ANNUAL
REPORT & FINANCIAL STATEMENTS
2019
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2013 1
ANNUAL REPORT 2019
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
FINANCIAL CALENDAR 2020
Page
1
2
3 - 5
6 - 7
8 - 9
10
11
12 - 25
26
27 – 32
33 - 34
35
36
37
38 - 80
81
82
83 - 86
Announcement of preliminary results
Annual Report posted to shareholders
Annual General Meeting
13 March 2020
8 April 2020
21 May 2020
Announcement of interim results
18 September 2020
CORPORATE PROFILE
Background
Norish plc (“Norish”) is a leading provider of temperature controlled warehousing and related services to
the food manufacturing, distribution, retail and food service sectors. Norish was founded in 1975 and
became a public company in 1986. Its shares are listed on the Alternative Investment Market (AIM) of
the London Stock Exchange.
Norish mainly operates strategically located temperature controlled storage centres, each of which provides
storage, freezing, picking, and order assembly services to food companies engaged in processing,
wholesaling and retailing.
Norish is also involved in both commodity trading (Meat, Dairy and Fish) and a dairy farming operation in
Kilkenny, Ireland.
Norish is developing an A2-protein milk supply and combining this with novel dairy processing IP, to
develop an early-life stage milk-based beverage targeting high-value export markets, through its subsidiary
Grass 2 Milk based in Naas, 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
Temperature controlled Division
◼ Brierley Hill, West Midlands (Cold store)
◼ Wrexham, Clwyd (Cold store)
◼ Bury St. Edmunds, Suffolk (Cold store)
◼ Braintree, Essex (Cold store)
◼ Lympne, Kent (Cold store)
◼ Gillingham, Kent (Cold store)
Product Sourcing
◼ Newry, Northern Ireland (Townview Foods Limited offices)
◼ Dublin, Ireland (Foro International Connections Limited offices)
Dairy Farming
◼ Kilkenny, Ireland (Cantwellscourt Farm)
◼ Naas, Ireland ( Grass 2 Milk)
Discontinued Operations
◼ Dublin, Ireland (Juice business based at Foro International Connections Limited offices)
◼ Dublin, Ireland (FMCG business based at Foro International Connections Limited offices)
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 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
2019
£’000
2018
£’000
Restated
36,500
36,802
2,736
2,388
6.57p
6.57p
2.2
Nil
1.90c
2,393
2,000
5.13p
5.13p
2.8
Nil
1.80c
1.90c
1.80c
£’000
17,253
9,692
£’000
Restated
15,985
10,523
26,945
26,508
Gearing – excluding goodwill (see Note 1 below)
65%
77%
Note 1
The above gearing figures are expressed as net borrowings (total borrowings less cash) divided by net assets
(excluding goodwill).
Note 2
The comparative financial information has been restated following the adoption of IFRS 16 Leases. See note 30.
2 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
CHAIRMAN’S STATEMENT
Norish plc (AIM: NSH), is pleased to announce its results for the year ended 31 December 2019.
Financial Highlights
• Profit before tax increased by 20% to £2.4m (2018: £2m)
• Diluted adjusted Eps increased by 28% to 6.57p (2018: 5.13p)
• Group revenue decreased by 0.8% to £36.5m (2018: £36.8m)
• Operating margins increased to 7.5% (2018: 6.5%)
• Dividend increased by 5.6% to 1.90 €cent (2018: 1.80 €cent)
• Net debt was reduced from Stg£10.5m at start of year to Stg£9.7m at year end.
•
Interest cover has increased to 7.9 times (2018: 6.1 times)
Diluted adjusted EPS is calculated using profit for the financial year from continuing operations as the measure of
earnings. Comparative financial information has been restated following the adoption of IFRS 16 Leases. (see note
30)
Divisional Highlights
£’m
Cold Stores
Sourcing
2019
2018
15.1
4.7
3.3
13.7
4.1
2.9
%
Growth
10.2%
14.6%
13.8%
2019
2018
20.6
0.5
0.4
22.5
0.7
0.6
%
Growth
(8.4%)
(28.6%)
2019
0.9
0.0
(33.3%)
(0.1)
Dairy
2018
0.5
(0.2)
(0.3)
%
Growth
80%
66.7%
21.9%
21.2%
1.9%
2.7%
(11%)
(60%)
Revenue
EBITDA
Operating
Profit
Operating
Margin
Cold Store division
Cold Stores, which comprise by far our largest business activity saw sales increase by 10.2% or
£1.4m, from £13.7m to £15.1m. This growth in revenue, saw divisional profits grow by 13.8%,
from £2.9m to £3.3m.
The drivers of the growth in revenue, comprise a 6% increase in pallets handled, a 14% increase
in blast frozen throughput, an improved stock turn (from 7.0 weeks to 6.6 weeks) and a slightly
higher occupancy level. Occupancy increased from 94% in 2018, to 95% in 2019.
Power units consumed were higher by 1%, a creditable performance in the context of 14%
growth in blast freezing volumes.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 3
CHAIRMAN’S STATEMENT (CONTINUED)
Sourcing Division
Sales at our sourcing division declined by 8.4% in 2019, compared with the same period in 2018,
from £22.5m to £20.6m. Operating profit declined by a corresponding 33.3%, from £0.6m to
£0.4m, reflecting trading uncertainty and currency fluctuations arising from the ongoing Brexit
process.
The Group’s original investment in the main Sourcing subsidiary, Townview Foods, has been
fully recouped and the structures are in place to continue to develop this business.
Dairy Division
Our investment in dairy, whilst still in the development stage, is progressing well.
Cantwellscourt Farm's operating performance in 2019 was much improved on the prior year.
Milk production was 56% ahead year on year, reflecting underlying improvement across the key
operating metrics; production per cow, pasture grown and herd fertility. In the second half of the
year, we also completed the conversion of the herd to 100% A2-protein - the result of an
intensive program of genetic testing. The cost of conversion has been expensed through the
income statement of the dairy division.
Discontinued
During 2018 the group decided to exit the Juice business for the ready to drinks market. A loss in
the current year of £0.13m was incurred, compared to £0.39m last year.
Outlook
Despite the uncertainty surrounding COVID-19 we remain optimistic for the year ahead.
Notwithstanding disruption in shipments to China year to date, we believe that activity in our
cold store division will return to anticipated levels over the balance of the year. The fundamental
market opportunity of facilitating exports of protein to China remains intact. Within our cold
store business, our investment in robotics in the North West division is starting to deliver results.
Within our sourcing division we have added fish as a protein, and we expect to increase sales and
improve on profitability.
Our subsidiary, Grass to Milk Company, remains on track to launch A2-protein based dairy
products in targeted export markets in the second half of 2020. The business has allocated
resources across technical, regulatory & nutrition workstreams along with investment in-market
in order to successfully execute its commercial strategy. We believe the business is well placed to
add value to our unique A2-protein milk supply.
4 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
CHAIRMAN’S STATEMENT (CONTINUED)
Dividend
The board recommends the payment of a final dividend of 1.90 €cent per share. This will be paid
on 16 October 2020 to those shareholders on the register on the 25 September 2020. It will bring
the total dividend in respect of the financial year to 1.90 €cent per share, against 1.80 €cent per
share last year, an increase of 5.6%.
On behalf of the board, I would like to thank the management team and staff for their commitment
and contribution in 2019.
Ted O’Neill
Chairman
12 March 2020
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 5
FINANCIAL REVIEW
The average cold store occupancy increased from 94% to 95%, pallets received increased 6% and
blast freezing throughput increased 14%. The significant feature of the year was the improvement of
the profitability and returns at our cold stores.
Sales
Total Group revenue decreased by 0.8% to £36.5m (2018: £36.8m). Cold store revenues increased by 10.2%
to £15.1m (2018: £13.7m). Revenues were mainly up on the increase in pallets received and blast freezing
volumes. Revenues in the sourcing division decreased by 8.4% to £20.6m (2018: £22.5m). Townview Foods
mainly accounted for the decreased sales.
Gross profit
Gross profit increased by 8% to £3.44m (2018: £3.20m).
Operating profit
Operating profit increased by 15% to £2.74m (2018: £2.39m).
Finance expense (net)
Finance expense decreased to £0.35m (2018: £0.39m).
Loss from discontinued operations
During 2018 the group decided to exit the Juice business for the ready to drink market. A loss in the
current year of £0.13m was incurred (2018: loss £0.39m).
Earnings per share
The basic adjusted earnings per share increased by 28% to 6.57p (2018: 5.13p).
Capital
During the period we invested £1.73m (2018: £2.74m) in capital assets; £0.58m was invested in robotics at
the North West cold store division and the balance of £1.15m in other capital expenditure for the cold store
division.
Cash Position
Net debt decreased to £9.7m (2018: £10.5m). Cash generated from operations amounted to £3.5m (2018:
£2.8m) and financing activities absorbed £1.8m (2018: £Nil). Investment in assets was made of £2.3m
(2018: £2.9m).
6 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
FINANCIAL REVIEW (CONTINUED)
Dividend
The board recommends the payment of a final dividend of 1.90 €cent per share. This will be paid on 16
October 2020 to those shareholders on the register on the 25 September 2020. It will bring the total dividend
in respect of the financial year to 1.90 €cent per share, against 1.80 €cent per share last year, an increase of
5.6%.
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 purposes 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 there are £2.1m
term loans of which £1.64m are at floating base rate plus a bank margin of 1.85% and £0.19m are at a floating
rate of 3.75% and £0.25m are at Euribor plus a bank margin of 1.85%.
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, 73% of the Group’s term loan borrowings were
due to mature in more than one year. The Group achieves short-term flexibility by means of invoice
finance and overdraft.
Aidan Hughes
Finance Director
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 7
SHAREHOLDERS INFORMATION
Shareholder analysis at 12 March 2020
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
103
86
69
55
313
33
27
22
18
100
44
349
2,376
27,301
30,070
0
1
8
91
100
Share price data (€)
Year ended 31 December 2019
77.0p (€0.65)
56.9p (€0.62)
77.0p (€0.65)
Year ended 31 December 2018
92.7p (€1.06)
48.5p (€0.55)
64.6p (€0.72)
High
Low
31 December
The market capitalisation of Norish plc at 31 December 2019 was £23.1m (€27.2m) compared with £19.4m
(€21.6m) at 31 December 2018, and £25.2m (€28.6m) at 12 March 2020.
Investor relations
Investor enquiries should be addressed to Gerard Murphy, Company Secretary, at:
➢ Norish plc, Northern Industrial Estate, Bury St Edmunds, Suffolk, IP32 6NL
➢ Email: gerard.murphy@norish.com
Registrars
Administrative enquiries relating to the holding of Norish shares should be directed to the Company’s
Registrars whose address is:
➢ Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands,
B63 3DA.
➢ Telephone: +44 (0121) 585 1131
8 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
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
Thursday 21 May 2020 at 11am.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 9
BOARD OF DIRECTORS
Executive Directors
Executive Chairman
Ted O’Neill (68) was appointed to the board and became Chairman in 2003. He is a Chartered Accountant
and an investor and director of private companies, based in Ireland.
Managing Director
Kieran Mahon (54) Kieran was appointed to the Board on 19 August 2015 and joined Norish from Davy,
where he was an equity analyst. Kieran holds a Masters Degree in Business Administration from Dublin
City University.
Finance Director
Aidan Hughes (55) joined Norish as Group Accountant in 1996 and was appointed Finance Director in
September 2006. He is a Chartered Accountant and has previous experience in the travel industry.
Company Secretary
Gerard Murphy (34) is a Chartered Accountant and has been with Norish since the acquisition of
Townview Foods Limited in October 2012. He was appointed Company Secretary in April 2018.
Non-Executive Directors
Torgeir Mantor (63) 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 (72) 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 (73) 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.
10 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
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
13-18 City Quay
Dublin 2
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
Gerard Murphy
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 2019 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 2019.
Principal Activities and Review of Business
Norish plc is a provider of temperature controlled services, protein and product sourcing, and dairy farming
in the United Kingdom and Ireland.
Townview Foods Limited is a protein sourcing 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, which we purchased in October 2012 contributed £410,000 (2018: £522,000).
Turnover fell in 2019 which has impacted the contribution.
The temperature controlled division which comprises the freehold sites at Wrexham, Birmingham, Bury St.
Edmunds Braintree (leasehold), Gillingham (long term leasehold at a peppercorn rent) and East Kent
(leasehold) performed ahead of the same period last year. The number of pallets into our stores increased
by 6%, blast freezing volumes increased by 14% and our average occupancy increased from 94% to 95%.
Details of the Group’s subsidiary undertakings are set out in Note 26 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 1.90 €cent per share. This will be paid on 16
October 2020 to those shareholders on the register on the 25 September 2020. It will bring the total dividend
in respect of the financial year to 1.90 €cent per share, against 1.80 €cent per share last year, an increase of
5.6%.
Post Balance Sheet Events
The directors and the group’s management team are closely monitoring developments during the Covid-
19 crisis and assessing the potential impact they may have on the group’s people, its activities, operations
and financial position. The directors note that this is a dynamic situation and at present there is a high
degree of uncertainty in relation to the wider economic short-to-medium term impact, however are they
satisfied that the group is in a strong financial position to withstand potential future challenges in this
context
12 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
Transactions with Related Parties
Product sales totalling £110,000 (Marketing services 2018: £107,000) were provided to a company where
one of our Directors held a shareholding during the year. As at 31 December 2019 a balance of £39,000
was outstanding ( 2018 : £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 2019 for the Group was 51 days (2018: 41 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% (2018 – 13%) 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.
The directors and the group’s management team are closely monitoring developments during the Covid-19
crisis and assessing the potential impact they may have on the group’s people, its activities, operations and
financial position. The directors note that this is a dynamic situation and at present there is a high degree
of uncertainty in relation to the wider economic short-to-medium term impact, however are they satisfied
that the group is in a strong financial position to withstand potential future challenges in this context.
Key performance indicators
For our cold store operations, the number of pallets into our sites increased by 6% to 358,348, blast freezing
volumes increased by 14% to 135,512 pallets and closing customer stocks at the year end increased
marginally by 1% to 47,501 pallets. Our average electricity price per unit increased by 7% in 2019 and the
number of units consumed increased by 1%.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 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 2019 together with brief biographical notes are set out
on page 10.
In accordance with regulation 90 (a) of the Company’s Constitution, Mr Torgeir Mantor and Mr Willie
McCarter retire by rotation, and being eligible, offer 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
2019 (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
Gerard Murphy
31 December 2019
Ordinary Shares
31 December 2018
Ordinary Shares
3,034,000
1,985,286
267,500
12,600
-
1,000,333
-
3,020,000
1,985,286
317,500
12,600
-
1,000,333
-
* Torgeir Mantor is a director of T. B. Mantor AS, which also holds 1,243,027 (2018: 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 (2018: 24,152).
Neither the directors or the secretary had any other interests in either shares or share options of the company.
14 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
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.
Substantial shareholdings
At 12 March 2020 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
T.B. Mantor AS
Tom Cunningham
Seán Savage
Number of shares
5,102,237
Percentage held
16.97
3,034,000
1,985,286
1,364,465
1,243,027
1,049,497
1,000,333
10.09
6.60
4.54
4.13
3.49
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 156,000 options have been exercised and 1,096,237 options have expired. At 31 December 2019
there were no options outstanding.
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.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 15
DIRECTORS’ REPORT (CONTINUED)
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 current and prior 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. During 2019 we engaged a new energy supplier who allocated 100% renewable energy we
consumed at the cold store division.
Country of Incorporation
Norish plc was incorporated and is domiciled in the Republic of Ireland under company number 51842.
Significant Customers
During 2019, £4.5m or 12% (2018: £4.8m or 13%) of the Group’s revenues from continued operations
depended on a single customer in the cold store segment (2018: sourcing segment).
16 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
Corporate governance
The Directors recognise the importance of good corporate governance and have chosen to apply the Quoted
Companies Alliance Governance Code (the QCA Code). The QCA Code was developed by the QCA in
consultation with a number of significant institutional small company investors, as an alternative corporate
governance code, applicable to AIM companies. The underlying principle of the QCA code is that “the
purpose of good corporate governance is to ensure that the Group is managed in an efficient, effective and
entrepreneurial manner, for the benefit of all shareholders, over the longer term”.
Below we describe the principles of the QCA code and how the Group has complied with it.
Establish a strategy and a business mode, which promotes long term value for shareholders
Application (as set out by QCA)
The Board must be able to express a shared view of the Group’s purpose, business model and strategy. It
should go beyond the simple description of products and corporate structures and set out how the Group
intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of
long term growth is underpinned by a clear set of values aimed at protecting the Group from unnecessary
risk and securing its long term future.
What we do and why
Norish’s strategy is to grow each of its three business units by adopting specific strategies for each unit
individually. We prefer to pursue organic growth and maintain a strong balance sheet, as measured by debt
to EBITDA and interest cover multiples. We focus on improving returns on capital and generating cash,
which ultimately drives a virtuous cycle of earnings per share growth. The adjusted Earnings per share has
grown by 28% from 5.13p to 6.57p in 2019.
Seek to understand and meet shareholders needs and expectations
Application (as set out by QCA)
Directors must develop a good understanding of the needs and expectations of all elements of the Group’s
shareholder base. The Board must manage shareholders’ expectations and should seek to understand the
motivations behind shareholder voting decisions.
What we do and why
Management responds promptly to shareholder requests for meetings. The Chairman liaises with the
Group’s major shareholders and ensures their views are fully communicated to the Board. The AGM
provides a forum to meet private shareholders. The Directors make themselves available to listen to the
views of shareholders informally, following the AGM.
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.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 17
DIRECTORS’ REPORT (CONTINUED)
Take into account wider stakeholder and social responsibilities and their implications for long term
success
Application (as set out by QCA)
Long term success relies upon good relations with a range of different stakeholder groups, both internal
(workforce) and external (suppliers, customers, regulators and others). The Board needs to identify the
Group’s stakeholders and understand their needs, interests and expectations.
Where matters that relate to the Group’s impact on society, the communities within which it operates or the
environment have the potential to affect the Group’s ability to deliver shareholder value over the medium
to long-term, then those matters must be integrated into the Group’s strategy and business model.
Feedback is an essential part of all control mechanisms. Systems need to be put in place to solicit, consider
and act on feedback from all stakeholder groups.
What we do and why
The Board of Norish plc visits its operating sites where relevant local management present on all aspects of
the business; customers, employees, suppliers, regulators and others. The Board is acutely aware of the
impact any business can have on the environment and actively looks to reduce such impacts.
For more information, please see our Environmental Policies section on page 16.
Embed effective risk management, considering both opportunities and threats, throughout the
organisation
Application (as set out by QCA)
The Board needs to ensure that the Group’s risk management framework identifies and addresses all
relevant risks in order to execute and deliver strategy; companies need to consider their extended business;
including the Group’s supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified risks that the Group is able to
bear and willing to take (risk tolerance and risk appetite).
What we do and why
Management considers risk to the business including operational and financial risk on an ongoing basis.
The Board considers risk to the business at every Board meeting. The Group formally reviews and
documents the principal risks to the business, at least annually. Risk management on page 13 details risks
to the business and how these are mitigated. Financial risk factors are covered on page 7.
18 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
Maintain the Board as a well-functioning, balanced team, led by the Chair
Application (as set out by QCA)
The Board members have a collective responsibility and legal obligation to promote the interests of the
Group and are collectively responsible for defining corporate governance arrangements. Ultimate
responsibility for the quality of, and approach to, corporate governance lies with the chair of the Board.
The Board (and any committees) should be provided with high quality information in a timely manner to
facilitate proper assessment of the matters requiring decision or insight.
The Board should have an appropriate balance between executive and non-executive directors and should
have at least two independent non-executive directors. Independence is a Board judgment.
The Board should be supported by committees (e.g. audit, remuneration, nomination) that have the
necessary skills and knowledge to discharge their duties and responsibilities effectively.
What we do and why
The Group is controlled by its Board of Directors. Ted O’Neill, Executive Chairman, is responsible for the
running of the Board.
All Directors receive regular and timely information about the Group’s financial and operational
performance. Relevant information is circulated to the Directors in advance of Board meetings.
The Board comprises three Executive Directors, three non- Executive Directors, together with the Company
Secretary.
The Board considers that all non- Executive Directors bring an independent judgment to meetings,
notwithstanding varying durations of service.
Ensure that between all, the Directors have the necessary up to date experience, skills and capabilities
Application (as set out by QCA)
The Board must have an appropriate balance of sector, financial and public markets skills and experience,
as well as an appropriate balance of personal qualities and capabilities. The Board should understand and
challenge its own diversity, including gender balance, as part of its composition.
The Board should not be dominated by one person or group of people. Strong personal bonds can be
important but can also divide a board.
As companies evolve, the mix of skills and experience required on the Board will change and the Board
composition will need to evolve to reflect this change.
What we do and why
The Company Secretary supports the Executive Chairman, in addressing the ongoing training needs of
Directors.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 19
DIRECTORS’ REPORT (CONTINUED)
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Application (as set out by QCA)
The Board should regularly review the effectiveness of its performance as a unit, as well as that of its
committees and the individual directors.
The Board performance review may be carried out internally or, ideally, externally facilitated from time to
time. The review should identify development or mentoring needs of individual directors or the wider senior
management team.
It is healthy for membership of the Board to be periodically refreshed. Succession planning is a vital task
for boards. No member of the Board should become indispensable.
What we do and why
A number of the Board members and Company Secretary have undergone personal development training
in recent years, this is on-going.
Promote a corporate culture that is based on ethical values and behaviours
Application (as set out by QCA)
The Board should embody and promote a corporate culture that is based on sound ethical values and
behaviours and use it as an asset and a source of competitive advantage.
The policy set by the Board should be visible in the actions and decisions of the chief executive and the rest
of the management team. Corporate values should guide the objectives and strategy of the Group.
The Board should embody and promote a corporate culture that is based on sound ethical values and
behaviours and use it as an asset and a source of competitive advantage.
The policy set by the Board should be visible in the actions and decisions of the chief executive and the rest
of the management team. Corporate values should guide the objectives and strategy of the Group.
The culture should be visible in every aspect of the business, including recruitment, nominations, training
and engagement. The performance and reward system should endorse the desired ethical behaviours across
all levels of the Group.
The corporate culture should be recognisable throughout the disclosures in the annual report, website and
any other statement issued by the Group.
What we do and why
Our values guide us in our daily commercial lives. We work hard to make a satisfactory return for our
shareholders, while taking cognisance of all other stakeholders in the process. We do this by challenging
ourselves in everything we do, holding ourselves to account. This requires a very open, transparent
organisation where nobody is afraid to engage to the highest levels in the organisation. This empowers all
of our employees to put forward their opinions, grow with the organisation and ultimately make it a
bottom up ideas business. We are very mindful of family and in that regard the Group is committed to
maintaining its efforts in the area of energy conservation. During 2019 we engaged a new energy supplier
who provides us with 100% renewable energy at the cold store division.
20 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
Maintain governance structures and processes that are fit for purpose and support good decision-making
by the Board
Application (as set out by QCA)
The Group should maintain governance structures and processes in line with its corporate culture and
appropriate to its:
•
•
size and complexity; and
capacity, appetite and tolerance for risk.
The governance structures should evolve over time in parallel with its objectives, strategy and business
model to reflect the development of the Group.
What we do and why
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
Group’s shares. Torgeir Mantor has also served on the Board for more than 10 years, 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 judgment.
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.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 21
DIRECTORS’ REPORT (CONTINUED)
The directors attended Board meetings and committees of the Board as set out below:
Meetings held
Meetings Attended:
Ted O’Neill
Kieran Mahon
Aidan Hughes
Torgeir Mantor
Willie McCarter
Seán Savage
Gerard Murphy – company secretary
Board
Remuneration Audit
4
3
4
4
4
4
3
4
1
1
N/A
N/A
N/A
1
1
1
N/A
N/A
N/A
1
1
1
N/A
N/A
The nomination committee meets as required. There were no meeting during the year.
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.
22 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders
Application (as set out by QCA)
A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to
enable all interested parties to come to informed decisions about the Group.
In particular, appropriate communication and reporting structures should exist between the Board and all
constituent parts of its shareholder base. This will assist with:
•
•
the communication of shareholders’ views to the Board; and
the shareholders’ understanding of the unique circumstances and constraints faced by the Group.
It should be clear where these communication practices are described (annual report or website).
What we do and why
Norish plc encourages two-way communication with both its private and institutional shareholders and
responds promptly for meeting requests.
Management try and proactively meet shareholders after both interim and full year results publication or at
any period in between, which is not in a close period.
The Chairman speaks with our major shareholders and ensures their views are communicated fully to the
Board.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 23
DIRECTORS’ REPORT (CONTINUED)
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 Group’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 Groups’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 £1.7m along with cash reserves of £1.1m.
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
Despite the uncertainty surrounding COVID-19 we remain optimistic for the year ahead.
Notwithstanding disruption in shipments to China year to date, we believe that activity in our cold store
division will return to anticipated levels over the balance of the year. The fundamental market opportunity
of facilitating exports of protein to China remains intact. Within our cold store business, our investment in
robotics in the North West division is starting to deliver results.
Within our sourcing division we have added fish as a protein, and we expect to increase sales and improve
on profitability.
Our subsidiary, Grass to Milk Company, remains on track to launch A2-protein based dairy products in
targeted export markets in the second half of 2020. The business has allocated resources across technical,
regulatory & nutrition workstreams along with investment in-market in order to successfully execute its
commercial strategy. We believe the business is well placed to add value to our unique A2-protein milk
supply.
24 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
DIRECTORS’ REPORT (CONTINUED)
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.
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
12 March 2020
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 25
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 and Company 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.V Hughes
Finance Director
12 March 2020
26 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF NORISH PLC
Opinion
We have audited the financial statements of Norish Plc for the financial year ended 31 December 2019
which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company
Statements of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated and
Company Statement of Changes in Equity and the related notes, including the summary of significant
accounting policies.
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.
In our opinion, Norish Plc’s financial statements:
• give a true and fair view in accordance with IFRS as adopted by the European Union of the
financial position of the Group and of the Company as at 31 December 2019 and of the Group
financial performance and cash flows for the financial year then ended; and
• have been properly prepared in accordance with the requirements of the Companies Act 2014.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (‘ISAs
(Ireland)’) and applicable law. Our responsibilities under those standards are further described in the
‘Responsibilities of the auditor for the audit of the financial statements’ section of our report. We are
independent of the Group and Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in Ireland, namely the Irish Auditing and Accounting Supervisory
Authority (IAASA) Ethical Standard concerning the integrity, objectivity and independence of the auditor,
and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be
appropriate in the circumstances for the entity. We have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (Ireland) require
us to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties
that may cast significant doubt about the Group’s or the parent Company’s ability to continue to
adopt the going concern basis of accounting for a period of at least twelve months from the date
when the financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in the audit, and the directing of efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and therefore we do not provide a separate opinion on these
matters.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 27
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF NORISH PLC (CONTINUED)
Overall audit strategy
We designed our audit by determining materiality and assessing the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for
example the valuation of the intangible assets. We also addressed the risk of management override of
internal controls, including evaluating whether there was any evidence of potential bias that could result in
a risk of material misstatement due to fraud.
How we tailored the audit scope
The Group has three operating segments that are operated principally in the United Kingdom, with
operations in the Republic of Ireland since 2014. We tailored the scope of our audit taking into account
the areas where the risk of misstatement was considered material to the Group, such as: the carrying value
of intangible assets and the existence and impairment of trade receivables.
In establishing the overall approach to our audit we assessed the risk of material misstatement at a Group
level, taking into account the nature, likelihood and potential magnitude of any misstatement. As part of
our risk assessment, we considered the control environment in place at Norish plc.
Materiality and audit approach
The scope of our audit is influenced by our application of materiality. We set certain quantitative
thresholds for materiality. These, together with qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the Group as follows: 1% of Revenue
for the financial year ended 31 December 2019.
We agreed with the board of directors that we would report to them misstatements identified during our
audit above 5% of materiality as well as misstatements below that amount that, in our view, warranted
reporting for qualitative reasons.
Significant risks identified
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our
resources and effort, are set out below as significant risks together with an explanation of how we tailored
our audit to address these specific areas in order to provide an opinion on the financial statements as a
whole. This is not a complete list of all risks identified by our audit.
a. Accounting for capitalised development costs (see note 11)
Capitalised development costs of £564,000 are deemed significant to our audit, given the significance of
the position per December 31, 2019, the technological developments in the industry, as well as the
specific criteria that have to be met for capitalisation. This involves management judgment, such as with
respect to technical feasibility, intention and ability to complete the intangible asset, ability to use or sell
the asset, generation of future economic benefits and the ability to measure the costs reliably. In addition,
determining whether there is any indication of impairment of the carrying value of assets, requires
management judgement and assumptions which are affected by future market or economic developments.
28 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF NORISH PLC (CONTINUED)
Significant risks identified (continued)
We have performed audit procedures over the accuracy and valuations of amounts recognised. Our audit
procedures, included, among other things, assessing the recognition criteria for intangible assets,
challenging the key assumptions used or estimates made in capitalising development costs, including the
authorisation of the stage of the project in the development phase and the accuracy of costs included and
assessing the useful economic life attributed to the asset. In addition, we considered whether any indicators
of impairment were present by understanding the business rationale for this project and performing reviews
for indicators of impairment. We also assessed the adequacy of the company’s disclosure in Note 11, Other
intangible assets.
b. Existence and impairment of trade receivables (See Note 14)
Given the significance of the net trade receivables balance, £5,930,000, as of 31 December 2019, it is
material to the financial statements. We have considered the risk of impairment of the trade receivable
balances and have reviewed management’s assessment of the impairment of the trade receivables balance
in addition to performance of substantive procedures over existence and recoverability of the trade
receivables.
Our audit approach involved the use of sampling to select a sample of trade receivable balances for testing
to determine existence and recoverability by verification to relevant post year end cash receipts.
Furthermore, we reviewed trade receivables outside normal credit terms to assess likelihood of
recoverability in conjunction with management’s impairment provision. Based on our testing, we did not
identify any issues with the recoverability of trade receivables.
Other information
Other information comprises information included in the Annual Report, other than the financial
statements and our auditor’s report thereon, including the Directors’ Report. The directors are responsible
for the other information. Our opinion on the financial statements do not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies in the financial statements, we are required to determine whether
there is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 29
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF NORISH PLC (CONTINUED)
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 Group and the Company were sufficient to permit the
financial statements to be readily and properly audited.
• The financial statements are in agreement with the accounting records.
•
In our opinion the information given in the directors’ report is consistent with the financial
statements. Based solely on the work undertaken in the course of our audit, in our opinion, the
directors’ report has been prepared in accordance with the requirements of the Companies Act 2014.
Matters on which we are required to report by exception
Based on our knowledge and understanding of the Company and its environment obtained in the course of
the audit, we have not identified material misstatements in the Directors’ report.
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of
directors’ remuneration and transactions specified by sections 305 to 312 of the Act have not been made.
We have no exceptions to report arising from this responsibility.
Responsibilities of management and those charged with governance for the financial statements
As explained more fully in the Directors’ responsibilities statement, management is responsible for the
preparation of the financial statements which give a true and fair view in accordance with International
Financial Reporting Standards as adopted by the European Union, and for such internal control as they
determine necessary to enable the preparation of financial statements are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group and the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Group and the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group and the Company’s financial
reporting process.
Responsibilities of the auditor for the audit of the financial statements
The auditor’s objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
30 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF NORISH PLC (CONTINUED)
Responsibilities of the auditor for the audit of the financial statements (continued)
As part of an audit in accordance with ISAs (Ireland), the auditor will exercise professional judgment and
maintain professional scepticism throughout the audit. The auditor will also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for their opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group and the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group and the Company’s ability to continue
as a going concern. If they conclude that a material uncertainty exists, they are required to draw
attention in the auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify their opinion. Their conclusions are based on the audit
evidence obtained up to the date of the auditor’s report. However, future events or conditions may
cause the Group and the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a matter that achieves a true and fair view.
The auditor shall communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that may be identified during the audit.
Where the auditor is reporting on the audit of a group, the auditor’s responsibilities are to obtain sufficient
appropriate audit evidence regarding the financial information of the entities or business activities within
the group to express an opinion on the group financial statements. The auditor is responsible for the
direction, supervision and performance of the audit, and the auditor remains solely responsible for the
auditor’s opinion.
The auditor also provides those charged with governance with a statement that they have complied with
relevant ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on their independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, the auditor determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. These matters are described in the auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, the auditor
determines that a matter should not be communicated in the report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 31
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF NORISH PLC (CONTINUED)
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Group and 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
Group and 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 Group and the Company and the Group and the Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
JASON CRAWFORD
For and on behalf of
Grant Thornton
Chartered Accountants
Statutory Audit Firm
Dublin 2
12 March 2020
32 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2019
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Operating profit from continuing operations
Finance income – interest receivable
Finance expenses – lease interest
Finance expenses – interest on bank loans
Profit on continuing activities before taxation
Income taxes – Corporation tax
Income taxes – Deferred tax
Notes
5
7
7
7
8
9
9
Profit for the financial year from continuing
operations
Loss from discontinued operations
27
Profit for the financial year attributable to
owners of the parent
Other comprehensive income
Total comprehensive income for the year
attributable to owners of the parent
2019
£’000
2018
£’000
(Restated – see
note 30)
36,500
(33,060)
36,802
(33,601)
3,440
3,201
107
(811)
2,736
1
(229)
(120)
43
(851)
2,393
3
(209)
(187)
2,388
2,000
(247)
(165)
(393)
(63)
1,976
1,544
(135)
(379)
1,841
1,165
-
1,841
-
1,165
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 33
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2019(continued)
Notes
2019
2018
Earnings per share expressed in pence per share:
From continuing operations
- basic
- diluted
From discontinued operations
- basic
- diluted
10
10
6.57p
6.57p
5.13p
5.13p
(0.45)p
(0.45)p
(1.26)p
(1.26)p
34 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2019
Notes
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 parent
Share capital
Share premium account
Other reserves
Treasury shares
Retained earnings
TOTAL EQUITY
Non-current liabilities
Borrowings
Deferred tax
Current liabilities
Trade and other payables
Current tax liabilities
Borrowings
Liabilities of disposal group classified as held for sale
11
11
12
13
14
15
22
27
20
20
21
18
19
16
17
18
27
2019
£’000
2018
£’000
(Restated – see
note 30
2,338
564
22,777
824
26,503
6,857
1,105
1,054
277
9,293
2,338
166
22,857
639
26,000
6,250
624
1,543
324
8,741
35,796
34,741
5,640
7,321
(21)
-
4,313
17,253
5,935
1,002
6,937
6,564
231
4,811
-
11,606
5,640
7,321
103
(563)
3,484
15,985
6,654
839
7,493
5,446
390
5,412
15
11,263
TOTAL EQUITY AND LIABILITIES
35,796
34,741
The notes on page 38 to 80 are an integral part of these consolidated financial statements.
Approved on behalf of the board on 12 March 2020 by:
T.J. O’Neill
Chairman
A. Hughes
Finance Director
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 December 2019
Share
Other
Treasury Retained
Share
capital
£'000
premium
£'000
Reserves
£'000
shares Earnings
£'000
£’000
(Restated)
3,516
(563)
At 1 January 2018
IFRS 16 adjustments(note 30)
At 1 January 2018 – Restated
Net profit for the financial year
Total comprehensive income for the
financial year – Restated
Issue of share capital
Equity dividends paid
Transactions with owners
At 31 December 2018
Net profit for the financial year
Total comprehensive income for the
financial year
Transfer of treasury shares
Equity dividends paid
Foreign exchange gain
Transactions with owners
5,616
7,281
-
5,616
-
-
7,281
-
-
24
-
24
-
40
-
40
103
-
103
-
-
-
-
-
-
(563)
-
-
-
-
-
5,640
7,321
103
(563)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(124)
-
-
563
-
-
Total
£'000
15,953
(783)
15,170
1,165
(783)
2,733
1,165
1,165
1,165
-
64
(413)
(413)
(413)
3,484
(349)
15,985
1,841
1,841
1,841
(563)
(450)
-
1,841
-
(450)
(124)
(124)
563
(1,013)
(574)
At 31 December 2019
5,640
7,321
(21)
-
4,313
17,253
36 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
CONSOLIDATED CASH FLOW STATEMENT
for the financial year ended 31 December 2019
Notes
Profit on continuing activities before taxation
Gain on biological assets
Amortisation of intangible assets
Foreign exchange loss/(gain)
Loss on discontinued activities
Finance expenses
Finance income
Depreciation – property, plant and equipment-net
Net cashflows from operating activities
Changes in working capital and provisions:
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Decrease/(increase) in current assets held for sale
Decrease in current liabilities held for sale
Increase/(decrease) increase in payables
Cash generated from operations
Interest paid
Interest received
Taxation paid
Net cash generated from operating activities
Investing activities
Investment in intangible assets
Purchase of property, plant and equipment
Sale of biological assets
Purchase of biological assets
Net cash used in investing activities
Financing
Dividends paid to shareholders
Deferred consideration payments
Share issue proceeds
Invoice finance receipts
Overdraft repayment
Finance lease capital repayments
Term loan advance
Finance lease advance
Term loan repayments
Net cash (outflow)/inflow from financing activities
23
2019
£’000
2018
£’000
(restated –
see note 30)
2,388
(107)
-
97
(135)
349
(1)
1,649
4,240
(481)
(607)
47
(15)
1,118
4,302
(349)
1
(406)
3,548
(419)
(1,734)
209
(324)
(2,268)
(449)
-
-
(502)
-
(979)
300
271
(410)
(1,769)
2,000
(43)
141
(23)
(379)
396
(3)
1,396
3,485
85
1,287
(45)
(3)
(1,234)
3,575
(396)
3
(370)
2,812
(166)
(2,744)
68
(35)
(2,877)
(413)
(29)
64
551
(210)
(861)
2,200
1,657
(2,909)
50
Net decrease in cash and cash equivalents
Cash and cash equivalents beginning of period
(489)
(15)
1,543
1,558
Cash and cash equivalents end of period
22
1,054
1,543
The notes on page 38 to 80 are an integral part of these consolidated financial statements.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 37
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, dairy farming and other related services to
the food industry in the United Kingdom and Republic of Ireland.
The Group is listed on the Alternative Investments Market (“AIM”) of the London Stock Exchange
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. Norish
plc is registered in Republic of Ireland under registration number 51842.
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 the statement of comprehensive income.
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(see note 4).
The financial statements are presented in Pounds Sterling which is both the Group’s and
Company’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 £1.7m along with cash reserves of
£1.1m. 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.
38 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Changes in accounting policies
The Group has adopted the following new standards, interpretations, revisions 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 2019:
IFRS 16 Leases
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 the impact of the adoption of IFRS 16 is set out in note 30.
Other interpretations, revisions 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
2019 and which management do not consider to have a material impact upon the Group are as
follows:
IFRIC 23 Uncertainty over income tax treatments
•
• Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments
to IFRS 4)
• Prepayment Features with Negative Compensation (Amendments to IFRS 9)
• Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)
• Annual Improvements to IFRS Standards 2015–2017 Cycle
• Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)
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. Currently, there are no new standards, amendments and interpretations
that are expected to be relevant to the Group’s consolidated financial statements.
Certain standards, interpretations and amendments have been issued but Management do not
consider that they have a material impact on the Group’s consolidated financial statements. These
are:
IFRS 17 Insurance Contracts (effective from 1 January 2021)
•
• Amendments to References to the Conceptual Framework in IFRS Standards (effective
from 1 January 2020)
• Amendments to IFRS 3: Definition of a Business (effective from 1 January 2020 – yet to
be endorsed by the EU)
• Amendments to IAS 1 and IAS 8: Definition of Material (effective from 1 January 2020)
•
Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and IFRS 7 (effective
from, 1 January 2020 – yet to be endorsed by the EU)
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 39
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. As of 31 December 2019, all subsidiary undertakings have a reporting
date of 31 December.
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 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.
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. Goodwill on 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.
40 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
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 the
statement of comprehensive income 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 property
Plant and machinery
Fixtures and fittings
Equipment
50-55 years
10 years
10 years
5-20 years
Freehold land is not depreciated. Gains or losses arising on disposal of property, plant and
equipment are recognised in the statement of comprehensive income.
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 2019 41
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Revenue recognition
Revenue is only recognised when certain criteria are met.
Firstly, a contract must exist. A contract exists when: it has been approved and the parties are
committed to performing their respective obligations; each party’s rights can be identified;
payment terms can be identified; the contact has commercial substance; and it is probable that
consideration will be collected in respect of goods and services transferred to the customer.
Secondly, the Group must be able to identify the performance obligations within the contract. A
performance obligation is a promise to transfer either a distinct good or service or a series of
distinct goods or services. At contract inception, the Group assesses the goods or services promised
to a customer and identifies each promise to transfer as either: a good or service that is distinct; or
a series of distinct goods and services that are substantially the same and have the same pattern of
delivery to the customer.
Thirdly, it is necessary to determine the transaction price. This involves an assessment of whether
or not the revenue might be variable, contain a significant financing component, include non-cash
consideration or involve payments back to the customer.
Fourthly, it is necessary to allocate the transaction price. The transaction price is allocated to each
separate performance obligation based on their relative standalone selling prices. Discounts are
typically allocated to all performance obligations in an arrangement based on their relative
standalone selling prices. i.e. so that discount is allocated proportionately across all performance
obligations.
Revenue is then recognised when or as performance obligations are satisfied by transferring control
of the promised goods or services to the customer.
Revenue, which arises principally from storage and handling income and the sale of goods,
represents net sales to customers outside the Group, and excludes discounts and Value Added Tax.
Income from sub-letting of warehouses is also included in revenue and it recognised on a time
apportioned basis.
Handling revenue relates to the receipt and eventual delivery of goods. The portion that relates to
receipt is recognised on invoice which coincides with the receipt into store. Similarly, the portion
that relates to 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 customer obtains control
over the goods.
Revenue from all other activities is recognised in the periods in which the services are provided.
42 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Financial assets/liabilities and available for sale assets
The Group classifies its financial assets/liabilities in the following categories: at fair value through
the statement of comprehensive income, 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 the Statement of Comprehensive Income
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 interest rate swaps and caps. Gains and losses arising from
changes in fair value are recognised in the statement of comprehensive income 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 statement of
comprehensive income. All recognised gains or losses resulting from the option to purchase
refrigerant gas are recorded in Other Income in the statement of comprehensive income.
Contingent consideration has been classified as a financial liability at fair value through the
statement of comprehensive income. All gains and losses resulting from changes in the fair
value of contingent consideration are recognised in Other Income in the statement of
comprehensive income. 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.
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 allowance for lifetime expected credit loss. Trade receivables are first assessed
individually for credit loss, or collectively where the receivables are not individually significant.
Where there is no objective evidence of credit loss for an individual receivable, it is included in a
group of receivables with similar credit risk characteristics and these are collectively assessed for
credit loss. Movements in the allowance for lifetime expected credit loss of trade receivables are
recorded in the statement of comprehensive income.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 43
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
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.
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
statement of comprehensive income, 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.
Discontinued operations
Where a component of the Group is classified as a discontinued operation, that component is stated
at the lower if its carrying amount and fair value less cost to sell. The post-tax profit or loss or the
component, together with any post-tax gain or loss in relation to remeasuring the carrying amount of
the component, are recognised is a single line item in the Statement of Comprehensive Income.
Assets and liabilities relating to the component are presented separately in the Statement of Financial
Position.
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 statement of
comprehensive income. 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.
44 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Foreign currencies(continued)
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
The Group enters into contracts as a lessee. A lease being a contract, or part thereof, that conveys
the right to control the use of an identified asset for a period of time in exchange for consideration.
At the inception of a contract the Group makes an assessment whether the contract is either a lease
or contains a lease. To assess whether a contract conveys the right to control the use of an identified
asset, the Group assesses whether:
•
•
•
the contract involves the use of an identified asset;
the Group has the right to obtain substantially all of the economic benefits from the use of
the asset throughout the period of use; and
the Group has the right to direct the use of the asset.
At inception, or on reassessment of a contract that contains a lease component, the Group allocates
the consideration in the contract to each lease component on the basis of their relative standalone
prices.
At the lease commencement date, the Group recognises a right-of-use lease liability. The right-of-
use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site of which it is located, less any lease incentives received.
The right-to-use asset is subsequently depreciated over the earlier of its useful economic life or the
lease terms in accordance with the Group’s accounting policies from property, plant and
equipment. The value of the right-of-use asset may be reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounting using the interest rate implicit in the lease, or if that rate
cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise
both fixed and variable payments together with any residual guarantees and purchase options where
it is reasonably certain that the Group will exercise the purchase option.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 45
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Leased assets (continued)
The lease liability is measured at amortised cost using the effective interest method. It is
remeasured when there is a change in the future lease payments arising from a change in an index
or rate, if there is a change in the Group’s estimate of the amount expected to payable under a
residual value guarantee or if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option. When the lease liability is remeasured a corresponding
adjustment is made to the carrying amount of the right-of-use asset or it is recorded in profit or loss
if the carrying amount of the right-of-use asset is zero.
Right-of-use assets are presented within property, plant and equipment. Lease liabilities are
presented within borrowings.
The Group has elected not to recognise right-of-use assets and lease liabilities for short term leases
which have a lease term of less than 12 months or low-value assets. Lease payments in respect of
such leases are recognised on straight-line basis over the lease term.
On transition to IFRS 16, the Group has elected to apply the practical expedient to grandfather the
assessment of which transactions are leases. The Group has applied the IFRS 16 lease definition
to contracts entered into or changed on or after 1 January 2019.
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 statement of comprehensive income, 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.
46 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
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 from time to time. In
accordance with IFRS 2, “Share-based payments”, equity-settled share-based payments are
measured at fair value at the date of grant by reference to the fair value of the equity instrument
granted. Fair value is measured by use of the Black-Scholes pricing model, as approriate. 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. Estimates are subsequently revised if there is any indication that the
number of share options expected to vest differs from previous estimates.
The share-based payments charge is allocated to administrative expenses on the basis of headcount.
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.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 47
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
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 its fair value less estimated point of sale costs at the point of harvest. Movements in
fair value less estimated point of sale cost are recognised in the Consolidated Statement of
Comprehensive Income.
Intangible assets
The Group recognises internally generated intangible assets to the extent that they are both
identifiable and can be measured reliably. Recognition only occurs when the Group is satisfied that
the project is feasible such that the asset will be available for use or sale; that the Group has the
intention to complete the intangible asset and either use or sell it; that the Group 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 Group has available sufficient resources to complete the
development of the intangible asset.
Intangible assets are written off in equal annual instalments over their useful economic life when
the product is fully developed and ready for market. Amortisation is included within administrative
expenses.
48 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
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 cash flow 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 2019 and 2018, 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 2019, if interest rates had been 1% higher with all other variables held
constant, post tax profit for the year would have been £40,000 lower, mainly as a result of
higher interest expenses on floating rate borrowings.
At 31 December 2018, if interest rates had been 1% higher with all other variables held
constant, post tax profit for the year would have been £49,000 lower, mainly as a result of
higher interest expenses on floating rate borrowings.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 49
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3.1 Financial risk factors(continued)
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 2019:
Within
1 year
£’000
4,342
3,485
756
49
570
1 to 2
years
£’000
-
-
648
39
371
2 to 5
years
£’000
-
-
2,252
59
1,069
Greater
than 5 years
£’000
-
-
1,521
-
74
Total
£’000
4,342
3,485
5,177
147
2,084
Trade payables
Invoice finance
Lease liabilities
Term loan interest
Bank loans
9,202
1,058
3,380
1,595
15,235
50 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3.1 Financial risk factors(continued)
At 31 December 2018 (restated – see note 30):
Within
1 year
£’000
1 to 2
years
£’000
Trade payables
Invoice finance
Leases liabilities
Term loan interest
Bank loans
3,551
3,988
894
55
530
9,018
-
-
646
46
302
994
2 to 5
years
£’000
-
-
2,276
90
955
3,321
Greater
than 5 years
£’000
-
-
2,068
8
407
Total
£’000
3,551
3,988
5,884
199
2,194
2,483
15,816
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 £17.3m up from £15.8m last year (restated – see note 30). In 2019, we
decreased the Gearing ratio from 77% to 65%.
The Group’s strategy is to reduce the net borrowings as soon as possible.
The gearing ratios at 31 December 2019 and 2018 were as follows:
Total borrowings
Less cash and cash equivalents
Net borrowings
Net assets
Less goodwill
Capital employed
Gearing ratio
2019
£’000
10,746
(1,054)
9,692
17,253
(2,338)
14,915
2018
£’000
(restated
– see
note 30)
12,066
(1,543)
10,523
15,985
(2,338)
13,647
65%
77%
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 51
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3.3 Fair value estimation
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.
Biological assets comprise of a herd of heifers, that are used for milk production, and bulls to
impregnate the heifers. They are valued at net realisable value less cost to sell.
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.
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.
Amortisation is charged so as to allocate the cost of other intangible assets over their estimated
useful economic lives, using the straight-line method. The estimated useful economic life has been
estimated as 5 years. Amortisation commences when the intangible asset is available for use.
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 2 years,
which if this does not materialise then it will have an impact on the deferred tax calculation in
future years.
The Group values its biological assets at fair value less estimated point of sale costs.
52 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5
Segmental information
During 2018, the Group discontinued the Juice Business for the ready to drink market (see note
27). 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 £3.5m (2018: £4.0m) with fixed assets of £1.9m (2018: £2.1m –
restated. See note 30). During 2016, the Group commenced a dairy farm in the Republic of Ireland
and during 2018 it established Grass to Milk which is developing A2 protein products.
Segment information can be analysed as follows for the reporting periods under review:
• Product Sourcing business
• Temperature controlled
• Dairy farming
During 2019, £4.5m or 12% (2018: £4.8m or 13.0%) of the Group’s revenues from continued
operations depended on a single customer in the temperature controlled business (2018: product
sourcing business).
The segment results from continuing operations for the year ended 31 December 2019 are:
£’000
Dairy ProductTemperature
Farming Sourcing Controlled
£’000
£’000
Total segment revenue 892
20,556
15,052
Revenue 892
20,556
15,052
Unallocated Total
£’000
£’000
-
-
36,500
36,500
Operating profit/(loss) (147) 442
3,252
(811)
2,736
Finance income –
interest receivable -
Finance cost –
Interest paid (36)
-
1
(31)
(282)
-
-
1
(349)
Profit/(loss) before income tax (183)
411
2,971
(811)
2,388
Income tax – corporation tax -
Income tax – deferred tax (18)
(50)
-
(167)
(147)
(30)
-
(247)
(165)
Profit/(loss) for the year (201)
361
2,657
(841)
1,976
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 53
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5
Segmental information (continued)
Other segment items:
£’000
Dairy ProductTemperature
Farming Sourcing Controlled
£’000
£’000
Unallocated Total
£’000
£’000
Depreciation 165
60
– continuing operations
(Note 12)
1,424
-
1,649
The segment results which have been restated following the adoption of IFRS 16 (see note 30), for
the year ended 31 December 2018 are:
Restated – see note 30
£’000
Dairy ProductTemperature
Farming Sourcing Controlled
£’000
£’000
Total segment revenue 527
22,540
13,735
Revenue 527 22,540
13,735
Unallocated Total
£’000
£’000
-
-
36,802
36,802
Operating profit/(loss) (338) 647
2,935
(851)
2,393
Finance income –
interest receivable -
Finance cost –
Interest paid (36)
-
3
(47)
(313)
-
-
3
(396)
Profit/(loss) before income tax (374)
600
2,625
(851)
2,000
Income tax – corporation tax 1
Income tax – deferred tax (31)
(76)
-
(318)
(32)
-
-
(393)
(63)
Profit/(loss) for the year (404)
524
2,275
(851)
1,544
Other segment items:
£’000
Dairy ProductTemperature
Farming Sourcing Controlled
£’000
£’000
Unallocated Total
£’000
£’000
Depreciation 159
60
– continuing operations
(Note 12)
54 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
1,396
1,177
-
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5
Segmental information (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 the consolidated statement of comprehensive income.
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 2019 and the capital expenditure for the year then
ended are as follows:
Dairy Product Temperature
Farming Sourcing Controlled
£’000
£’000 £’000
Unallocated Total
£’000
£’000
Assets 4,445
Liabilities 1,655
7,171
4,773
23,827
12,155
353 35,796
40 18,543
Capital expenditure (Note 12) 44
-
1,690
-
1,734
The segment assets and liabilities at 31 December 2018 and the capital expenditure for the year then
ended are as follows (restated following the adoption of IFRS 16):
Restated – see note 30 Dairy Product Temperature
Farming Sourcing Controlled
£’000
£’000 £’000
Unallocated Total
£’000
£’000
Assets 4,215
Liabilities 1,676
7,130
5,195
23,352
11,497
44 34,741
388 18,756
Capital expenditure (Note 12) 330
3
2,411
-
2,744
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 55
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:
2019
2018
Management
Administration
Technical
Operational
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
20
22
8
110
160
2019
£’000
4,645
419
106
22
23
9
121
175
2018
£’000
4,586
433
141
5,170
5,160
There is an accrual for £21,000 (2018: £27,000) included above for pension costs at 31 December
2019.
The group capitalised employee costs of £176,000 (2018: £117,000) relating to the Grass to Milk
business (2018: Grass to Milk business) as an intangible asset.
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 24.
56 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIALSTATEMENTS
(CONTINUED)
7
Financial income and expenses
Interest receivable
Finance income
Interest expense on bank overdrafts and loans
Interest expense on leases
Finance costs
Net finance costs
8
Profit before tax
2019
£’000
2018
£’000
(restated -
See note 30)
1
1
3
3
(120)
(229)
(187)
(209)
(349)
(396)
(348)
(393)
The following items have been charged/(credited) to the Consolidated Statement of Comprehensive
Income in arriving at profit before tax:
2019
£’000
2018
£’000
(restated-
See note 30)
Depreciation of property, plant and equipment (Cost of Sales)
1,649
1,396
Staff costs (Note 6)
5,170
5,160
Foreign exchange gain
(2)
(29)
Auditors’ remuneration- audit service
- non audit services
50
16
45
9
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 57
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
9
Income taxes
(a) Analysis of charge in year
UK
Corporation tax at 19.00% (2018: 19.00%)
Adjustment in respect of previous periods
Ireland
Corporation tax at 12.5% (2018: 12.5%)
Adjustment in respect of previous periods
Current tax charge
Deferred tax charge (Note 20)
Deferred tax charge
(b) Factors affecting tax charge for year
Profit on ordinary activities before taxation
Profit on ordinary activities multiplied
by standard UK tax rate 19.00% (2018: 19.00%)
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
Adjustments in respect of Research & Development
Trading losses carried forward
Total tax charge for year
2019
£’000
270
(35)
12
-
247
165
165
2018
£’000
439
(45)
-
(1)
393
63
63
2019
£’000
2,388
2018
£’000
2,000
454
380
9
(26)
(20)
(35)
76
(46)
-
412
14
(72)
(4)
(46)
174
-
10
456
The deferred tax charge of £165,000 (2018: £63,000) 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 2019 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.
58 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
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
2019
1,976
(135)
2018
(Restated –
See noted 30)
1,544
(379)
1,841
1,165
30,034,214
30,034,214
6.57p
(0.45)p
5.13p
(1.26)p
6.12p
3.87p
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)
2019
1,976
(135)
2018
(Restated –
See noted 30)
1,544
(379)
1,841
1,165
Weighted average number of ordinary shares outstanding
Dilutive effect of share options
30,034,214
-
30,034,214
-
Weighted average number of shares for the calculation
of diluted earnings per share
30,034,214
30,034,214
Diluted earnings per share – continuing operations
Diluted loss per share – discontinuing operations
Diluted earnings per share- total
6.57p
(0.45)p
5.13p
(1.26)p
6.12p
3.87p
The exercise prices of all share options in issue were above the average market share price during 2018
and hence have no dilutive effect in the prior year. The share options were exercised during 2018 and
none are outstanding at 31 December 2019.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 59
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
11
Goodwill and intangible assets
The net book value of goodwill at 31 December 2019 was £2,338,000 (31 December 2018: £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 unit (CGU) 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 12.3% has been used.
Other intangible assets
During 2018 work commenced on a major dairy project which included DNA testing and IP licencing
costs. During the year the costs of £419,000 (2018: £166,000) were capitalised and amortised £Nil
(2018: £Nil).
At 1 January
Additions
Foreign exchange loss
Impairment
2019
£’000
166
419
(21)
-
2018
£’000
141
166
-
(141)
At 31 December
564
166
12
Property, plant and equipment
The company has carried out impairment reviews on a number of its properties. In carrying out
the review an annual discount factor of 12.3% 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 2019 (2018: £Nil).
60 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
12
Property, plant and equipment (continued)
Cost (restated – see note 30)
At 1 January 2019
Additions
Foreign exchange
At 31 December 2019
Depreciation (restated – see note 30)
At 1 January 2019
Charge for year
Foreign exchange
At 31 December 2019
Net book value
31 December 2019
Freehold
Land
£’000
Buildings
£’000
Plant and
Equipment
£’000
Total
£’000
3,544
-
-
3,544
-
-
-
-
20,462
24
(149)
14,213
1,710
(30)
38,219
1,734
(179)
20,337
15,893
39,774
7,597
645
(12)
7,766
1,004
(3)
15,363
1,649
(15)
8,230
8,767
16,997
3,544
12,107
7,126
22,777
Cost( restated – see note 30)
At 1 January 2018
Additions
Foreign exchange
At 31 December 2018
Depreciation ( restated – see note 30)
At 1 January 2018
Charge for year
Foreign exchange
At 31 December 2018
Net book value
31 December 2018
3,544
-
-
3,544
-
-
-
-
Freehold
Land
£’000
Buildings
£’000
Plant and
Equipment
£’000
Total
£’000
35,445
2,744
30
20,175
262
25
11,726
2,482
5
20,462
14,213
38,219
6,942
641
14
7,011
755
-
13,953
1,396
14
7,597
7,766
15,363
3,544
12,866
6,447
22,857
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 61
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
12
Property, plant and equipment (continued)
Property, plant and equipment comprise both owned assets and leased assets as follows:
Owned property, plant and equipment
Right of use assets(note 30)
2019
£’000
18,590
4,187
2018
£’000
18,123
4,734
At 31 December
22,777
22,857
The Group leases assets such as buildings, plant and vehicles. Information in respect of leases where
the Group is lessee is presented below:
31 December 2019
Buildings
Plant &
equipment
Depreciation charge for the year
350
409
Total
759
Net book value
2,665
1,522
4,187
Additions
-
271
271
31 December 2018
Buildings
Plant &
equipment
Depreciation charge for the year
340
244
Total
584
Net book value
2,733
2,001
4,734
Additions
-
1,584
1,584
62 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
13
Biological Assets
During 2016 the Group acquired a dairy herd. The herd produced calves in Spring 2017 to be used
for milk production thereafter. The fair value less point of sale costs of the herd at the balance sheet
date was £824,000 (2018: £639,000) resulting in a movement in fair value of £107,000 (2018:
£43,000) which has been recognised in the Consolidated Statement of Comprehensive Income.
At 1 January
Foreign exchange
Additions
Disposals
Movement in fair value less estimated point of sale costs
At 31 December
14
Trade and other receivables
Trade receivables
Less: allowance for credit losses
Trade receivables - net
Other receivables
Prepayments
Transfer to disposal group (note 27)
2018
2019
£’000 £’000
624
639
5
(39)
325
35
(208) (68)
43
107
824
639
2019
£’000
5,937
(7)
5,930
413
791
(277)
2018
£’000
5,419
(26)
5,393
343
825
(311)
6,857
6,250
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 2019 trade receivables of £7,000 (2018: £26,000) were impaired as a result of
credit losses. The other classes within trade and other receivables do not contain impaired assets.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 63
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14
Trade and other receivables(continued)
As of 31 December 2019, trade receivables of £1,109,000 (2018: £1,408,000), were past due of
which £Nil (2018: £Nil) 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
15
Inventories
Goods for resale
Stock write down provisions
Transfer to disposal group (note 27)
2019
£’000
1,073
36
1,109
2019
£’000
1,114
(9)
-
1,105
2018
£’000
1,319
89
1,408
2018
£’000
637
-
(13)
624
Goods for resale consist of commodity products purchased by Townview Foods Limited and Foro
International Connections Limited for resale. As at 31 December 2019, a stock write down
provision was made of £9,000 (2018:£Nil). In the opinion of the directors, the replacement cost of
the inventories did not differ significantly from the figures shown above. The amount of stock
charged through the Statement of Comprehensive Income was £17,854,000 (2018:£20,346,000).
16
Trade and other payables
Trade payables
Value added tax
Payroll taxes
Accruals
Deferred income
Transfer to disposal group (note 27)
2019
£’000
4,342
308
111
1,729
74
-
2018
£’000
3,551
432
100
1,298
80
(15)
6,564
5,446
All amounts are short term. The net carrying value of trade payables is considered a reasonable
approximation of fair value.
64 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
17
Current tax liabilities
Corp oration tax - UK
Corporation tax – Ireland
The above liabilities are all payable within 1 year.
18
Borrowings
Current
Lease liabilities
Invoice finance
Term Loans
Non Current
Lease liabilities
Non-current bank borrowings
2019
£’000
202
29
231
2019
£’000
756
3,485
570
2018
£’000
390
-
390
2018
£’000
(Restated – see
Note 30)
894
3,988
530
4,811
5,412
4,421
1,514
4,990
1,664
5,935
6,654
Total Borrowings
10,746
12,066
The Group arranged the following borrowing facilities with HSBC Bank plc and its subsidiary
HSBC Invoice Finance Limited and Finance Ireland Agri.
(a) HSBC Bank plc agreed to a term loan of £2.2m drawn down in February 2018 over a
maximum period of 7 years.
(b) Finance Ireland Agri agreed a term loan for £0.27m (€0.3m) drawn down in December 2017
for a maximum period of 8 years.
(c) 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 £5m (2018: £5m) which is reviewed annually.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 65
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
18
Borrowings(continued)
(d) HSBC Bank plc agreed to a term loan of £0.3m (€0.35m) drawn down in March 2019 over a
maximum period of 5 years.
Overdraft interest is charged quarterly at an interest rate of bank base rate plus 2.25% (2018:
2.25%). Invoice finance interest is charged on a daily basis at bank base rate plus 1.85% (2018:
1.85%). Term Loan (a) above is charged quarterly at an interest rate of bank base rate plus 1.85%
(2018: 1.85%). Term Loan (b) is charged monthly at an interest rate of 3.75% (2018: 3.75%). Term
Loan (d) is charged quarterly at euribor plus 1.85%.
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; and
(3) legal mortgages held over the Bury St. Edmunds, West Midlands, and Gillingham
properties.
The fair value of the Group’s financial liabilities as at 31 December 2019 was as follows:
2018
2019
Current bank borrowings
Non-current bank borrowings
Book
Value
£’000
4,811
5,935
Fair
Value
£’000
4,811
5,935
Book
Value
£’000
5,412
6,654
Fair
Value
£’000
5,412
6,654
10,746
10,746
12,066
12,066
The Group pays interest at the base rate plus a margin of 1.85% to 3.75% 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
Stock finance
Bank overdraft
2019
£’000
930
364
400
1,694
2018
£’000
110
-
400
510
66 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
18
Borrowings(continued)
Lease liabilities can be analysed as follows:
Maturity analysis – contractual undiscounted cash flows:
Less than one year
One to five years
More than five years
2019
£’000
756
2,900
1,521
2018
£’000
(Restated – see
Note 30)
894
2,922
2,068
Total undiscounted lease liabilities
5,177
5,884
Lease liabilities included in the Consolidated Statement of
Financial Position
Current
Non-current
Amounts recognised in profit or loss in relation to lease
liabilities
Interest on lease liabilities
Expenses relating to short-term leases
Expenses relating to low value leases (excluding short term leases)
Amounts recognised Consolidated Statement of Cash Flows
In relation to lease liabilities
Total cash outflow for leases
756
4,421
894
4,990
5,177
5,884
216
128
-
209
299
-
216
209
The Group leases various warehouses under non-cancellable lease agreements. The leases have
varying lease terms, escalation clauses and renewal rights.
The Group also leases various items of plant and equipment under non-cancellable lease
agreements.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 67
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
19
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
2019
£’000
982
20
1,002
2018
£’000
(Restated – see
Note 30)
819
20
839
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
At 1 January 2018 - restated
Charged to the Consolidated Statement of
Comprehensive Income
At 31 December 2018
Foreign exchange
Charged to the Consolidated Statement of
Comprehensive Income
At 31 December 2019
Accelerated
capital
allowances
£’000
Fair value
gains
£’000
776
63
839
(2)
165
1,002
-
-
-
-
-
-
Total
£’000
776
63
839
(2)
165
1,002
The deferred tax liability due after more than one year prior to offsetting is £982,000 (2018:
£819,000).
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 (2018: £97,000). However, the board
feels that it is highly unlikely that this will ever be recoverable and have not provided this amount
in the accounts.
68 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
20
Share capital and Share Premium
Authorised
60,000,000 (2018: 60,000,000) Ordinary shares of 25€c each
10,836
10,836
2019
£’000
2018
£’000
Allotted, called up and fully paid
Ordinary shares of 25€c each
At 1 January 2018
Issued during the year
At 31 December 2018
Issued during the year
At 31 December 2019
Number
£’000
29,960,378
110,000
5,616
24
30,070,378
5,640
-
________
-
30,070,378
5,640
During 2018, the company issued 110,000 Ordinary shares of 25€c each for a total cash
consideration of £64,000. The excess over nominal value of £40,000 was transferred to the share
premium account. No shares were issued during 2019.
All shares are equally eligible to receive dividends and the repayment of capital and represent one vote
at a shareholders’ meeting.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 69
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
20
Share capital and Share Premium (continued)
Share Premium
At 1 January
Share Issue
At 31 December
Share options
2019
£’000
7,321
-
2018
£’000
7,281
40
7,321
7,321
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.
70 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
20
Share capital and share premium (continued)
Movements in the number of share options outstanding and their related weighted average exercise
price are as follows:
2019
2018
Weighted
Average
Exercise
Price
Options
Number
Weighted
Average
Exercise
Price
Options
Number
Outstanding at 1 January
-
-
250,000
0.58
Outstanding at 31 December
- -
Exercisable at 31 December
- -
-
-
-
-
The share options outstanding at the start of 2018 expired in June 2018 at an exercise price of
58p; 110,000 options were exercised at this point and 140,000 lapsed. 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.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 71
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
20
Share capital and share premium (continued)
During 2016 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 either 2018 or 2019.
21
Other reserves
Capital conversion reserve fund
Foreign exchange
2019
£’000
23
(44)
2018
£’000
23
80
(21)
103
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.
22
Cash and cash equivalents
Cash at bank and on hand
23
Dividends
Final dividend paid in respect of the previous year
of 1.80€ cent (2018: 1.65€ cent) per ordinary share
2019
£’000
2018
£’000
1,054
1,543
1,054
1,543
2019
£’000
449
2018
£’000
413
The Board recommends the payment of a final dividend of 1.90€ cent per share. This will be paid
on 16 October 2020 to those shareholders on the register on 25 September 2020. It will bring the
total dividend in respect of the financial year to 1.90€ cent per share compared with 1.80€ cent last
year.
72 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
24
Directors’ remuneration
Aggregate emoluments
Company pension contributions
2019
£’000
499
42
541
2018
£’000
507
46
553
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.
25
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 £106,000 (2018: £141,000). There was an accrual for £21,000
(2018: £27,000) included above for pension costs at 31 December 2019.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 73
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
26
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 Limted100%
Commodity trading
Cantwellscourt Farm Limited
100%
Dairy Farming
Grass to Milk Company Limited
85%
Dairy
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
Investment company
Property management
Commodity trading
Norish Limited
(subsidiary of Norish (N.I.) Limited)
100%
Cold storage
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.
74 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
26
Group undertakings(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
Cantwellscourt Farm Limited
Grass to Milk Company 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
Bury St Edmunds, Suffolk, IP32 6NL
Townview Foods Limited
7 Carrivekeeney Road
Newry, County Down, BT35 7LU
(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
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
472,120 Preferred shares of £1 each
Cantwellscourt Farm Limited
100,000 Ordinary shares of €1 each
Grass to Milk Company Limited
100 Ordinary shares of €1 each
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 75
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
27 Discontinued operations and assets classified as held for sale
During the year ended 31 December 2018, the Group discontinued the Juice Business for the ready
to drink market in the product sourcing division. During the year ended 31 December 2016 the
Group discontinued the FMCG business in the commodity trading division to which the other
current assets include.
Financial information in respect of this component of the Group is summarised below.
2019
£’000
2018
£’000
Operating cash flows
Investing cash flows
Financing cash flows
Total cash outflows
Other current assets
-
-
-
-
2019
£’000
277
Total assets of the disposal group classed as held for sale
277
(48)
-
-
(48)
2018
£’000
324
324
76 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
27 Discontinued operations and assets classified as held for sale(continued)
Trade and other payables
Total liabilities of the disposal group classed as held for sale
Revenue
Expenses
2019
£’000
2018
£’000
-
-
2019
£’000
-
(135)
(15)
(15)
2018
£’000
143
(522)
Loss after tax of discontinued operations
(135)
(379)
28 Post-reporting date events
The directors and the group’s management team are closely monitoring developments during the
Covid-19 crisis and assessing the potential impact they may have on the group’s people, its
activities, operations and financial position. The directors note that this is a dynamic situation
and at present there is a high degree of uncertainty in relation to the wider economic short-to-
medium term impact, however are they satisfied that the group is in a strong financial position to
withstand potential future challenges in this context
29 Related party transactions
Product sales totalling £110,000 (Marketing services 2018: £107,000) were provided to a
company where one of our Directors held a shareholding during the year. As at 31 December
2019 a balance of £39,000 was outstanding ( 2018 : £Nil).
30 Adoption of new accounting policy- IFRS 16
Except for the changes below, the Group has consistently applied the accounting policies to all
periods presented in these financial statements. The Group has applied IFRS 16 with an initial
application date of 1 January 2019. As a result, the Group has changed its accounting policy in
respect of leases and the impact is set out below. The Group has applied IFRS 16 using the
retrospective approach.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 77
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
30 Change in accounting policy (continued)
Previously, the Group determined at contract inception whether or not an arrangement contained a
lease in accordance with IFRIC 4 Determining Whether an Arrangement Contains a Lease. Under
IFRS 16, the Group assesses whether or not a contract is either a lease or contains a lease based on
the revised accounting policy explained in note 2.
On transition to IFRS 16, the Group has elected to apply the practical expedient to grandfather the
assessment of which transactions are leases. The Group has applied the IFRS 16 lease definition
to contracts entered into or changed on or after 1 January 2019.
As a lessee, the Group previously classified leases as either operating or financing leases based on
its assessment of whether the lease transferred significantly all of the risks and rewards incidental
to ownership of the underlying asset to the Group. Under IFRS 16, the Group recognises right of
use assets and lease liabilities measured in accordance with IFRS 16.
The Group has elected to apply the recognition exemption in relation to short terms leases (less
than 12 months duration). For leases of other assets which were classified as operating leases under
IAS 17, the Group has recognised right-of-use assets and lease liabilities. These right of use assets
have been tested for impairment on transition.
The impact on the financial statements in summarised below:
Consolidated Statement of Financial Position
1 January 2018
As previously
reported Adjustments As restated
£’000
£’000
£’000
Property, plant and equipment
Other
Total assets
Borrowings
Other
Total liabilities
Retained earnings
Other
Total equity
17,759
13,186
30,945
6,945
8,047
3,558
-
3,558
4,520
(179)
21,317
13,186
34,503
11,465
7,868
14,992
4,341
19,333
3,516
12,437
15,953
(783)
-
2,733
12,437
(783)
15,170
78 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
30 Change in accounting policy (continued)
Consolidated Statement of Financial Position
31 December 2018
As previously
reported Adjustments As restated
£’000
£’000
£’000
Property, plant and equipment
Other
Total assets
Borrowings
Other
Total liabilities
Retained earnings
Other
Total equity
18,125
11,884
30,009
6,434
6,850
4,732
-
4,732
5,632
(160)
22,857
11,884
34,741
12,066
6,690
13,284
5,472
18,756
4,224
12,501
16,725
(740)
-
(740)
3,484
12,501
15,985
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018
As previously
reported Adjustments As restated
£’000
£’000
£’000
Revenue
Cost of sales
Other income
Administrative expenses
Finance income
Finance expense
Income taxes
Loss from discontinued activities
36,802
(33,871)
43
(851)
3
(187)
(439)
(379)
-
270
-
-
-
(209)
(17)
-
36,802
(33,601)
43
(851)
3
(396)
(456)
(379)
Profit for the financial year
1,121
44
1,165
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 79
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
30 Change in accounting policy (continued)
Consolidated Cash Flow Statement
For the year ending 31 December 2018
As previously
reported Adjustments As restated
£’000
£’000
£’000
Profit for the period from continuing activities
Finance expenses
Depreciation - property, plant and equipment net
Other
Cash generated from operations
Interest paid
Other
Net cash generated from operating activities
1,939
187
812
(217)
2,721
(187)
(367)
2,167
61
209
584
-
854
(209)
-
645
2,000
396
1,396
(217)
3,575
(396)
(367)
2,812
Cash used in investing activities
(1,293)
(1,584)
(2,877)
Payment of lease liabilities
Other
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
(216)
(673)
(889)
(15)
(645)
1,584
939
-
(861)
911
50
(15)
There is no material impact on either the Group’s basic or diluted earnings per share for the year
ended 31 December 2018.
31 Approval of financial statements
The Board of Directors approved these financial statements on 12 March 2020.
80 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2019
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 12 March 2020 by:
T.J. O’Neill
Chairman
A. Hughes
Finance Director
2019
£’000
2018
£’000
1,209
1,209
12,652
12,095
(427)
(388)
12,225
11,707
13,434
12,916
5,640
7,321
23
-
450
5,640
7,321
23
(563)
495
13,434
12,916
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 81
COMPANY STATEMENT OF CHANGES IN EQUITY
Share
Capital
£’000
5,616
-
-
-
24
24
Share
Premium
Account
£’000
7,281
-
-
-
40
40
Capital
Conversion
Reserve
Fund
£000
23
-
-
-
-
-
Treasury
Shares
£’000
(563)
-
-
-
-
-
5,640
7,321
23
(563)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
563
-
563
Profit
And
Loss
Account
£’000
151
778
778
(434)
-
(434)
495
990
990
(563)
(472)
(1,035)
Total
£’000
12,508
778
778
(434)
64
370
12,916
990
990
-
(472)
(472)
At 1 January 2018
Profit for the financial
year
Total comprehensive
income for the year
Dividends paid(note 4)
Share issue
Transaction
owners
At 31 December 2018
with
Profit for the financial
year
Total comprehensive
income for the year
Transfer of
shares
Dividends paid(note 4)
Transactions
with
owners
treasury
At 31 December 2019
5,640
7,321
23
-
450
13,434
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.
82 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
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 company has not prepared a Statement of cashflows, as required under IAS 1, as the
company does not hold cash and has had no cash movements in the current or prior financial
year.
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).
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 83
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 to assumptions about future operating results and the determination
of a suitable discount rate.
3
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
£990,000 (2018: 778,000).
4
Dividends paid and proposed
Final dividend paid in respect of the previous year
of 1.80 cent (2018: 1.65cent) per ordinary share
2019
£’000
2018
£’000
449
434
The company paid a total dividend in 2019 of £449,000 (2018: £434,000), of which £449,000
(2018: £434,000) was paid through the company.
5
Investments – Shares in group undertakings
Cost and net book value at 1 January and 31 December
2019
£’000
1,209
2018
£’000
1,209
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 26 to the consolidated IFRS
accounts within these financial statements.
84 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
NOTES TO THE ACCOUNTS (CONTINUED)
6
Debtors
Amount receivable from subsidiary undertakings
Other debtors
2019
£’000
12,647
5
2018
£’000
12,090
5
12,652
12,095
Amounts due from Group undertakings are unsecured, interest free, have no fixed date of repayment and are
repayable on demand.
All of the Company’s trade and other receivable as shown above are considered to approximate fair value.
7
Creditors: Amounts falling due within one year
Amounts owed to subsidiary undertakings
Corporation tax
2019
£’000
388
39
2018
£’000
388
-
427
388
Amounts due to Group undertakings are unsecured, interest free, have no fixed date of repayment and are
repayable on demand.
All of the Company’s intra-group payables as shown above are considered to approximate fair value.
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 85
NOTES TO THE ACCOUNTS (CONTINUED)
8 Called up share capital
Authorised
2019
£’000
2018
£’000
60,000,000 (2018: 60,000,000) Ordinary shares of 25€c each
10,836
10,836
Allotted, called up and fully paid
Number
£’000
Ordinary shares of 25€c each
At 1 January 2018
Issued during the year
At 31 December 2018
Issued during the year
29,960,378
110,000
30,070,378
-
________
5,616
24
5,640
-
At 31 December 2019
30,070,378
5,640
The total Ordinary shares in issue are 30,070,378 (2018: 30,070,378). These are all fully paid up.
During 2019, the company issued 110,000 Ordinary shares of 25€c each for a total cash
consideration of £64,000. The excess over nominal value of £40,000 was transferred to the share
premium account.
Details of share options that were granted by the company are presented in note 20 to the
consolidated IFRS financial accounts within these financial statements.
9
Financial commitments and contingencies
At the 31 December 2019, the Company has exposure for the debts of Norish Limited and
Townview Foods Limited totalling £5,375,000 (2018: £5,946,000) 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; and
(3) legal mortgages held over the Bury St. Edmunds, West Midlands and Gillingham properties.
86 NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019
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
NORISH PLC - ANNUAL REPORT & ACCOUNTS 2019 87