairman in 2003. He is an investor in a number
of other companies based in Ireland.
Managing Director
Kieran Mahon (51) Kieran was appointed to the Board on 19 August 2015 and joined Norish from J+E
Davy, where he was an equity analyst. Kieran holds a Masters Degree in Business Administration from
Dublin City University.
Finance Director & Company Secretary
Aidan Hughes (52) joined Norish as Group Accountant in 1996 and was appointed Finance Director in
September 2006. He has carried out the role of Company Secretary since 2004. He is a Chartered
Accountant and has previous experience in the travel industry.
Non-Executive Directors
Torgeir Mantor (60) was appointed to the board in 1993. He is Chairman of Norse Group, USA and
VisionMonitor Software LLC, both in Houston, Texas, and is a director of Tore B. Mantor AS, a
company based in Norway.
Willie McCarter (69) was appointed to the board in 2004, and was subsequently appointed as the Senior
Independent Non-Executive Director. He was a director of Cooley Distillery plc up to January 2012 and
was formerly Chief Executive of Fruit Of The Loom International, Chairman of the International Fund for
Ireland and the Enterprise Equity Venture Capital Group.
Seán Savage (70) was appointed to the board in 2012 and has previous experience in the food industry,
having started his career in 1970 with Cadbury plc, where he worked as a plant manager and supervisor
across a number of Cadbury's Irish plants. He was general manager of Manor Farm Chickens from 1985
to 1994, before establishing Eatwell UK in 1995. He sold the company to Goodman Group in 2003 and
remained with the company until 2004. In 2005, Seán established Deasuin Teoranta, a food and
environmental investment consultancy practice, which has undertaken projects on behalf of Enterprise
Ireland amongst others.
10 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
Solicitors
Mason Hayes & Curran
South Bank House
Barrow St
Dublin 4
Nomad and Brokers
Davy
Davy House
49 Dawson Street
Dublin 2
Bankers
HSBC Bank plc
Bank of Ireland plc
Chartered Accountants and Statutory
Audit Firm
Grant Thornton
Chartered Accountants
Molyneux House
Bride Street
Dublin 8
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
West Midlands
B63 3DA
CORPORATE INFORMATION
Directors
Ted O’Neill – Executive Chairman
Kieran Mahon – Group Managing Director
Aidan Hughes – Finance Director
Torgeir Mantor (Norwegian) *
Willie McCarter *
Seán Savage*
* non-executive
Company Secretary
Aidan Hughes
Audit Committee
Torgeir Mantor
Willie McCarter
Remuneration Committee
Torgeir Mantor
Willie McCarter
Nomination Committee
Consists of all Directors
Registered Office
6th Floor
South Bank House
Barrow St
Dublin 4
Operational Head Office
Northern Industrial Estate
Bury St Edmunds
Suffolk
IP32 6NL
Domicile
Republic of Ireland
Company Registration
Registered in Ireland under
Registration number - 51842
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 11
DIRECTORS’ REPORT
The Directors present their Annual Report together with the audited financial statements of the Group for
the financial year ended 31 December 2016.
Principal Activities and Review of Business
Norish plc is a provider of temperature controlled, ambient storage, commodity trading and related
services to the food industry in the United Kingdom.
Townview Foods Limited is a commodity trading company based in Newry, Northern Ireland. It procures
supplies of raw and cooked beef, mutton, lamb, pork and poultry products from around the world in order
to supply major food manufacturing and wholesale companies across the UK, including Northern Ireland.
Townview Foods Limited, the main component of our commodity division, which we purchased in
October 2012 contributed £556,000 (2015: £376,000). Increased turnover at lower margins helped to
improve the contruibution.
The North West cold store division which comprises the freehold sites at Wrexham and Birmingham
performed well in 2016. This was mainly as a result of growth in exports of pig meat to China.
The South East division, which comprises the sites at Bury St. Edmunds (freehold), Braintree (leasehold),
Gillingham (long term leasehold at a peppercorn rent) and East Kent (leasehold) performed below last
year, reflecting the short term costs of preparing for a new longer term contracted customer.
Across our two temperature controlled divisions the number of pallets into our stores increased by 9%,
blast freezing volumes increased 18% and our closing customer stocks decreased by 7%.
Details of the Group’s subsidiary undertakings are set out in Note 28 to the financial statements.
Further commentaries on the Group’s development and performance, including the principal risks and
uncertainties facing the business, are contained in the Chairman’s Statement and the Financial Review on
pages 3 to 7.
Dividends
The board recommends the payment of a final dividend of 1.50 €cent per share. This will be paid on the
20 October 2017 to those shareholders on the register on the 29 September 2017. It will bring the total
dividend in respect of the financial year to 1.50 €cent per share compared with 1.50 €cent per share last
year.
Post Balance Sheet Events
No significant events have taken place since the year-end that would result in adjustment to the financial
statements or the inclusion of a note thereto.
12 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
DIRECTORS’ REPORT (CONTINUED)
Transactions with Related Parties
Consultancy services totalling £Nil (2015: £1,000) were provided by a relative of a director during the
year. There was £Nil outstanding as at 31 December 2016 (2015: £nil).
Creditor payment policy
It is the Group’s policy to abide by the payment terms agreed with suppliers whenever it is satisfied that
the supplier has provided the goods and services in accordance with agreed terms and conditions.
The average supplier payment terms for 2016 for the Group was 43 days (2015: 44 days). This was
calculated by taking the year end creditors listing as a percentage of the total supplies and services
invoiced during the year, multiplied by 365 days.
Key risks and uncertainties
Please refer to the Financial Review on pages 6 to 7 to understand the key financial risks facing the Group
and management’s approach to same.
In respect of operational risks our largest customer accounts for 12.8% (2015 – 11.2%) of the Group’s
turnover from continuing operations. However, the directors are satisfied that this business could be
replaced if it was ever lost.
In the event of there being a power supply failure at one of our storage sites, the majority of the operations
in our storage business will come to a standstill. Refrigeration plant, lights, computer and telephone
systems will not operate. Contingencies in place include alternative site operation for computer systems,
portable power generation for systems and lighting, commitment by power network operators to supply
emergency power generation.
In the event of a food related health concern in respect of key products bought and sold by Townview
Foods Limited, there could be a significant decrease in customer demand. To mitigate against this, a range
of products are bought and sold so as not to unnecessarily concentrate risk into one particular food group.
The majority of our commercial arrangements are non contractual. As a result, there is a risk that
customers could terminate agreements to either use Norish facilities or buy Norish goods without giving
notice, thus placing revenue streams at risk. To mitigate against this, regular review meetings are held
with all major customers in order to determine trends and changes in customer's requirements.
Key performance indicators
For our continuing operations, the number of pallets into our sites increased by 9% to 346,379, blast
freezing volumes increased by 18% to 126,855 pallets and closing customer stocks at the year end
decreased by 11% to 42,507 pallets. Our average energy price per unit increased by 15% in 2016 and the
number of units consumed increased by 17% due mainly to the additional blast freezing volumes.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 13
DIRECTORS’ REPORT (CONTINUED)
Directors
The Board currently comprises the Executive Chairman, Managing Director, Finance Director and three
non-executive Directors. Under the criteria adopted by the Committee on Corporate Governance, Torgeir
Mantor and Sean Savage would not be perceived to be independent due to their interests in the
Company’s shares. None of the non-executive Directors are involved in the day-to-day management of
the Group.
The names of the Group’s Directors at 31 December 2016 together with brief biographical notes are set
out on page 10.
In accordance with regulation 90 (a) of the Company’s Constitution, Mr Ted O’Neill, Mr Torgeir Mantor
and Mr Willie McCarter retire by rotation, and being eligible, offers themselves for re-election. In
accordance with regulation 90 (b) of the Company’s Constitution, Mr Aidan Hughes retires, and being
eligible, offers himself for re-election.
The Executive Chairman, Group Managing Director and Finance Director have service contracts with the
Group companies that are terminable by either party giving 12 months’ notice. None of the non-executive
Directors have service contracts.
All directors have third party indemnity insurance in place.
Interests of Directors and Secretary
There were no contracts or arrangements during the year in which a Director of the Company was
materially interested and which were significant in relation to the Group’s business.
The interests, all of which are beneficial, of the Directors and the Secretary who held office at 31
December 2016 (including their respective family interests) in the share capital of Norish plc were as
follows:
Ted O’Neill
Kieran Mahon
Aidan Hughes
Torgeir Mantor *
Willie McCarter
Seán Savage
31 December 2016
Ordinary Shares
31 December 2015
Ordinary Shares
2,950,000
1,985,286
207,500
12,600
-
1,000,333
2,920,000
446,102
207,500
12,600
-
1,000,333
* Torgeir Mantor is a director of T. B. Mantor AS, which also holds 1,243,027 (2015: 1,243,027)
shares and is owned by the Mantor family.Torgeir Mantor is also a director and shareholder of
Vestergyllen AS, which holds 24,152 shares (2015: 24,152).
14 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
DIRECTORS’ REPORT (CONTINUED)
The interests of the Directors and Secretary in options, granted in accordance with the Company’s share
option scheme, to subscribe for ordinary shares in the Company, are as follows:
1 Jan 2016
Cancelled
/Lapsed
in year
Grant in
year
31 Dec
2016
Exercise
Price
Exercisable
from
Expiry
date
Aidan Hughes
110,000
‘ -
‘ -
110,000
58p
June 2011
June 2018
Total
110,000
‘ -
‘ -
110,000
The mid-market price of an ordinary share on 31 December 2016 was 43.5p (€0.51) and the price range
during the year was between 32.5p (€0.42) and 46p (€0.52). Apart from the interests disclosed above,
neither the Directors nor the Secretary had an interest at any time during the year in the share capital of
the Company or Group companies. There have been no changes in the above interests between 31
December 2016 and the date of this Report.
Pensions
Executive Directors are entitled to become members of the Group’s defined contribution pension scheme
or, if preferred, to receive payment of a fixed percentage of salary into an approved personal pension
scheme.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 15
DIRECTORS’ REPORT (CONTINUED)
Substantial shareholdings
At 22 March 2017 the Company had been advised of the following shareholdings in excess of 3% of its
issued share capital:
Miton Group Plc
Ted O’Neill
Kieran Mahon
John Teeling
Societe Generale Newedge UK Ltd
T.B. Mantor AS
Tom Cunningham
Seán Savage
Number of shares
4,765,237
Percentage held
15.9
2,950,000
1,985,286
1,364,465
1,410,253
1,243,027
1,049,497
1,000,333
9.80
6.25
4.55
4.71
4.15
3.50
3.33
Apart from these holdings, the Company has not been notified of any other interest of 3% or more in its
issued share capital.
Executive share option scheme
The percentage of share capital that can be issued under the scheme and the individual grant limits comply
with the published guidelines of the Irish Association of Investment Managers.
The aggregate nominal value of shares issued under the scheme may not exceed 10% of the nominal value
of the issued ordinary share capital. Between 1989 and 2011 the Company issued a total of 1,252,237
ordinary options.
To date 46,000 options have been exercised and 956,237 options have expired. At 31 December 2016
options were outstanding over 110,000 ordinary shares.
16 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
DIRECTORS’ REPORT (CONTINUED)
Group website
Our website, www.norish.com, provides our customers, shareholders and the general public with useful
information on the Group’s facilities and services, together with key financial data, company
announcements, etc.
Personnel development
The Group is committed to ensuring that its employees are capable of achieving the highest standards in
their employment by providing training at all levels for current and future business needs. Emphasis is
placed on training in key areas such as computer skills, safe driving of vehicles and the proper utilisation
of materials handling equipment. The Group seeks to ensure that all employees receive up-to-date
information on current business events and developments pertaining to their own work place.
Disabled employees
The policy of Norish plc is to offer the same opportunities to disabled people as to all employees in
respect of recruitment, promotion and career development depending on their skills and abilities.
Employees who become disabled will, wherever possible, be rehabilitated, retrained and redeployed if
necessary.
Electoral Act, 1997
The Group did not make any political contributions during the year.
Environmental policies
The Group continues to implement improved working practices with a view to minimising harmful
environmental impacts. It is committed to maintaining its efforts in the area of energy conservation by
way of improving the insulation within the cold store sites and replacing refrigeration doors with modern
highly efficient refrigeration doors. It is has also replaced one of its larger sites, West Midlands in 2012,
with a new highly efficient ammonia refrigeration system which will significantly reduce the power
consumption at the site.
Country of Incorporation
Norish plc was incorporated and is domiciled in the Republic of Ireland under company number 51842.
Significant Customers
During 2016, £4.12m or 12.8% (2015: £3.123m or 11.2%) of the Group’s revenues from continued
operations depended on a single customer in the commodity segment. (2015 : cold storage segment).
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 17
DIRECTORS’ REPORT (CONTINUED)
Corporate governance
The Directors are committed to the UK Corporate Governance Code (2014).
Principles of good corporate governance
The Directors are accountable to the shareholders for good corporate governance and the following
voluntary statement describes how the relevant principles of good governance set out in the 2014 UK
Corporate Governance Code in Norish plc.
Board of Directors
The Board of Directors comprises an Executive Chairman, Group Managing Director and Finance
Director and three Non-Executive Directors. On appointment all non-executive directors receive
comprehensive briefing documents on the Group and its operations, and further appropriate briefings are
provided to non-executive directors on an ongoing basis. Willie McCarter is the Senior Independent
Non-Executive Director.
It is the practice of the Group that the Board comprises at least two non-executive Directors.
Due to the small size of the board, all Directors are members of the Nomination Committee.
The Board takes the major strategic decisions and retains full effective control while allowing operating
management sufficient flexibility to run the business efficiently and effectively within a centralised
reporting framework.
Torgeir Mantor or Sean Savage would not be considered to be independent due to their interests in the
Company’s shares. However, it is the opinion of the Board that the Non-Executive Directors are
independent of management and have no business or other relationship which could interfere materially
with the exercise of their judgement.
The Board delegates to committees, which have specific terms of reference and which are reviewed
periodically, the responsibility in relation to audit and senior executive remuneration issues. Minutes of
these committees are supplied to all Directors for information and to provide the Board with an opportunity
to have its views taken into account.
The Board has a regular schedule of meetings together with further meetings when required. In addition,
there is a formal schedule of matters reserved specifically to the Board for its decision, including the
approval of the annual financial statements, budgets, significant contracts, significant capital expenditure
and senior management appointments.
The Non-Executive Directors meet with the Executive Chairman separately during the year to discuss the
business and strategy.
The Company Secretary is responsible to the Board for ensuring that Board procedures are followed and
that applicable rules and regulations are complied with. The Group’s professional advisors are available
for consultation by the Board as required. Individual Directors may take independent professional advice,
if necessary, at the Group’s expense.
The Executive Chairman holds regular business review meetings with Senior Management.
18 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
DIRECTORS’ REPORT (CONTINUED)
Attendance
The Board meets regularly and details of attendances by individual Directors at meetings of the Board and
its Committees during the year ended 31 December 2016 are as follows:
Table of attendance
Meetings held
Meetings Attended:
Ted O’Neill
Kieran Mahon
Aidan Hughes
Torgeir Mantor
Willie McCarter
Seán Savage
Board
Remuneration Audit
5
5
5
5
5
5
5
1
1
N/A
N/A
N/A
1
1
N/A
N/A
N/A
1
1
N/A
N/A
One nomination meeting was held during the year.
Directors’ Remuneration
The remuneration of Directors and senior management is determined by the Remuneration Committee
consisting of 2 of the non-executive Directors whose names are listed on page 10. The Remuneration
Committee is chaired by Mr Willie McCarter. This committee also recommends the granting of share
options to Executive Directors and senior management. In considering and agreeing salaries and benefits
as well as performance related incentives the Committee aims to ensure that remuneration packages are
competitive and that individuals are fairly rewarded relative to their responsibilities, experience and value
to the Group. The committee takes advice where appropriate from external professional advisors in
assessing salary levels and determining its remuneration policy and practice.
Norish plc’s remuneration policies and procedures meet with the Best Practice Provisions of the Irish
Stock Exchange’s requirements on Directors’ remuneration. In particular the Company has applied all of
the relevant principles set out in UK Corporate Governance Code (2014). In designing schemes of
performance-related remuneration, the Remuneration Committee has given full consideration to the
provisions in UK Corporate Governance Code (2014).
Details of the interests of Directors and Secretary in shares and options are set out earlier in this Report
and details of Directors’ remuneration are given in Note 26 to the financial statements.
Relations with Shareholders
Recognising the importance of communications with shareholders the Board seeks to provide through its
Annual Report a clear and balanced assessment of Group performance and prospects. The Group’s
Internet website, www.norish.com, provides investors with the full text of the Annual and Interim Reports.
The Chairman and Directors maintain an ongoing dialogue with the Company’s institutional shareholders
on strategic issues. All shareholders are encouraged to attend the Annual General Meeting.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 19
DIRECTORS’ REPORT (CONTINUED)
Internal control
The Board is ultimately responsible for the Group’s system of internal control and for reviewing its
effectiveness. The system is designed to manage rather than eliminate the risk of failure to achieve
business objectives, and can only provide reasonable and not absolute assurance against material
misstatement or loss.
The Board confirms that an ongoing process for identifying, evaluating and managing the significant risks
faced by the Group has been put in place for the year under review and up to the date of approval of the
annual report and accounts, and that this process is regularly reviewed by the board and accords with the
2014 UK Corporate Governance Code.
The Board has reviewed the effectiveness of the system of internal control. In particular it has reviewed
the process for identifying and evaluating the significant risks affecting the business and the policies and
procedures by which these risks are managed.
The Group’s overall internal control system includes:
n an organisation structure with clearly defined lines of authority and accountability;
n appropriate terms of reference for Board committees with clearly stated responsibilities;
n a budgeting and monthly financial reporting system for all Group business units, which enables close
monitoring of performance against plan and facilitates remedial action where necessary; and
n comprehensive policies and procedures in relation to financial controls, capital expenditure,
operational risk and treasury and credit risk management.
The Group’s system of internal financial controls is established to provide reasonable assurance of:
n
the maintenance of proper accounting records and the reliability of financial information;
n
the safeguarding of assets against unauthorised use or disposal; and
n
the prevention or early detection of material errors or irregularities.
The Group’s internal controls, including financial controls, are reviewed systematically by the Audit
Committee. In these reviews the emphasis is placed on areas of significant risk. The Finance Director is
responsible for carrying out detailed risk assessments in all business units and for reporting to divisional
and ultimately senior management on the effectiveness of the internal control system.
Annual report and accounts
The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group’s
performance, business model and strategy.
20 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 21
DIRECTORS’ REPORT (CONTINUED)
Audit Committee and Auditors
The Audit Committee is chaired by Willie McCarter. The other member is Torgeir Mantor. Its written
terms of reference deal clearly with its authority and duties. The committee meets to review the Group’s
annual financial statements before their submission to the Board, to review the appropriateness and
effectiveness of the Group’s internal controls, accounting policies and procedures and financial reporting,
to assess the effectiveness of the external audit and the Group Internal Audit function and to report back
to the Board how it has discharged its responsibilities.
The Group’s policy regarding external auditor independence and the provision of non-audit services by
the external auditors is that, where appropriate, non-audit related work is put out to competitive tender.
Details of the year’s fees payable to the external auditors are given in Note 8 to the financial statements.
The Directors and senior management, the Group’s external auditors and internal audit, as appropriate,
attend meetings of the committee.
Nomination committee
The Nomination Committee comprises the Executive Chairman, the Managing Director and Sean Savage.
The Nomination Committee met once during the year. The purpose of the Nomination Committee is to
ensure a rigorous process is adhered to in relation to both the selection and appointment of new directors
having considered the capabilities required for any given role based on an evaluation of the balance of
skills, knowledge and experience required by the Board. The Nomination Committee also considers the
structure, size and composition of the Board and satisfies itself with regards to succession planning.
Compliance statement
Norish has complied during the year to 31 December 2016 with all provisions of the Principles of Good
Governance and Code of Best Practice as contained in the 2014 UK Corporate Governance Code except
for the following matters:
• The Board’s Nomination Committee consists of all members of the Board. This decision was taken
because of the small size of the board.
• Due to the small size of the Board, performance evaluation of the Board, its Committees and Directors
has not been conducted.
• Most of the directors have a direct interest in the share capital of Norish plc as detailed on page 14.
Willie McCarter is the only director who does not have any beneficial interest in the share capital.
Each of the persons who are directors at the time when this Directors’ report is approved acknowledged
that they are responsible for securing the group’s compliance with its relevant obligations.
22 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
DIRECTORS’ REPORT (CONTINUED)
To ensure that the group has achieved material compliance with its relevant obligations, the directors
confirm that they have:
• drawn up a compliance policy statement setting out the group’s policies respecting compliance by
the group with its relevant obligations.
• put in place appropriate arrangements and structures that are designed to secure material
compliance with the group’s relevant obligations.
•
conducted a review, during the financial year, of the arrangements and structures, referred to
above.
Relevant Audit Information
Each of the persons who are directors at the time when this Directors’ report is approved has confirmed
that:
•
•
so far as that director is aware, there is no relevant audit information of which the company’s
auditors are unaware; and
that director has taken all the steps that ought to have been taken as a director in order to be aware
of any relevant audit information and to establish that the company’s auditors are aware of that
information.
Going concern
The Directors, having made appropriate enquiries, have a reasonable expectation that the Group as a
whole has adequate resources to continue in operation for the foreseeable future.
The Group borrowings are underpinned by a portfolio of freehold and long leasehold properties and at the
financial year end there were agreed, but undrawn facilities of £1.3m along with cash reserves of £2m.
The Group also has the ability to raise equity funds through the London Stock Exchange (AIM) market.
Taking into account all of the above, the directors consider it appropriate to adopt the going concern basis
in preparing the financial statements.
Future developments
The Group is committed to developing the Commodity trading business together with improving the
profitability of the Temperature controlled business.
The Group has embarked on a new dairy farming project in 2016.
Accounting records
The measures taken by the directors to ensure compliance with the requirements of Sections 281 to 285 of
the Companies Act 2014 with regard to the keeping of accounting records, are the employment of
appropriately qualified accounting personnel and the maintenance of computerised accounting systems.
The company's accounting records are maintained at the company's registered office at 6th Floor, South
Bank House, Barrow Street, Dublin 4.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 23
DIRECTORS’ REPORT (CONTINUED)
Auditor
In accordance with Section 383(2) of the Companies Act 2014 the Chartered Accountants and Statutory
Audit Firm, Grant Thornton, will continue in office.
On behalf of the board:
T.J. O’Neill
Chairman
A.V..Hughes
Finance Director
22 March 2017
24 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT
OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
The directors are responsible for preparing the Directors' report and the financial statements in accordance
with applicable Irish law and regulations.
Irish company law requires the directors to prepare group and parent company financial statements for
each financial year. Under that law the directors have elected to prepare the group financial statements in
accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.
Under Company law the directors must not approve the financial statements unless satisfied that they give
a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group
and Company for that period.
In preparing these financial statements, the directors are required to:
•
select suitable accounting policies for the company financial statements and then apply them
consistently;
• make judgments and estimates that are reasonable and prudent;
•
state whether the financial statements have been prepared in accordance with applicable
accounting standards, identify those standards, and note the effect and the reasons for any material
departure from those standards; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the group will continue in business.
The directors are responsible for ensuring that the company keeps or causes to be kept adequate
accounting records which correctly explain and record the transactions of the company, enable at any time
the assets, liabilities, financial position and profit or loss of the company to be determined with reasonable
accuracy, enable them to ensure that the financial statements and directors' report comply with the
Companies Act 2014 and enable the financial statements to be audited. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the group's website. Legislation in Ireland governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
T.J. O’Neill
Chairman
A. Hughes
Finance Director
22 March 2017
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 25
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS
OF NORISH PLC
We have audited the financial statements of Norish plc for the year ended 31 December 2016 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Statements
of Financial Position, the Consolidated Cash Flow Statement, the Consolidated and Parent Statements of
Changes in Equity and the related notes. The financial reporting framework that has been applied in their
preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union and, as regards the parent company financial statements, as applied in accordance with
the provisions of the Companies Act 2014.
This report is made solely to the company's members, as a body, in accordance with Section 391 of the
Companies Act, 2014. Our audit work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company's members as a body, for our audit work, for this report, or for the opinions we
have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view and
otherwise comply with the Companies Act 2014. Our responsibility is to audit and express an opinion on
the financial statements in accordance with Irish law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for
Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or error. This includes an assessment of: whether the accounting policies are
appropriate to the group and company’s circumstances and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall
presentation of the financial statements. In addition, we read all the financial and non-financial
information in the Annual report to identify material inconsistencies with the audited financial statements
and to identify any information that is apparently materially incorrect based on, or materially inconsistent
with, the knowledge acquired by us in the course of performing the audit. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications for our report.
26 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS
OF NORISH PLC (CONTINUED)
OPINION ON FINANCIAL STATEMENTS
In our opinion:
•
•
the group financial statements give a true and fair view in accordance with IFRSs as adopted by
the European Union, of the state of the assets, liabilities and financial position of the group as at
31 December 2016 and of its profit for the year then ended;
the parent company statement of financial position gives a true and fair view, in accordance with
IFRSs as adopted by the European Union as applied in accordance with the provisions of the
Companies Act 2014, of the state of the parent company’s assets, liabilities and financial position
at 31 December 2016; and
•
the financial statements have been properly prepared in accordance with the requirements of the
Companies Act 2014.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY THE COMPANIES ACT 2014
• We have obtained all the information and explanations which we consider necessary for the
purposes of our audit.
•
In our opinion the accounting records of the company were sufficient to permit the parent
company financial statements to be readily and properly audited.
• The parent company statement of financial position is in agreement with the accounting records.
•
In our opinion the information given in the directors’ report is consistent with the financial
statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to
report to you if, in our opinion the disclosures of directors’ remuneration and transactions specified by law
are not made.
STEPHEN MURRAY
For and on behalf of
Grant Thornton
Chartered Accountants
Statutory Audit Firm
22 March 2017
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 27
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2016
Notes
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Operating profit from continuing operations
Finance income – fair value gain on swaps
Finance income – interest receivable
Finance expenses – interest paid
Finance expenses – notional interest
Profit on continuing activities before taxation
Income taxes – Corporation tax
Income taxes – Deferred tax
Profit for the financial year from continuing
operations
5
7
7
7
7
8
9
9
2016
£’000
2015
£’000
32,098
(30,757)
25,145
(23,859)
1,341
1,286
238
(707)
872
20
10
(240)
(29)
633
(210)
18
-
(447)
839
26
-
(272)
(33)
560
(60)
12
441
512
Loss from discontinued operations
30
(161)
(223)
Profit for the financial year
Other comprehensive income
Total comprehensive income for the year
Profit for the financial year attributable to owners of
the parent
Loss for the financial year attributable to non-
controlling interest
Total comprehensive income for the financial year
attributable to owners of the parent
Total comprehensive expense for the financial year
attributable to non-controlling interest
280
-
280
291
(11)
291
(11)
289
-
289
291
(2)
291
(2)
28 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2016
Notes
2016
2015
Earnings per share expressed in pence per share:
From continuing operations
- basic
- diluted
From discontinued operations
- basic
- diluted
10
10
1.5p
1.5p
2.8p
2.8p
(0.6)p
(0.6)p
(1.2)p
(1.2)p
The notes on page 31 to 76 are an integral part of these consolidated financial statements.
Approved on behalf of the board on 22 March 2017 by:
T.J. O’Neill
Chairman
A. Hughes
Finance Director
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2016
Non current assets
Goodwill
Intangible assets
Property, plant and equipment
Biological assets
Current assets
Trade and other receivables
Inventories
Cash and cash equivalents
Assets of disposal group classified as held for sale
TOTAL ASSETS
Equity attributable to equity holders of the patent and non-
controlling interest
Share capital
Share premium account
Capital conversion reserve fund
Treasury shares
Retained earnings
Equity attributable to equity holders of the parent
Non controlling Interest
TOTAL EQUITY
Non-current liabilities
Borrowings
Financial liabilities at fair value through profit or loss
Deferred tax
Current liabilities
Trade and other payables
Financial liabilities at fair value through profit or loss
Current tax liabilities
Borrowings
Liabilities of disposal group classified as held for sale
Notes
11
11
12
13
14
15
23
30
21
21
22
19
16
20
17
16
18
19
30
2016
£’000
2015
£’000
2,338
65
16,635
540
19,578
6,264
483
2,044
698
9,489
2,338
-
15,885
-
18,223
4,815
386
4,383
1,017
10,601
29,067
28,824
5,616
7,281
23
(563)
2,926
15,283
(22)
15,261
3,006
44
925
3,975
5,082
255
205
4,282
7
9,831
5,344
6,990
23
-
2,981
15,338
(11)
15,327
4,123
199
942
5,264
4,198
311
44
3,473
207
8,233
TOTAL EQUITY AND LIABILITIES
29,067
28,824
The notes on page 31 to 76 are an integral part of these consolidated financial statements.
Approved on behalf of the board on 22 March 2017 by:
T.J. O’Neill
Chairman
30 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
A. Hughes
Finance Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 December 2016
Capital
Non-
Share
Share Conversion Treasury Retained
Controlling
Total
capital premium
Reserve
shares earnings
£'000
£'000
£'000
£’000
£'000
Total
£'000
interest Equity
£'000
£'000
At 1 January 2015
3,280
4,198
23
Net profit/(loss) for the financial
year
Total comprehensive income for
the financial year
-
-
Issue of share capital
2,064
-
-
2,064
5,344
-
-
Share issue costs
Equity dividends paid (recognised
directly in equity)
Transactions with owners
At 31 December 2015
Net profit/(loss) for the financial
year
Total comprehensive income for
the financial year
Issue of share capital
Equity dividends paid (recognised
directly in equity)
Treasury shares acquired
-
-
3,078
(286)
-
2,792
6,990
-
-
272
291
-
-
-
-
Transactions with owners
272
291
-
-
-
-
-
-
23
-
-
-
-
-
-
-
-
-
-
-
-
-
2,878 10,379
(9) 10,370
291
291
291
-
-
(188)
(188)
291
5,142
(286)
(188)
4,668
(2)
(2)
-
-
-
-
289
289
5,142
(286)
(188)
4,668
2,981 15,338
(11) 15,327
291
291
(11)
280
291
-
(346)
-
(55)
291
563
(346)
(563)
(55)
(11)
-
-
-
(11)
280
563
(346)
(563)
(66)
(563)
(563)
At 31 December 2016
5,616
7,281
23
(563)
2,926 15,283
(22) 15,261
The notes on page 31 to 76 are an integral part of these consolidated financial statements.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 31
CONSOLIDATED CASH FLOW STATEMENT
for the financial year ended 31 December 2016
Notes
Profit on continuing activities before taxation
Gain on biological assets
Loss on discontinued activities
Finance expenses
Finance income
Depreciation – property, plant and equipment-net
Changes in working capital and provisions:
Increase in inventories
Increase in trade and other receivables
Decrease in current liabilities held for sale
Increase in payables
Cash generated from operations
Interest paid
Interest received
Taxation paid
Net cash generated/(used in) from operating activities
Investing activities
Investment in Intangible assets
Purchase of property, plant and equipment
Purchase of biological assets
Net cash used in investing activities
24
Financing activities
Dividends paid to shareholders
Deferred consideration payments
Share issue proceeds
Share issue costs
Invoice finance receipts
Overdraft receipt
Finance lease capital repayments
Finance lease advance
Term loan repayments
Net cash (outflow)/inflow from financing activities
2016
£’000
633
(238)
(161)
269
(30)
625
1,098
2015
£’000
560
-
(223)
305
(26)
615
1,231
(97)
(1,130)
(200)
885
556
(334)
(1,320)
(418)
1,029
188
(240)
10
(49)
277
(65)
(1,375)
(302)
(1,742)
(346)
(220)
-
-
440
304
(147)
218
(1,123)
(874)
(272)
-
(95)
(179)
-
(502)
-
(502)
(188)
(185)
5,142
(286)
1,141
-
(124)
-
(821)
4,679
Net (decrease)/increase in cash and cash equivalents
(2,339)
3,998
Cash and cash equivalents and bank overdrafts,
Beginning of period
4,383
385
Cash and cash equivalents end of period
23
2,044
4,383
The notes on page 31 to 76 are an integral part of these consolidated financial statements.
32 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
General information
1
Norish plc is a provider of temperature controlled, ambient storage, supplies of commodity to
major food manufacturing and wholesale companies and other related services to the food
industry in the United Kingdom.
The Group is listed on the Alternative Investments Market (“AIM”), and is incorporated and
domiciled in the Republic of Ireland. The address of its registered office is Norish plc, 6th Floor,
South Bank House, Barrow Street, Dublin 4, Republic of Ireland.
Summary of significant accounting policies
2
The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements of Norish plc have been prepared in accordance with
International Financial Reporting Standards (IFRS), as adopted by the European Union,
applicable Irish law and the AIM rules.
The financial statements have been prepared under the historical cost convention as modified by
the revaluation of financial assets and financial liabilities (including derivative instruments) at
fair value through profit or loss.
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies.
The financial statements are presented in Pounds Sterling which is both the Group’s functional
and presentational currency, rounded to the nearest thousand pounds.
Going concern
The Directors, having made appropriate enquiries, have a reasonable expectation that the Group
as a whole has adequate resources to continue in operation for the foreseeable future.
The group borrowings are underpinned by a portfolio of freehold and long leasehold properties
and at the year end there were agreed, but undrawn facilities of £1.3m along with cash reserves
of £2m. The group also has the ability to raise equity funds through the London Stock Exchange
(AIM) market.
Taking into account all of the above the directors consider it appropriate to adopt the going
concern basis in preparing the financial statements.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 33
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Changes in accounting policies
The Group has adopted the following new standards, interpretations, revision and amendments to
IFRS issued by the IASB, which are relevant to and effective for the Group’s financial
statements for the annual period beginning 1 January 2016:
Annual Improvements to IFRSs 2012–2014 Cycle – various standards & Annual
Improvements to IFRSs 2011–2013 Cycle – various standards
These are a collective of amendments to IFRSs resulting from issues discussed and subsequently
included in Exposure Drafts which are effective for the Group as at 31 December 2016.
Management have assessed the impact of each of the amendments and concluded that there is no
impact of the Group’s accounting policies as a result.
Amendment to IAS 1: Disclosure Initiative
The amendments aim at clarifying IAS 1 to address perceived impediments to preparers
exercising their judgment in presenting their annual reports. Management have assessed the
impact of this amendment and applied its principles in preparing this annual report.
Amendment to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and
Amortisation
The amendment introduced a rebuttable assumption that revenue is not an appropriate
amortisation method for intangible assets. Furthermore, it prohibits the use of revenue-based
depreciation for property, plant and equipment. The Group does not base rates of depreciation or
amortisation rates on revenue. Accordingly, the impact of this amendment on the Group is
limited.
Certain standards and interpretations that have been issued and are effective from 1 January 2016
but Management do not consider that they have a material impact on the Group’s consolidated
financial statements. These standards and interpretations are:
IFRS 14 Regulatory Deferral Accounts
•
• Amendments to IFRS 11 Accounting for acquisitions in Joint Operations
• Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants
• Equity method in separate financial statements (amendments to IAS 27)
•
Investment entities: Applying the consolidation exception (amendments to IFRS
10, IFRS 12 and IAS 28)
Standards, amendments and interpretations to existing standards that are not yet effective
and have not been adopted early by the Group
At the date of authorisation of these financial statements, certain new standards, amendments and
interpretations to existing standards have been published by the IASB but are not yet effective,
and have not been adopted early by the Group.
Management anticipates that all of the pronouncements will be adopted in the Group’s
accounting policies for the first period beginning after the effective date of the pronouncement.
34 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Information on new standards, amendments and interpretations that are expected to be relevant to
the Group’s consolidated financial statements is provided below.
IFRS 9 Financial Instruments (effective from 1 January 2018)
The IASB have completed its project to replace IAS 39 with IFRS 9 which includes requirements
for the classification and measurement of financial assets and liabilities, impairment
methodology and general hedge accounting. The Group’s main area of focus in assessing the
impact of IFRS 9 will be the classification of the Group’s financial assets and the implementation
of the expected credit loss model for recognising impairment losses in respect of the Group’s
financial assets such as trade receivables. While the Board have started to assess the impact of
IFRS 9 it is not yet in a position to provide quantitative information in this regard.
IFRS 15 Revenue from Contracts with Customers (effective from 1 January 2018)
IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue
from customers. It will supersede a numbers of standards and interpretations including IAS 18,
IAS 11 as well as IFRC 13, IFRC 15, IFRIC 18 and SIC 31.
Amendments to IAS 7 Cash Flow Statement (effective from 1 January 2017)
The amendments will require entities to provide disclosures that enable investors to evaluate
changes in liabilities arising from financing activities, including changes arising from cash flows
and non-cash changes.
The new standard brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 supersedes IAS 17 'Leases' and related interpretations and is effective for periods beginning on or after 1 January 2019, with earlier adoption permitted if IFRS 15 'Revenue from Contracts with Customers' has also been applied (subject to EU endorsement).
IFRS 16 Leases (effective for periods beginning on or after 1 January 2019 subject to EU
endorsement)
The new standard brings most leases on-balance sheet for lessees under a single model,
eliminating the distinction between operating and finance leases. Lessor accounting however
remains largely unchanged and the distinction between operating and finance leases is retained.
IFRS 16 supersedes IAS 17 'Leases' and related interpretations. The Group has a number of
operating lease arrangements and will consider the financial impact of IFRS 16 in due course.
Amendments to IFRS 2 Share Based Payment
The amendments address the following areas: the effect of vesting conditions on the
measurement of both cash and share based payments; the classification of a share-based payment
transactions with net settlement features for withholding tax obligations; and the accounting
where a modification to the terms and conditions of a share-based payment transaction changes
its classification from cash-settled to equity settled.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 35
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Basis of consolidation
The Group’s Consolidated Financial Statements include the results of Norish plc and its
subsidiary undertakings for that period.
Subsidiaries are all entities over which the Group has the power to govern the financial and
operating policies generally accompanying a shareholding of more than 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 using the equity method from the date on which control is transferred to the Group.
They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated but considered an impairment
indicator of the asset transferred.
The accounting policies of the subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group. Where necessary, consolidation adjustments
have been made to ensure that the Group accounts apply consistent accounting policies.
Business combinations and goodwill
The purchase method of accounting is used to account for the acquisition of subsidiaries by the
Group.
Goodwill represents the excess of the fair value of the purchase consideration for the subsidiary
undertakings over the fair value of the identifiable assets, including any intangible assets
identified, and liabilities of a subsidiary at the date of acquisition. Contingent consideration is
recognised at its fair value at the acquisition date. It is both classified and subsequently measured
in accordance with the Group’s accounting policy for financial instruments. Transactions costs
that are directly attributable to the business combination are expensed as incurred and included
within administrative expenses.
36 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Goodwill arising on acquisitions is capitalised and subject to impairment review at least
annually, but also when there are indications that the carrying value may not be recoverable.
Any impairment is recognised immediately in the Consolidated Statement of Comprehensive
Income and is not subsequently reversed.
Prior to 1 January 1997, goodwill was written off to reserves in the year of acquisition. Goodwill
after this date until the adoption of IFRS on 1 January 2006 was capitalised and amortised over
its useful economic life, which was presumed to be 20 years. The Group has elected not to apply
IFRS 3 “Business combinations” (as updated by IFRS 3(R)) retrospectively to business
combinations that took place before 1 January 2006 and, as a result, all goodwill arising from
prior business combinations has been frozen at this date. Any goodwill remaining on the
consolidated statement of financial position at transition is no longer being amortised but is
subject to impairment review.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any
impairment in value. Historical cost includes all expenditure that is directly attributable to the
acquisition of the assets. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when the costs provide enhancement, it is
probable that future economic benefits associated from the item will flow to the Group and the
cost of the enhancement can be measured reliably. The asset’s residual values and useful lives are
reviewed, and adjusted if appropriate, at the end of each reporting period. Assets carrying amount
is written down immediately to its recoverable amount if the assets carrying amount is greater
than the estimated recoverable amount. All other repair and maintenance costs are charged to
profit or loss during the financial period in which they are incurred.
With the exception of freehold land, depreciation is provided to write off the cost less the
estimated residual value of property, plant and equipment by equal annual instalments over their
estimated useful economic lives (or lease terms if shorter) which are as follows:
Freehold buildings
Leasehold buildings
Plant and equipment
Freehold land is not depreciated.
50 to 55 years
35 years
3 to 10 years
Impairment charges
An impairment loss is recognised for the amount by which the asset's or cash-generating unit's
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell, and value in use based on an internal discounted cash
flow evaluation. Impairment losses recognised for cash-generating units, to which goodwill has been
allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is
charged pro rata to the other assets in the cash generating unit. With the exception of goodwill, all
assets are subsequently reassessed for indications that an impairment loss previously recognised may
no longer exist.
Impairment reviews of goodwill are carried out annually and any impairment recognised is recorded in
the Consolidated Statement of Comprehensive Income.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 37
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Revenue recognition
Revenue, which arises principally from storage and handling income and the sale of goods,
represents net sales to customers outside the Group, and excludes Value Added Tax. Income
from sub-letting of warehouses is also included in revenue.
Handling revenue when invoiced relates to the receipt and eventual delivery of goods. The
portion that relates to the delivery is recognised when the goods are delivered out of store.
Revenue in respect of the storage is invoiced in advance and is recognised over the period that
the storage is provided. Revenue from the sale of goods in the commodity trading business is
recognised on an invoice basis which coincides with dispatch of goods and is the point when the
Group earns its right to consideration.
Revenue from all other activities is recognised in the periods in which the services are provided.
Financial assets/liabilities and available for sale assets
The Group classifies its financial assets/liabilities in the following categories: at fair value
through profit or loss, loans and receivables, or available for sale. The classification depends on
the purpose for which the financial assets/liabilities were acquired. Management determines the
classification of its financial assets/liabilities at initial recognition.
An assessment of whether a financial asset is impaired is made at least at each reporting date.
Receivables are non derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Receivables are considered for impairment on a case for case basis
when they are past due at the Consolidated Statement of Financial Position date or when
objective evidence is received that a specific counterparty will default.
a) Financial assets/liabilities at fair value through profit or loss
The financial assets/liabilities relate to derivatives. The Group utilises interest rate swaps
to hedge against its interest rate exposure. The interest rate swaps are initially recorded at
fair value and the fair value is re-measured at each consolidated statement of financial
position date. Fair value is obtained from external market valuations on the basis that
there is an active market for the the interest rate swaps and caps. Gains and losses arising
from changes in fair value are recognised in the profit or loss in the period in which they
arise. All recognised gains or losses resulting from the settlement of the interest rate
swap contract are recorded within finance expenses in the profit or loss. All recognised
gains or losses resulting from the option to purchase refrigerant gas are recorded in Other
Income in profit or loss. Contingent consideration has been classified as a financial
liability at fair value through profit or loss. All gains and losses resulting from changes in
the fair value of contingent consideration are recognised in Other Income in profit or loss.
The Group does not use hedging.
b) Loans and receivables
These are non derivative financial assets with fixed or determinable payments that are not
quoted on an active market. They are included in current assets, except for maturities
greater than 12 months after the Consolidated Statement of Financial Position date, which
are classified as non-current assets. Loans and receivables are carried at amortised cost.
38 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Purchases and sales of financial assets are recognised on the trade date (the date at which the
Group commits to purchase or sell the asset). Financial assets are derecognised when the rights
to receive the cash flows have expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership. Any impairment recognised are recorded in
the Consolidated Statement of Comprehensive Income.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently re-measured at amortised
cost, less provision for impairment. Trade receivables are first assessed individually for
impairment, or collectively where the receivables are not individually significant. Where there is
no objective evidence of impairment for an individual receivable, it is included in a group of
receivables with similar credit risk characteristics and these are collectively assessed for
impairment. Movements in the provision for impairment of trade receivables are recorded in the
profit or loss.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred
tax is generally provided on the difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill,
nor on the initial recognition of an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on temporary differences associated
with shares in subsidiaries is not provided if reversal of these temporary differences can be
controlled by the group and it is probable that reversal will not occur in the foreseeable future. In
addition, tax losses available to be carried forward as well as other income tax credits to the Group
are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised
to the extent that it is probable that the underlying deductible temporary differences will be able to
be offset against future taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of realisation, provided they are
enacted or substantively enacted at the Statement of Financial Position date.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 39
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Group have applied the dual recovery method of deferred tax, where deemed appropriate, with
regard to properties which are expected to be disposed of in the near future. This allows the Group
to calculate the basis of recovery of the depreciable amount through use, followed by the recovery
of the residual value through disposal.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the
profit or loss, except where they relate to items that are charged or credited directly to other
comprehensive income in which case the related deferred tax is also charged or credited directly to
other comprehensive income.
Foreign currencies
Transactions in foreign currencies by individual entities are recorded using the rate of exchange
ruling at the date of the transaction. The gains or losses on translation are included in the profit and
loss. Monetary assets and liabilities denominated in foreign currencies are translated using the
rate of exchange ruling at the Statement of Financial Position date and the gains or losses on
translation are included in other comprehensive income.
Non-monetary items measured at historical cost are translated using the exchange rates at the
date of the transaction (not retranslated). Non-monetary items measured at fair value are
translated using the exchange rates at the date when fair value was determined. The gains or
losses on translation are included in the other comprehensive income.
Leased assets
Leases are classified as finance leases whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee. All other leases are classified as operating
leases.
Expenditure on operating leases is charged to the profit or loss on a basis representative of the
benefit derived from the asset, normally on a straight-line basis over the lease period. Benefits
received as an incentive to enter into an operating lease are also spread on a straight-line basis
over the lease term.
Assets held under finance leases are capitalised and included in property, plant and equipment at
fair value. Leases of land and buildings are classified separately and are split into a land and
building element in accordance with the relative fair values of the leasehold interest at the date
the asset is recognised initially. Depreciation is calculated using expected useful lives on the
same basis as owned assets or, where shorter, over the term of the relevant lease. The capital
elements of obligations under finance leases are recorded as liabilities. The interest element is
charged to the profit or loss over the lease term to give a constant periodic rate of interest on the
outstanding liability.
40 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Pension costs
The costs of providing defined contribution pensions are charged to administrative expenses as
they fall due. The scheme funds are administered by trustees and are independent of the Group’s
finances. Differences between the amounts charged to the profit or loss and payments made to
the pension scheme are treated as prepayments or accruals, as necessary.
Dividends
Distributions to equity holders are not recognised in the profit or loss, but are disclosed as a
component of the movement in shareholders’ equity. Dividends unpaid at the consolidated
statement of financial position date are only recognised as a liability at that date to the extent that
they are appropriately authorised and no longer at the discretion of the Company. Unpaid
dividends that do not meet these criteria are disclosed in the notes to the financial statements.
Dividends are paid in Euros. Under the Twin Share Scheme Shareholders can opt to receive their
dividends in Sterling if they make the appropriate election in time to the company register. The
Euro amount is converted to Sterling at the official exchange rate 14 days before the payment
date.
Net cash and cash equivalents
Net cash and cash equivalents in the Consolidated Statement of Financial Position and
Consolidated Cash Flow Statement comprise of cash at bank and in hand and short-term deposits
with an original maturity of less than three months.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost includes all expenditure
incurred in the normal course of business in bringing the products to their present location and
condition.
Share based payments
The Group issues equity-settled share-based payments to certain employees. In accordance with
IFRS 2, “Share-based payments”, equity-settled share-based payments are measured at fair value
at the date of grant. Fair value is measured by use of the Black-Scholes pricing model. The fair
value determined at the grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of the number of shares
that will eventually vest.
The Group has applied the exemption available, and has applied the provisions of IFRS 2 only to
those options granted after 7 November 2002 and which were outstanding at 1 January 2006 and
all options issued since that date.
The share-based payments charge is allocated to administrative expenses on the basis of
headcount.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 41
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Employer’s taxes on share options
Employer’s National Insurance in the UK and equivalent taxes in other jurisdictions are payable
on the exercise of certain share options. In accordance with IFRS 2, this is treated as a cash-
settled transaction. A provision is made, calculated using the fair value of the Group’s shares at
the Consolidated Statement of Financial Position date, pro-rated over the vesting period of the
options.
Equity
Share capital represents the nominal value of shares that have been issued. Share Premium includes
any premiums received on issue of share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax benefits.
Treasury shares represent shares of the Company held by the Group. Treasury shares are
recognised in equity in accordance with IAS 32 Financial Instruments: Presentation and
subsequently carried at cost less impairment charges.
Retained earnings include all current and prior period retained profits.
All transactions with owners of the parent are recorded separately with equity.
Joint share ownership plan (JSOP)
The JSOP is a trust based arrangement established to hold shares in the Company that may vest,
dependent on certain vesting conditions, to employees of the Group. The JSOP was established for
the benefit of the Group through the remuneration of key employees. Furthermore, the Group funds
the JSOP and is exposed to both upside and downside risk associated with holding the shares.
Accordingly, Management consider that the Group exercises control over the JSOP which has been
included in these consolidated financial statements.
Biological assets
Biological assets are measured on initial recognition and at each subsequent balance sheet date at fair
value less estimated point of sale costs. Agricultural produce which is harvested from biological
assets is measured at it fair value less estimated point of sale costs at the point of harvest.
Intangible assets
The Company recognises internally generated intangible assets to the extent that they are both
identifiable and can be measured reliably. Recognition only occurs when the Company is
satisfied that the project is feasible such that the asset will be available for use or sale; that the
Company has the intention to complete the intangible asset and either use or sell it; that the
Company has the ability to either use or sell the intangible asset; that it is probable that the
intangible asset will generate future economic benefits; and that the Company has available
sufficient resources to complete the development of the intangible asset.
42 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3
Financial risk management
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency
risk, fair value interest rate risk and cash flow interest rate risk), credit risk, contingent
consideration and liquidity risk. The Group’s overall risk management programme seeks to
minimise potential adverse effects on the Group’s financial performance. The Group uses
certain derivative instruments to minimise certain risk exposures.
a) Market risk
i) Foreign exchange risk
The Group has exposure to foreign exchange risk in respect of its commodity trading
division. It manages this risk by mainly purchasing euros at a fixed rate forward and
using this rate in establishing a selling price for its goods in order to maintain an
acceptable margin.
ii) Fair value and cashflow interest rate risk
As the Group has no significant interest bearing assets, the Group’s income and operating
cash flows are substantially independent of changes to market interest rates.
The Group’s interest rate risk arises from long term borrowings. Borrowings issued at
variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed
rates expose the Group to fair value interest rate risk. During 2016 and 2015, the Group’s
borrowings at variable rate were denominated in Pounds Sterling.
The Group manages its cash flow interest rate risk by using interest rate swaps and caps.
Such interest rate swaps have the economic effect of converting borrowings from floating
rates to fixed rates. Under the interest rate swap, the Group agrees with HSBC Bank plc
to exchange, at quarterly intervals, the difference between fixed contract rates and
floating-rate interest amounts by reference to the agreed notional amounts.
At 31 December 2016, if interest rates had been 1% higher with all other variables held
constant, post tax profit for the year would have been £39,000 lower, mainly as a result of
higher interest expenses on floating rate borrowings.
At 31 December 2015, if interest rates had been 1% higher with all other variables held
constant, post tax profit for the year would have been £18,000 lower, mainly as a result of
higher interest expenses on floating rate borrowings.
iii) Contingent consideration market risk
The Group recognised contingent consideration of £1,588,000 in connection with the
acquisition of Townview Foods Limited (see note 29). Following a re-assessment of the
performance of the acquired business this was reduced to £754,000 at 31 December 2013.
Based on the performance of Townview Foods Limited during 2014 and expected
performance over the next three years, the directors considered that there had not been a
significant change in the value of the liability at 31 December 2014. Following further re-
assessment, the Board concluded that there has not been a significant change in the value
of the liability at 31 December 2016.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 43
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The directors have valued the contingent consideration using a probability weighted
discounted cash flow model. The most significant assumption is the quantum of earnings
before interest and tax of Townview Foods Limited for the next 9 months. Should the
expected level of earnings before interest and tax of Townview Foods Limited be 5%
lower than that modelled, post tax profit for the year would be £15,000 higher (2015:
£16,000 higher).
b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash
equivalents, derivative financial instruments and deposits with banks, as well as credit
exposure to customers, including outstanding receivables and committed transactions.
The credit risk in relation to trade receivables is reduced because, in most cases, the
Group has physical custody of the customer’s inventory. While this does not legally
constitute collateral in respect of trade receivables, it does provide the Group with a
degree of leverage over customers with overdue receivables balances.
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and cash
equivalents, the availability of funding through an adequate amount of committed credit
facilities and the ability to close out market positions. The Group aims to maintain
flexibility in funding by keeping committed credit lines available.
The Group aims to ensure that a significant portion of its borrowings should mature in
more than one year.
The table below analyses the Group’s financial liabilities which will be settled on a net
basis into relevant maturity groupings based on the remaining period at the Consolidated
Statement of Financial Position to the contractual maturity period. The amounts
disclosed in the table below are the contractual undiscounted cash flows.
At 31 December 2016:
Within
1 year
£’000
Trade payables
Invoice finance
Finance Leases
Term loan Interest
SWAP Interest
Bank loans
Deferred consideration
3,581
3,254
183
84
15
845
244
1 to 2
years
£’000
-
-
196
72
-
744
44
2 to 5
years
£’000
-
-
181
74
-
1,718
-
Greater
than 5 years
£’000
-
-
-
6
-
167
-
Total
£’000
3,581
3,254
560
236
15
3,474
288
8,206
1,056
1,973
173
11,408
44 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
At 31 December 2015:
Within
1 year
£’000
Trade payables
Invoice finance
Finance Leases
Term loan Interest
SWAP Interest
Bank loans
Deferred consideration
2,927
2,511
135
113
60
827
168
1 to 2
years
£’000
-
-
300
105
15
833
258
2 to 5
years
£’000
-
-
54
209
-
2,522
53
Greater
than 5 years
£’000
-
-
-
34
-
414
-
Total
£’000
2,927
2,511
489
461
75
4,596
479
6,741
1,511
2,838
448
11,538
3.2 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, to return capital to shareholders, issue new shares or sell
assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio, calculated as net borrowings
(cash less total borrowings) divided by shareholders equity (excluding goodwill). The Group
has shareholders’ funds of £15.3m unchanged from last year. In 2016, we increased the
Gearing ratio from 25% to 41%.
The Group’s strategy is to reduce the net borrowings as soon as possible.
The gearing ratios at 31 December 2016 and 2015 were as follows:
Total borrowings
Less cash and cash equivalents
Net borrowings
Net assets
Less goodwill
Capital employed
Gearing ratio
2016
£’000
7,288
(2,044)
5,244
15,261
(2,338)
12,923
2015
£’000
7,595
(4,383)
3,212
15,327
(2,338)
12,989
41%
25%
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 45
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3.3 Fair value estimation
The fair value of interest rate swaps is calculated as the present value of the estimated future
cash flows.
The carrying value less impairment provision of trade receivables and payables are assumed
to approximate their fair values due to the short term nature of trade receivables and payables.
Assets measured at fair value as at 31 December 2016
Total
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Financial assets/liabilities at fair
Value through profit or loss
Interest rate swaps/caps
Contingent consideration
Total
10
289
299
-
-
-
10
-
10
-
289
289
Assets measured at fair value as at 31 December 2015
Total
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Financial assets/liabilities at fair
Value through profit or loss
Interest rate swaps/caps
Contingent consideration
Total
31
479
510
-
-
-
31
-
31
-
479
479
4
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectation of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates, will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of carrying a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are in relation to the impairment
review of goodwill.
The Group tests annually whether goodwill has suffered any impairment, in accordance with the
accounting policy set out in Note 2. Further details are set out in Note 11.
The Group recognises revenue in the period which the services are provided. An appropriate
proportion of handling revenue invoiced in advance is deferred until the inventory is despatched.
46 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4
Critical accounting estimates and judgements(continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their
estimated useful lives, using the straight-line method. The estimated useful lives range as
follows:
The estimated useful lives range as follows:
Freehold property
Plant and machinery 10 years
Fixtures and fittings 10 years
Equipment
5-20 years
50-55 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, or if there is an indication of a significant change since the last
reporting date.
The Group has made a critical judgement and applied the dual recovery method with regard to
deferred tax in respect of its property portfolio. This could materially impact on future results if
this fails to materialise. It is expected to sell one of its freehold properties within the next 3
years, which if this does not materialise then it will have an impact on the deferred tax
calculation in future years.
The Group recognised contingent consideration of £1,588,000 in the year 31 December 2012, in
connection with the acquisition of Townview Foods Limited (see note 29). This was re-evaluated
and resulted in a credit to the income statement of £737,000 during the year ended 31 December
2013. Further re-assessment by the Board concluded that the value of the liability had not changed
significantly at 31 December 2016. The directors have valued the contingent consideration using a
probability weighted discounted cash flow model. A key assumption used in the calculation was
an annual discount factor of 9.1%. The most significant assumption is the quantum of earnings
before interest and tax of Townview Foods Limited for 2017. Initially, the directors used the
acquisition model to determine the fair value as this provided the business case to support the
acquisition of Townview Foods Limited. Subsequently, budgets and forecasts have been prepared
as part of the Group’s financial planning activities which in turn have allowed the estimated
amount of contingent consideration that the Group will need to pay to be recalculated. Actual
performance to date was below that initially forecast resulting in a reduction in the liability. The
Board will continue to assess the performance of Townview Foods Limited, both in the light of
actual performance to date and expected future performance, which may require further
adjustments to contingent consideration.
The Group values its swaps arrangements with the bank using the Mark to market for the period
representing the unexpired period of the swaps. The basis of the formula for calculating a swaps
valuation is that current swap rate on the "bid" side against the Group swaps rate.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 47
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Segmental information
5
The three continuing operating segments during the year are disclosed below. During 2013 the
Group discontinued operations from the north segment and the FMCG market (see note 30). These
operating segments are monitored and strategic decisions are made on the basis of segment operating
results. The Group operates principally in the United Kingdom. Since the year ended 31 December
2014, the Group also had operations in the Republic of Ireland. These operations generated revenues
of £1m (2015: £1m) with no fixed assets. During 2016, the Group established a dairy farming
business in the Republic of Ireland. These operations generated nil revenues with fixed assets of
£1.4m.
Segment information can be analysed as follows for the reporting periods under review:
• Commodity trading business
• North west cold storage
• South east cold storage
• Dairy farming
During 2016, £4.12m or 12.8% (2015: £3.123m or 11.2%) of the Group’s revenues from
continued operations depended on a single customer in the commodity trading business. (2015 :
cold storage segment).
The segment results from continuing operations for the year ended 31 December 2016 are:
Dairy Commodity
Farming Trading
£’000
£’000
North
West
£’000
South
East Unallocated
£’000
£’000
Total
£’000
Total segment revenue -
19,504
6,642
5,952
Revenue - 19,504
6,642
5,952
-
-
32,098
32,098
Operating profit 8 546
Finance income –
fair value gain -
Finance income –
interest receivable -
Finance cost –
Interest paid -
Finance cost –
notional interest -
-
-
(34)
(29)
1,083
1,023
(1,788)
872
-
-
-
-
-
-
-
-
20
10
20
10
(206)
(240)
-
(29)
Profit before income tax 8
483
1,083
1,023
(1,964)
633
Income tax – corporation tax (1)
Income tax – deferred tax -
(95)
-
-
-
-
-
(114)
18
(210)
18
Profit for the year 7
388
48 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
(2,060)
1,023
1,083
441
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Other segment items:
£’000
£’000
Dairy Commodity
Farming Trading
North
West
£’000
South
East Unallocated
£’000
£’000
Total
£’000
Depreciation -
-
– continuing operations
(Note 12)
350
228
47
625
The segment results for the year ended 31 December 2015 are:
Dairy Commodity
Farming Trading
£’000
£’000
North
West
£’000
South
East Unallocated
£’000
£’000
Total
£’000
Total segment revenue - 13,316
5,866
5,963
Revenue - 13,316
5,866
5,963
-
-
25,145
25,145
Operating profit -
Finance income-fair value gain -
Finance cost-Interest paid -
Finance cost – notional interest -
365
-
(19)
(33)
680
-
-
-
1,089
-
-
-
(1,295)
26
(253)
-
839
26
(272)
(33)
Profit before income tax - 313
680
1,089
(1,522)
560
Income tax – corporation tax -
Income tax – deferred tax -
(44)
-
-
-
-
-
(16)
12
(60)
12
Profit for the year -
269
680
1,089
(1,526)
512
Other segment items:
£’000 £’000
Dairy Commodity
Farming Trading
North
West
£’000
South
East Unallocated
£’000
£’000
Total
£’000
Depreciation -
-
– continuing operations)
(Note 12
357
220
38
615
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 49
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Segment assets in respect of the trading divisions, consists primarily of property, plant and
equipment, goodwill, refrigerant gas, trade and other receivables. Unallocated assets comprise
financial assets at fair value through profit or loss.
Segment liabilities consist primarily of trade and other payables. Unallocated liabilities comprise
items such as current tax liabilities, deferred tax, and financial liabilities at fair value through
consolidated statement of comprehensive income, provisions and borrowings.
Capital expenditure comprises additions to property, plant and equipment.
The segment assets and liabilities at 31 December 2016 and the capital expenditure for the year then
ended are as follows:
Dairy Commodity
Farming Trading
£’000 £’000
Assets 1,375
Liabilities 173
5,996
4,291
North
West
£’000
11,759
3,706
South
East Unallocated
£’000
£’000
Total
£’000
7,223
1,531
2,016 28,369
4,098 13,799
Capital expenditure (Note 12) 573
-
330
395
77
1,375
The segment assets and liabilities at 31 December 2015 and the capital expenditure for the year then
ended are as follows:
£’000
£’000
Dairy Commodity
Farming Trading
North
West
£’000
South
East Unallocated
£’000
£’000
Total
£’000
Assets - 4,983
Liabilities -
4,189
11,581
4,929
6,940
1,516
4,303 27,807
2,656 13,290
Capital expenditure (Note 12) -
-
185
263
54
502
Segmental information for the year ended 31 December 2015 has been restated to reclassify the
Fast Moving Consumer Goods (FMCG) division of commodity trading business to discontinued
activities (see note 30).
50 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6
Staff costs
The average number of persons employed by the Group including executive directors is analysed
into the following categories:
2016
2015
Management
Administration
Technical
Operational
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
20
24
9
106
159
2016
£’000
4,005
362
46
16
22
8
107
153
2015
£’000
3,705
333
167
4,413
4,205
There was an accrual for £10,000 (2015 £42,000) included above for pension costs at 31 December
2016.
There group capitalised employee costs of £41,797 in respect of the Foro Juice business as an
intangible asset.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 51
NOTES ON THE CONSOLIDATED FINANCIALSTATEMENTS
(CONTINUED)
Key management personnel
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including any director
(whether executive or otherwise) of that entity.
The Group is of the opinion that there are no other key management personnel other than the
executive and non-executive directors. Details of directors’ remuneration are set out in note 26.
7
Financial income and expenses
Fair value gains on interest rate swaps/caps
Interest receivable
Finance income
Interest expense on bank overdrafts and loans
Notional interest on deferred consideration
Finance costs
Net finance costs
2016
£’000
2015
£’000
20
10
30
26
-
26
(240)
(29)
(272)
(33)
(269)
(305)
(239)
(279)
52 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
8
Profit before tax
The following items have been charged/(credited) to the Consolidated Statement of Comprehensive
Income in arriving at profit before tax:
Depreciation of property, plant and equipment (Cost of Sales)
Depreciation of property, plant and equipment (discontinued)
2016
£’000
625
-
2015
£’000
615
125
Staff costs (Note 6)
4,413
4,205
Foreign exchange loss
9
4
Rentals payable under operating leases
- Buildings
- Plant and machinery
Auditors’ remuneration - audit service
- non audit services
536
915
33
-
643
899
29
-
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 53
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
9
Income taxes
(a) Analysis of charge in year
UK
Corporation tax at 20% (2015: 20.25%)
Adjustment in respect of previous periods
Ireland
Corporation tax at 12.5% (2015: 12.5%)
Adjustment in respect of previous periods
Current tax charge
Deferred tax credit (Note 20)
Deferred tax credit
(b) Factors affecting tax charge for year
Profit on ordinary activities before taxation
Profit on ordinary activities multiplied
by standard UK tax rate 20% (2015: 20.25%)
Effects of:
Other expenses not deductible for tax purposes
Adjustment for tax effect of discontinued operations
Adjustment in respect tax payable on Irish Income (12.5%)
Adjustments in respect of previous periods
Adjustments in respect of IBA and tax rate change
Total tax charge for year
2016
£’000
2015
£’000
157
9
44
-
210
(18)
(18)
43
-
-
17
60
(12)
(12)
2016
£’000
633
2015
£’000
560
127
113
8
(32)
(26)
9
106
192
8
(44)
-
17
(46)
48
The deferred tax credit of £18,000 (2015: credit of £12,000) has arisen under IAS 12. In 2009 the
company applied the dual recovery method in respect of one of its main assets which triggered a tax
credit. The charge in 2016 relates to the temporary difference between the carrying value of the asset
in the consolidated statement of financial position and its tax base. The dual recovery method
continues to be applied as disposal of the asset is anticipated.
54 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Earnings per share
10
Basic earnings per share figures are calculated by dividing the weighted average number of
Ordinary Shares in issue during the period into the profit after taxation attributable to the owners
of the parent for the year.
Profit attributable to owners of parent – continuing (£’000)
Loss attributable to owners of parent – discontinuing (£’000)
Weighted average number of
ordinary shares outstanding
Basic earnings per share – continuing operations
Basic loss per share – discontinuing operations
Basic earnings per share
2016
441
(161)
2015
512
(223)
280
289
29,851,233
17,842,013
1.5p
(0.6)p
0.9p
2.8p
(1.2)p
1.6p
For the purposes of calculating diluted earnings per share, dilutive potential ordinary shares are
deemed to have been converted into ordinary shares at the beginning of the period.
Profit attributable to owners of parent – continuing (£’000)
Loss attributable to owners of parent – discontinuing (£’000)
2016
441
(161)
2015
512
(223)
280
289
Weighted average number of ordinary shares outstanding
Dilutive effect of share options
29,851,233
-
17,842,013
-
Weighted average number of shares for the calculation
of diluted earnings per share
29,851,233
17,842,013
Diluted earnings per share -continuing operations
Diluted loss per share – discontinuing operations
Diluted earnings per share- total
1.5p
(0.6)p
0.9p
2.8p
(1.2)p
1.6p
The exercise prices of all share options in issue were above the average market share price and hence
have no dilutive effect in the current year or the prior year.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 55
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
11
Goodwill
The net book value of goodwill at 31 December 2016 was £2,338,000 (31 December 2015:
£2,338,000) and relates to the Commodity Trading business segment. The goodwill arose on the
acquisition of Townview Foods Limited in 2012 and this is the cash generating units (CGUs) to
which the goodwill has been allocated.
The recoverable amount of the CGU is based upon value in use. The key assumption in determining
value in use is the underlying profitability of the acquired business which depends upon a number of
factors including prices and volumes negotiated with both key suppliers and customers. The business
has an established trading history, which together with input from both the board and existing
management team of Townview Foods Limited, is forecast to generate net cash flows for each of the
next ten years. A discount rate of 9.1% has been used.
Other intangible assets
Other intangible assets amounting to £65,000, comprise the rights to use brands under contractual
arrangements from third parties. Work was on going to secure these rights at the balance sheet date
and the amount capitalised represents an intangible asset under development. Accordingly, no
amortisation has been charged in the year.
12
Property, plant and equipment
Cost
At 1 January 2016
Additions
At 31 December 2016
Depreciation
At 1 January 2016
Charge for year
At 31 December 2016
Net book value
31 December 2016
Freehold
Land
£’000
Leasehold
Buildings
£’000
Plant and
Equipment
£’000
Total
£’000
3,544
-
3,544
-
-
-
13,190
536
9,152
839
25,886
1,375
13,726
9,991
27,261
4,198
242
5,803
383
10,001
625
4,440
6,186
10,626
3,544
9,286
3,805
16,635
56 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Cost
At 1 January 2015
Additions
At 31 December 2015
Depreciation
At 1 January 2015
Charge for year
At 31 December 2015
Net book value
31 December 2015
Freehold
Land
£’000
Leasehold
Buildings
£’000
Plant and
Equipment
£’000
Total
£’000
3,544
-
3,544
-
-
-
13,190
-
8,650
502
25,384
502
13,190
9,152
25,886
3,956
242
5,430
373
9,386
615
4,198
5,803
10,001
3,544
8,992
3,349
15,885
Included within the net book value of £16.6m is £799,000 (2015: £614,000) relating to assets
held under finance lease. Security of these financed assets are held with the relevant finance
companies. The depreciation charged in the financial statements in the year in respect of such
assets amount to £35,000 (2015: £35,000).
The company has carried out impairment reviews on a number of its properties. In carrying out
the review an annual discount factor of 9.1% was applied to future cash flows and best estimates
were used for realisable values at the end of the period. It was concluded that there were no
impairments necessary in 2016 (2015 £Nil).
13 Biological Assets
During the year the Group acquired a dairy herd which was initially measured at fair value less
point of sale costs of £302,000. The herd will produce calves in Spring 2017 and be used for milk
production thereafter. There was no agricultural produce during the period. The fair value less
point of sale costs of the herd at the balance sheet date was £540,000 resulting in a movement in
fair value of £238,000 which has been recognised in the Consolidated Statement of
Comprehensive Income.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 57
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14
Trade and other receivables
Trade receivables
Less: Provision for impairment of trade receivables
Trade receivables - net
Other receivables
Prepayments
Transfer to disposal group (note 30)
2016
£’000
5,356
(8)
5,348
907
707
(698)
2015
£’000
4,133
(1)
4,132
511
764
(592)
6,264
4,815
All amounts fall due within one year therefore the fair value is considered to be approximately
equal to the carrying value. All of the Group’s trade and other receivables are denominated in
Pounds sterling.
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.
The group has entered into a confidential invoice discounting facility. This facility is secured on
the trade receivables above.
As at 31 December 2016 trade receivables of £8,000 (2015: £1,000) were impaired. The other
classes within trade and other receivables do not contain impaired assets.
As of 31 December 2016, trade receivables of £1,416,000 (2015: £805,000), were past due of
which £8,000 (2015: £1,000) were impaired. These relate to a number of independent customers
for whom there is no recent history of default. The ageing analysis of these receivables is as
follows:
Up to 3 Months
Over 3 Months
2016
£’000
1,393
23
1,416
2015
£’000
730
75
805
58 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
15
Inventories
Goods for resale
2016
£’000
483
2015
£’000
386
483
386
Goods for resale consist of commodity products purchased by Townview Foods Limited and
Foro International Connections Limited for resale. There were no write downs of stock during
the financial year. A credit of £97,000 was taken to the Statement of Comprehensive Income
during the year.
16
Financial liabilities
At 1 January 2015
Deferred consideration paid
Charged to the Consolidated Statement of
Comprehensive Income
At 31 December 2015
Deferred consideration paid
Charged to the Consolidated Statement of
Comprehensive Income
At 31 December 2016
Current fair value financial liabilities
Non-current fair value financial liabilities
At 31 December 2016
Contingent
Consideration
£’000
631
(185)
33
Caps/
Swaps
£’000
56
-
(25)
479
(220)
29
288
244
44
288
31
-
(20)
11
11
-
11
Total
£’000
687
(185)
8
510
(220)
9
299
255
44
299
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 59
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Fair value of interest rate swaps/caps
The notional principal amount of the outstanding interest rate swaps contract at 31 December
2016 was £3m (2015: £6m).
Financial assets/liabilities at fair value though profit or loss are presented within the section on
investing activities in the Cash Flow Statement.
Changes in fair value of financial assets/liabilities through profit or loss are recorded within
finance income/expense in the Consolidated Statement of Comprehensive Income - see note 7.
The above assessment has been performed applying valuation techniques derived from quoted
prices.
This assessment has been consistent between periods and as such it is considered that level 2 of
the fair value hierarchy as defined in IFRS 13 has been applied consistently.
Contingent consideration
At 31 December 2012, the Group recognised contingent consideration of £1,588,000 in connection
with the acquisition of Townview Foods Limited (see note 29). The directors valued the contingent
consideration using a probability weighted discounted cash flow model. The most significant
assumption is the quantum of earnings before interest and tax of Townview Foods Limited for each
of the next three years.
At date of acquisition the Group paid £2,750,000 for the net assets on completion. The net assets
acquired were £2,858,000 and the balance of £110,000 was paid in January 2013. During the year
ended 31 December 2016 £220,000 (2015: £185,000) of contingent consideration was paid.
As explained in note 29, the Board re-assessed the remaining amount of contingent consideration to
be paid at 31 December 2013 resulting in a credit of £737,000 to the Consolidated Statement of
Comprehensive Income. The Board re-assessed the remaining amount of contingent consideration to
be paid at 31 December 2014 and 31 December 2015 and concluded that that there had not been a
significant change in the value of the liability. The Board have also re-assessed the remaining
amount of contingent consideration to be paid at 31 December 2016 and concluded that there has not
been a significant change in the value of the liability. Interest of £29,000 (2015: £33,000) has been
charged to the Consolidated Statement of Comprehensive Income representing unwinding of the
discount. There has been no change to the fair value on the contingent consideration as a result of
changes in the assessment of credit risk.
Of the total amount of contingent consideration recognised at 31 December 2016, £244,000 (2015:
£211,000) has been included within current liabilities and £44,000 (2015: £268,000) has been
included in non-current liabilities. The gross undiscounted payments equate to £297,000.
In respect of the above assessment it is considered that level 3 of the fair value hierarchy as
defined in IFRS 13 has been applied.
60 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
17
Trade and other payables
Trade payables
Value added tax and payroll taxes
Accruals
Deferred Income
Transfer to disposal group (note 30)
2016
£’000
3,581
388
1,083
37
(7)
2015
£’000
2,927
348
1,119
11
(207)
5,082
4,198
All amounts are short term. The net carrying value of trade payables is considered a reasonable
approximation of fair value.
18
Current tax liabilities
Corp oration tax - UK
Corporation tax - Ireland
The above liabilities are all payable within 1 year.
2016
£’000
165
40
205
2015
£’000
54
(10)
44
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 61
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
19
Borrowings
Current
Finance Leases
Invoice finance
Bank overdraft
Term Loans
Non Current
Finance Leases
Non-current bank borrowings
2016
£’000
182
2,951
304
845
2015
£’000
135
2,511
-
827
4,282
3,473
378
2,628
354
3,769
3,006
4,123
Total Borrowings
7,288
7,596
The Group arranged the following borrowing facilities with HSBC Bank plc and its subsidiary
HSBC Invoice Finance Limited.
(a) HSBC Bank plc agreed to a term loan of £7.5 million drawn down in December 2005 over a
maximum period of 15 years and an overdraft facility of £0.4 million which is reviewed
annually.
(b) HSBC Bank plc agreed to a term loan of £2 million drawn down in March 2008 over a
maximum period of 15 years.
(c) HSBC Bank plc agreed to a term loan of £0.9 million drawn down in January 2012 over a
maximum period of 10 years.
(d) HSBC Bank plc agreed to a term loan of £1.5 million drawn down in May 2014 over a
maximum period of 5 years with a 15 year repayment profile.
(e) HSBC Invoice Finance Limited agreed to allow the Group to borrow up to an amount
equivalent to 90% of trade debtors in respect of Norish Limited debtors, 90% in respect of
Townview Foods Limited debtors, and 90% in respect of Foro International Connections
Limited subject to an overall maximum limit of £4.25m (2015: £4.25m) which is reviewed
annually.
62 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Overdraft interest is charged quarterly at an interest rate of bank base rate plus 2.25% (2015:
2.25%). Invoice finance interest is charged on a daily basis at bank base rate plus 2.25% (2015:
2.25%). Term Loan (a) above is charged quarterly at an interest rate of bank base rate plus 1.2%
(2015: 1.2%). Term Loan (b) above is charged quarterly at an interest rate of bank base rate plus
1.75% (2015:1.75%).Term Loan (c) above is charged quarterly at an interest rate of bank base
rate plus 2.75% (2015: 2.75%). Term Loan (d) above is charged quarterly at an interest rate of
bank base rate plus 3% (2015:3%).
The group has the following swap in place:
(a) £3m (2015: £3m) at a fixed rate of 1.03% expiring on the 14 June 2017.
The liabilities of Norish Plc pursuant to these facilities agreements are secured by:
(1) debentures creating first fixed and floating charges over all the assets, past present and
future of Norish Limited and its subsidiaries;
(2) unlimited multilateral guarantees given by all Group companies each guaranteeing
payment of the liabilities of the other;
(3) legal mortgages held over the Bury St. Edmunds, Wrexham, York, and Gillingham
properties.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 63
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The fair value of the Group’s financial liabilities as at 31 December 2016 was as follows:
2015
2016
Current bank borrowings
Non-current bank borrowings
Book
Value
£’000
4,282
3,006
Fair
Value
£’000
4,282
3,006
Book
Value
£’000
3,473
4,123
Fair
Value
£’000
3,473
4,123
7,288
7,288
7,596
7,596
The Group pays interest at the base rate plus a margin of 1.2% to 3.0% which is reviewed
quarterly. It is assumed that the Book Value reflects the Fair Value.
The carrying amounts of the Group’s borrowings are all denominated in Pounds Sterling.
The un-drawn committed facilities available to the Group are set out below:
Floating rate, expiring within one year
Invoice finance
Bank overdraft
2016
£’000
1,187
96
2015
£’000
705
400
1,283
1,105
64 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
20
Deferred tax
Deferred tax liabilities:
Deferred tax liabilities to be recovered after more than 12 months
Deferred tax liabilities to be recovered within 12 months
2016
£’000
905
20
925
2015
£’000
922
20
942
The movement in deferred tax liabilities during the year, without taking into consideration the
offsetting of balances within the same tax jurisdiction, is as follows:
Deferred tax liabilities
Accelerated
capital
allowances
£’000
Fair value
gains
£’000
At 1 January 2015
(Credited) charged to the Consolidated Statement of
Comprehensive Income
At 31 December 2015
Charged (credited) to the Consolidated Statement of
Comprehensive Income
At 31 December 2016
965
(29)
936
(12)
924
(11)
17
6
(5)
1
Total
£’000
954
(12)
942
(17)
925
The deferred tax liability due after more than one year prior to offsetting is £905,000 (2015:
£922,000).
As a result of using the deferred tax dual recovery method in regard to the sale of assets it could
potentially give rise to a deferred tax asset totalling £97,000 (2015: £102,000). However, the
board feels that it is highly unlikely that this will ever be recoverable and have not provided this
amount in the accounts.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 65
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
21
Share capital
Authorised
2016
£’000
2015
£’000
60,000,000 (2015: 60,000,000) Ordinary shares of €25c each
10,836
10,836
Allotted, called up and fully paid
Ordinary shares of €25c each
At 1 January 2015
Issued during the year
At 31 December 2015
Issued during the year
Number
£’000
17,106,376
11,427,317
28,533,693
1,426,685
________
3,280
2,064
5,344
272
At 31 December 2016
29,960,378
5,616
During the year, the company issued 1,426,685 (2015: 11,427,317) Ordinary shares of €25c each
for a total cash consideration of £564,000 (2015: £5,142,000). The excess over nominal value of
£291,000 (2015: £3,078,000) less share issue costs of £nil (2015: £286,000) has been transferred
to the share premium account.
All shares are equally eligible to receive dividends and the repayment of capital and represent one
vote at a shareholders’ meeting.
66 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Share Premium
At 1 January
Share Issue
Issue costs
At 31 December
Share options
2016
£’000
6,990
291
(-)
2015
£’000
4,198
3,078
(286)
7,281
6,990
The Board shall in its absolute discretion select any number of individuals who may at the intended
date of grant be participants and invite them to apply for the grant of options to acquire shares in
the company. The subscription price at which shares may be acquired on the exercise of any option
granted in response to the application shall be determined by the Board but shall not be less than
the mid-market value of the share on the day the invitation to apply for the option is issued or the
nominal value of the share.
The shares can be exercised between the third and the tenth anniversary of the date of grant,
provided the Board is satisfied that there has been an increase in the earnings per share at least
equivalent to the percentage increase in the Consumer Price Index plus 5% (or such greater
percentage as is fixed by the Board) compound per annum.
The Group has applied the exemption available, and has applied the provisions of IFRS 2 only to
those options granted after 7 November 2002 and which were not vested at 1 January 2006 and
all options granted since that date.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 67
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Movements in the number of share options outstanding and their related weighted average
exercise price are as follows:
2016
2015
Weighted
Average
Exercise
Price
Options
Number
Weighted
Average
Exercise
Price
Options
Number
Outstanding at 1 January
250,000 0.58
250,000
Outstanding at 31 December
250,000 0.58
250,000
0.58
0.58
Exercisable at 31 December
250,000 0.58 250,000
0.58
The share options outstanding at the end of the year expire June 2018 at an exercise price of 58p.
The fair value of options granted was estimated on the date of grant using the Black-Scholes option
pricing model. While the Black-Scholes model does not take into account the performance
conditions attached to the award, the directors are of the opinion that the charge recorded would not
be materially different if a lattice model (which would take such conditions into account) had been
employed. The following assumptions were used for the option grant in 2007:
Modification date
Grant date
Share price at grant date
Exercise price
Shares under option
Vesting period (years)
Expected volatility
Expected life (years)
Risk free rate
Dividend yield
Fair value
27 June 2008
18 September 2007
£0.58
£0.58
250,000
3
40%
3.5
5%
3%
£42,500
A modification was carried out on 27 June 2008 so that the shares would qualify under the
Enterprise Management Incentive Scheme (EMI). The original shares issued under a HMRC
unapproved company share option scheme were cancelled and new shares were issued to replace
these under the EMI scheme. Expected volatility was calculated at 40% which was relatively
typical at the time of the grant of shares for a FTSE 100 company. The company has an 18%
volatility over the 5 years between September 2008 and November 2010.
During the year the Group agreed to establish a Joint Share Ownership Plan (JSOP) whereby
employees or directors may be invited to acquire, jointly with a trust, shares in the company. The
employee or director benefits from future growth in the share price subject to certain
performance criteria being met. There were no transactions connected with the JSOP during the
year.
68 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
22
Capital conversion reserve fund
Capital conversion reserve fund
2016
£’000
23
2015
£’000
23
During 1999 the company re-denominated the authorised share capital of the company from Irish
Punts to Euro in accordance with Section 26 of the European Monetary Union Act 1998. This
resulted in a reduction in respect of the issued shares which was transferred to the Capital
conversion fund.
23
Cash and cash equivalents
Cash at bank and on hand
24
Dividends
Final dividend paid in respect of the previous year
of 1.50 cent (2015: 1.50 cent) per ordinary share
2016
£’000
2,044
2015
£’000
4,383
2,044
4,383
2016
£’000
346
2015
£’000
188
The Board recommends the payment of a final dividend of 1.50 cent per share. This will be paid on 20
October 2017 to those shareholders on the register on 29 September 2017. It will bring the total dividend
in respect of the financial year to 1.50 cent per share compared with 1.50 cent last year.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 69
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
25
Commitments and contingencies
(a) Operating leases
The Group leases various warehouses under non-cancellable operating lease agreements.
The leases have varying lease terms, escalation clauses and renewal rights.
The Group also leases various plant and equipment under operating lease agreements.
The lease expenditure charged in the year is shown in Note 8.
The future aggregate minimum lease payments under non-cancellable operating leases
are as follows:
2016
2016
Other
Land and operating
leases
Buildings
£’000
£’000
2016
2015
2015
Other
Land and operating
leases
£’000
Total Buildings
£’000
£’000
Expiring:
Within one year
Between two and five years
Beyond five years
468
1,715
2,283
655
829
-
1,123
2,544
2,283
373
1,322
1,890
777
1,178
22
2015
Total
£’000
1,150
2,500
1,912
4,466
1,484
5,950
3,585
1,977
5,562
(b) Guarantees on leasehold properties
The annual operating lease commitment on land and buildings of £468,000 (2015:
£373,000) arises on leasehold properties.
(c) Capital commitments
At 31 December 2016, the Group had £344,000 (2015: £Nil) of capital projects
authorised of which £344,000 (2015: £Nil) was contracted at 31 December 2016.
70 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(d) Finance leases
The future aggregate minimum lease payments under non-cancellable finance leases are
as follows:
Within one year
Between two and five years
Beyond five years
26
Directors’ remuneration
Ted O’Neill
Kieran Mahon
Norman Hatcliff (Retired 31st December 2015)
Aidan Hughes
Torgeir Mantor
Willie McCarter
Sean Savage
Aggregate emoluments
Company pension contributions
2016
£’000
182
295
83
560
2015
£’000
135
300
54
489
2016
£’000
2015
£’000
114
151
-
111
14
14
14
418
2016
£’000
409
9
418
101
41
214
111
14
14
14
509
2015
£’000
431
78
509
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 71
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Details of directors’ interests in shares and share options are set out on pages 14 and 15.
Directors’ remuneration shown above comprises all of the fees, salaries, pensions and other
benefits and emoluments paid to Directors.
The basis of the Directors’ remuneration and the level of bonuses paid are fixed by the
Remuneration Committee of the Board.
27
Pensions
The Group operates a defined contribution scheme. The assets of the scheme are independent of
the assets of Norish plc and are invested with assurance companies and are held in trusts for the
employees concerned.
Total pension costs for the year were £46,000 (2015: £167,000).
There was an accrual for £10,000 (2015: £42,000) included above for pension costs at 31
December 2016.
72 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
28
Group undertakings
Subsidiary undertakings Holding
Nature of business
Incorporated in Republic of Ireland
Direct
Roebuck Investments Limited
95% (Note 1)
Intermediate holding company
Foro International Connections Ltd 90%
Commodity trading
Cantwellscourt Farm Limited
100%
Dairy Farming
Incorporated in Northern Ireland
Norish (U.K.) plc
Norish (N.I.) Limited
100%
100%
Townview Foods Limited
(subsidiary of Roebuck Investments Limited)
100%
Incorporated in England
Norish Limited
(subsidiary of Norish (N.I.) Limited)
Belvedere Warehousing Limited
(subsidiary of Norish Limited)
100%
100%
Norish Warehousing Limited
100%
(subsidiary of Belvedere Warehousing Limited)
Investment company
Property management
Commodity trading
Cold storage
Non-trading
Non-trading
Note 1: As part of the transaction to acquire Townview Foods Limited in 2012, the vendor acquired a
5% interest in the ordinary shares of the acquisition vehicle, Roebuck Investments Limited, a
subsidiary undertaking of Norish plc. Subject to certain conditions, Norish plc has the right to acquire
these shares at their nominal value (£5) on or after 1 August 2018. Furthermore, through the
ownership of the preferred ordinary shares in Roebuck Investments Limited, Norish plc has secured
the entire equity interest in Townview Foods Limited to 1 August 2018 and beyond. Accordingly, the
board consider that a financial liability of £5 should be recorded in these consolidated financial
statements in respect of the vendor’s interest and that Norish plc should account for 100% of the
equity interest in Townview Foods Limited.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 73
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(a) The registered offices of Norish plc and its subsidiary undertakings are set out below:
Norish plc
Roebuck Investments Limited
Foro International Connections Limited
South Bank House,
Barrow Street, Dublin 4, Republic of Ireland
Norish (U.K.) plc,
Norish (N.I.) Limited
79 Chichester Street
Belfast BT1 4JE
Norish Limited,
Northern Industrial Estate
Belvedere Warehousing Limited,
Norish Warehousing Limited
Townview Foods Limited
Bury St Edmunds, Suffolk, IP32 6NL
7 Carrivekeeney Road
Newry, County Down, BT35 7LU
Cantwellscourt Farm Limited
O’Neill Foley, Patrick Street, Kilkenny,
Republic of Ireland
(b) The issued share capital of the subsidiary undertakings is as follows:
Norish (U.K.) plc
50,000 Ordinary shares of £1 each
10,146,180 A Ordinary shares of £0.0001 each
Norish (N.I.) Limited
480,000 Ordinary shares of £1 each
1 A Ordinary share of £1 each
Norish Limited
60,000 Ordinary shares of £1 each
Belvedere Warehousing Limited
8,000 Ordinary shares of £1 each
Norish Warehousing Limited
4,000 Ordinary shares of £0.25 each
Townview Foods Limited
100 Ordinary shares of £1 each
Roebuck Investments Limited
95 Ordinary shares of €1 each
5 Preferred ordinary shares of €1 each
Foro International Connections Ltd 1,000 Ordinary shares of £1each
322,120 Preferred shares of £1 each
Cantwellscourt Farm Ltd
100,000 Ordinary shares of £1 each
74 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
29 Contingent Consideration
In 2012, the Group acquired the entire issued share capital of Townview Foods Limited, a meat
import company based in Newry, Northern Ireland.
At date of acquisition the Group paid £2,750,000 for the net assets on completion. The net assets
acquired were £2,858,000 and the balance of £110,000 was paid in January 2013. During the
year ended 31 December 2016, £220,000 (2015: £185,000; 2014: £174,000; 2013: £170,000) of
contingent consideration was paid.
Contingent consideration is payable at the rate of 50% of Townview Foods Limited’s earnings
before interest and tax payable in six monthly instalments for each of the five years ending
following the acquisition subject to a maximum amount payable to the vendor of £8.25m. In
addition to these amounts, in the six month periods ending 30 June 2014 and 31 December 2014
amounts became payable to the vendor if earnings before interest and tax in any given six month
period exceeded £868,000 and £970,000 respectively. No payments have been made in respect of
these amounts.
The amount included as consideration above represented the Board’s estimate of fair value of the
purchase consideration, valuing the contingent consideration using a probability weighted
discounted cash flow model consistent with level 3 of the fair value hierarchy as defined in IFRS
13. Earnings before interest and tax were initially extracted from the acquisition model and a
discount rate of 9.1% was applied. Subsequently, budgets and forecasts have been prepared as
part of the Group’s financial planning activities which in turn have allowed the estimated amount
of contingent consideration that the Group will need to pay to be recalculated. Based on
performance during 2016 and that expected over the remaining measurement period, the Board
estimated that the fair value of contingent consideration still to be paid at 31 December 2016 was
£288,000 (2015 : £479,000).
The Board has re-assessed the remaining amount of contingent consideration to be paid at 31
December 2016 and have concluded that that there has not been a significant change in the value
of the liability. Interest of £29,000 (2015: £33,000) has been charged to the Consolidated
Statement of Comprehensive Income representing unwinding of the discount.
The undiscounted range of outcomes can range from a low of £607,000 to a high of £4,642,000.
At 31 December 2016 liabilities include £288,000 (2015: £479,000).
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 75
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
30 Discontinued operations and assets classified as held for sale
During 2013, the Board made the decision to focus the Group’s storage operations exclusively on
cold storage in both the South East and North West of the United Kingdom. Consequently, the
Board agreed to exit the Group’s storage operations in the North of England comprising both the
York ambient storage site and Leeds cold store. The York ambient storage site’s carrying value
was to be recovered by a sale of the site and accordingly, these activities were classified as held
for sale. The disposal of the site completed during 2014. The Leeds site was sold in March 2016
for £425,000(net of fees of £25,000) of which £300,000 has been paid and £150,000 is due
before March 2018. £100,000 due March 2017 and £50,000 due March 2018.
Prior to the transfer of these sites to assets held for sale in 2013, the group impaired the carrying
value by £677,022 to £2.3m. During 2014, the group impaired a further £200,000.
During the year ended 31 December 2016 the Group discontinued the FMCG business in the
commodity trading division.
Financial information in respect of this component of the Group is summarised below.
Operating cash flows
Investing cash flows
Financing cash flows
2016
£’000
(62)
-
-
2015
£’000
(478)
-
-
Total cash flows
(62)
(478)
Property, plant and equipment
Other current assets
2016
£’000
-
698
2015
£’000
425
592
Total assets of the disposal group classed as held for sale
698
1,017
76 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Trade and other payables
Total liabilities of the disposal group classed as held for sale
Revenue
Expenses
2016
£’000
2015
£’000
(7)
(7)
2016
£’000
491
(652)
(207)
(207)
2015
£’000
519
(742)
Loss after tax of discontinued operations
(161)
(223)
32 Post-reporting date events
No significant events have taken place since the year-end that would result in adjustment to the
financial statements or the inclusion of a note thereto.
33 Related party transactions
Consultancy services totalling £Nil (2015:£1,000) were provided by a relative of a director
during the year. There was £nil outstanding as at 31 December 2016 (2015:£nil).
34 Approval of financial statements
The Board of Directors approved these financial statements on 22 March 2017.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 77
COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2016
Note
5
6
7
8
Fixed assets
Investments – Shares in group undertakings
Current assets
Debtors
Creditors: amounts falling due within one year
Net current assets
Net assets
Equity
Called up share capital
Share premium account
Capital conversion reserve fund
Treasury shares
Profit and loss account
Shareholders’ funds
Approved on behalf of the board on 22 March 2017 by:
T.J. O’Neill
Chairman
A. Hughes
Finance Director
2016
£’000
2015
£’000
1,056
852
11,769
11,955
(426)
(388)
11,343
11,567
12,399
12,419
5,616
7,281
23
(563)
42
5,344
6,990
23
-
62
12,399
12,419
78 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
COMPANY STATEMENT OF CHANGES IN EQUITY
Share
Premium
Account
£’000
Capital
Conversion
Reserve
Fund
£000
Treasury
Shares
£’000
Profit
And
Loss
Account
£’000
Share
Capital
£’000
3,280
-
-
2,064
-
5,344
-
-
-
At 1 January 2015
Loss for the financial
year
Dividends paid(note 4)
Share issue
Share issue costs
At 31 December 2015
Profit for the financial
year
Dividends paid(note 4)
Treasury
shares
acquired
Share issue
At 31 December 2016
4,198
-
-
3,078
(286)
6,990
-
-
-
272
5,616
291
7,281
23
-
-
-
-
23
-
-
-
-
23
-
-
-
-
-
-
-
-
(563)
-
(563)
291
(51)
(178)
-
-
62
341
(361)
-
-
42
Total
£’000
7,792
(51)
(178)
5,142
(286)
12,419
341
(361)
(563)
563
12,399
Share premium account: This represents the net proceeds from issuing shares in excess of the
nominal value of those shares.
Capital conversion fund: During 1999 the company re-denominated the authorised share
capital of the company from Irish Punts to Euro in accordance with Section 26 of the European
Monetary Union Act 1998. This resulted in a reduction in respect of the issued shares which was
transferred to the Capital conversion fund.
Profit and loss account: The represents cumulative retained profits and losses net of
distributions to shareholders.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 79
NOTES TO THE ACCOUNTS
1
Accounting policies
Norish plc is the parent company of the Norish plc group of companies. The company is listed on
the Alternative Investments Market (“AIM”), and is incorporated and domiciled in the Republic
of Ireland. The address of its registered office is Norish plc, 6th Floor, South Bank House,
Barrow Street, Dublin 4, Republic of Ireland.
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the Company financial statements.
Basis of preparation
The individual financial statements of Norish plc have been prepared in accordance with IFRS as
adopted by the European Union, applicable Irish law and the AIM rules. The accounting policies
applied are described in the Basis of Preparation contained in the consolidated IFRS financial
accounts within these financial statements.
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise judgment in applying the
Company's accounting policies (see note 2).
80 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES TO THE ACCOUNTS (CONTINUED)
Exemptions taken
The following exemptions from the requirements of EU adopted IFRS have been applied in the
preparation of these financial statements:
(a)
(b)
(c)
(d)
(e)
the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share based Payment
because this information is given in the notes to the consolidated financial statement
for the Group;
IFRS 7 ‘Financial Instruments: Disclosures’;
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
Paragraph 38 of IAS 1, ‘Presentation of financial statements’ comparative information
requirements in respect of paragraph 79 (a) (iv).
The following paragraphs of IAS 1, ‘Presentation of financial statements’:
i. 10 (d) (statement of cash flows);
ii. 10 (f) (a statement of financial position as at the beginning of the
preceding period when an entity applies an accounting policy
retrospectively or make a retrospective restatement of items in its financial
statements, or when it reclassifies items in its financial statements);
iii. 16 (statement of compliance with all IFRS);
iv. 38A (requirement for a minimum of two primary statements, including
cash flow statements);
v. 38B-D (additional comparative information);
vi. 40A-D (requirements for a third statement of financial position);
vii. 111 (cash flow statement information); and
viii. 134-136 (capital management disclosures).
(f)
(g)
(h)
(i)
IAS 7 ‘Statement of cash flows’;
Paragraphs 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting estimates
and errors’;
Paragraph 17 of IAS 24 ‘Related party disclosures; and
The requirements in IAS 24 ‘Related party disclosures’ to disclose related party
transactions entered into between two or more members of a group.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 81
NOTES TO THE ACCOUNTS (CONTINUED)
2
Judgments in applying accounting policies and key sources of estimation uncertainty
Impairment
In assessing impairment, management estimates the recoverable amount of each asset or cash-
generating units based on expected future cash flows and uses an interest rate to discount them.
Estimation uncertainty relates
the
determination of a suitable discount rate.
to assumptions about future operating results and
3
(Loss)/profit of the company
In accordance with Section 304 of the Companies Act, 2014 a separate profit and loss account
for the Company has not been presented. The profit for the year arising in Norish plc amounted
to £341,000 (2015: loss of £51,000).
4
Dividends paid and proposed
Final dividend paid in respect of the previous year
of 1.50 cent (2015: 1.50cent) per ordinary share
2016
£’000
2015
£’000
(361)
(178)
The group paid a total dividend in 2016 of £361,000 (2015: £188,000), of which £346,000
(2015: £178,000) was paid through the company and £nil (2015: £10,000) was paid through
Norish UK plc under the Twin Share Option Scheme.
82 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
NOTES TO THE ACCOUNTS (CONTINUED)
5
Investments – Shares in group undertakings
Cost and net book value at 1 January
Additions
2016
£’000
852
204
2015
£’000
752
100
Cost and net book value at 31 December
1,056 852
In the opinion of the Directors, the value of shares in subsidiary undertakings is not less than the original
book value.
Details of the Company’s subsidiary undertakings are presented in Note 28 to the consolidated IFRS
accounts within these financial statements.
6
Debtors
Amount receivable from subsidiary undertakings
Other debtors
Corporation tax
2016
£’000
11,764
5
-
2015
£’000
11,945
-
10
11,769
11,955
Amounts due from Group undertakings are unsecured, interest free, have no fixed date of repayment and are
repayable on demand.
7
Creditors: Amounts falling due within one year
Amounts owed to subsidiary undertakings
Corporation tax
2016
£’000
388
38
2015
£’000
388
-
426
388
Amounts due to Group undertakings are unsecured, interest free, have no fixed date of repayment and are
repayable on demand.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 83
NOTES TO THE ACCOUNTS (CONTINUED)
8 Called up share capital
Authorised
2016
£’000
2015
£’000
60,000,000 (2015: 60,000,000) Ordinary shares of €25c each
10,836
10,836
Allotted, called up and fully paid
Number
£’000
Ordinary shares of €25c each
At 1 January 2015
Issued during the year
At 31 December 2015
Issued during the year
17,106,376
11,427,317
28,533,693
1,426,685
________
3,280
2,064
5,344
272
At 31 December 2016
29,960,378
5,616
The total Ordinary shares in issue are 29,960,378 (2015: 28,533,693). These are all fully paid up.
During the year, the company issued 1,426,685 Ordinary shares of €25c each for a total cash
consideration of £564,000 (2015: £5,142,000). The excess over nominal value of £291,000
(2015: £3,078,000) less share issue costs of £nil (2015: £286,000) has been transferred to the
share premium account.
Details of share options that were granted by the company are presented in note 21 to the
consolidated IFRS financial accounts within these financial statements.
9
Financial commitments and contingencies
At 31 December 2016, the Group had £344,000 (2015: £Nil) of capital projects authorised of
which £344,000 (2015: £Nil) was contracted at 31 December 2016.
At the 31 December 2016, the Company has exposure for the debts of Norish Limited and
Townview Foods Limited totalling £7,288,000 (2015: £7,107,000) to HSBC Bank plc.
The liabilities of Norish Limited pursuant to these facilities agreements are secured by:
(1) debentures creating first fixed and floating charges over all the assets, past present and
future of Norish Limited and its subsidiaries;
(2) unlimited multilateral guarantees given by all Group companies each guaranteeing
payment of the liabilities of the other;
(3) legal mortgages held over the Bury St. Edmunds, Wrexham, York and Gillingham
properties.
84 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016
HISTORICAL FINANCIAL SUMMARY
Consolidated income statement
2012
£’000
2013
£’000
2014
£’000
2015
£’000
2016
£’000
Revenue – continuing
13,552
22,811
23,645
25,145
32,098
– discontinuing
Trading profit – continuing
– discontinued
Other Income
Other exceptional items
Net finance expenses
Depreciation
Profit/(loss) before taxation
Taxation
Profit/(loss) for the financial year
1,324
1,035
-
109
(317)
(287)
(595)
(55)
(24)
(79)
720
1,151
(946)
315
-
(147)
(556)
(183)
104
497
1,730
(300)
-
-
(370)
(598)
462
(164)
2,889
1,454
(223)
-
-
(279)
(615)
337
(48)
491
1,259
(161)
238
-
(239)
(625)
472
(192)
(79)
298
289
280
Dividends
(93)
(108)
(169)
(188)
(346)
Consolidated Statement of Financial Position
2012
£’000
2013
£’000
2014
£’000
2015
£’000
2016
£’000
Total assets less current liabilities
Non-current assets
Current assets
Current liabilities
19,275
4,431
(7,136)
15,289
6,048
(7,512)
18,336
4,949
(6,451)
18,223
10,601
(8,233)
19,578
9,489
(9,831)
Financed by
Share capital
Share premium account
Capital conversion reserve fund
Treasury shares
Retained earnings
Non-controlling interest
Shareholders’ funds – equity
Provisions
Deferred tax
Deferred consideration
Long term liabilities
16,570
13,825
16,834
20,591
19,236
1,841
3,276
23
-
2,927
-
8,067
145
1,046
1,422
5,890
2,056
3,463
23
-
2,740
-
8,282
185
863
594
3,901
3,280
4,198
23
-
2,878
(9)
10,370
-
954
425
5,085
5,344
6,990
23
-
2,981
(11)
15,327
-
942
199
4,123
5,616
7,281
23
(563)
2,926
(22)
15,261
-
925
44
3,006
16,570
13,825
16,834
20,591
19,236
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016 85
N O R I S H P L C
Registered Office
6th Floor
South Bank House
Barrow Street
Dublin 4
Operational Head Office
Northern Industrial Estate
Bury St Edmunds
Suffolk
IP32 6NL
86 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2016