Valeo Foods (UK) Limited Annual Report and Financial Statements 2015 STRATEGIC REPORT 3 INDEPENDENT AUDITORS' REPORT 6-8

Transcription

1 SIGNED COPY Valeo Foods (UK) Limited Annual Report and Financial Statements For the 13 month period ended 31 March Registered number:

2 Annual Report and Financial Statements CONTENTS DIRECTORS AND ADVISERS 2 Page STRATEGIC REPORT 3 DIRECTORS' REPORT 4-5 INDEPENDENT AUDITORS' REPORT 6-8 PROFIT AND LOSS ACCOUNT 9 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 9 GROUP BALANCE SHEET 10 COMPANY BALANCE SHEET 11 CASH FLOW STATEMENT 12 NOTES TO THE FINANCIAL STATEMENTS

3 DIRECTORS AND OTHER INFORMATION Board of Directors JS Rodrigues PK Briant I Ainsworth Secretary and Registered Office Elian Corporate Services (UK) Limited 6th Floor 11 Old Jewry London EC2R 8DU Registered number: Auditors PricewaterhouseCoopers Chartered Accountants and Registered Auditors One Spencer Dock North Wall Quay Dublin 1

4 STRATEGIC REPORT The directors present their strategic report for Valeo Foods (UK) Limited (the 'Company') for the thirteen month period ended 31 March. Principal activity The principal activity of the Company in an investment holding company. On 28 February 2014 the Company acquired the share capital of Rowse Honey Limited a UK incorporated company. On 20 February the Company acquired the share capital of Wardell Roberts Limited a company incorporated in Ireland and Robert Roberts (NI) Limited (a company incorporated in the UK. The accounting reference date is 31 March with this set of Accounts being the first set of Accounts prepared for the Group. The reporting currency is pounds sterling. Results, business review and future developments The profit and loss account for the period is set out on page 9. The Company's loss for the financial period is E1.149 million. The directors consider the Company entities within the Group are well placed to take full advantage of the growth in the market and also the increased awareness of the Group's brands in both the UK and Ireland. Principal risks and uncertainties The management of the business and the execution of the Company's strategy are subject to a number of risks. These risks are controlled on a group wide basis. Where relevant their impact on the Group is set out below. The availability of raw materials (honey), price inflation and the strengthening of sterling can have a significant impact on the cost price of the UK Company's products. The Company has a dedicated procurement team that builds strong relationships with key suppliers. Alternative sources of raw materials are constantly being reviewed to ensure we obtain the most competitive price for the best quality raw materials. Product quality is of paramount importance. Our products are sourced from a range of suppliers and pass through a number of manufacturing processes. Each link in the chain can be a risk in terms of quality and safety. Suppliers are audited and we operate approved supplier lists. Our production processes are subject to a number of quality and safety checks and are also regularly audited. We test batches of products daily for quality to ensure they meet our own stringent standards. Key performance indicators ("KPls") Given the straightforward nature of the businesses, the Company's directors are of the opinion that analysis using KPls is not necessary for an understanding of the development, performance or position of the business. deheoard 3

5 DIRECTORS' REPORT The directors present their annual report and the audited financial statements of the Company for the thirteen month period ended 31 March. The Company's registered number is Financial risk management The Company is exposed to currency risk as a result of its operations. The majority of sales in the period under review are denominated in sterling, whereas purchasing can be in various foreign currencies. The Company seeks to minimise currency risk by forecasting future purchasing requirements by currency and then entering into forward contracts to purchase the required foreign currency, at fixed exchange rates. The Company has interest bearing assets. Interest bearing assets comprise only cash balances which are subject to interest rate fluctuations. The Company has interest bearing loans from related entities and have issued a Eurobond to an entity within the Valeo Foods Group. The purpose of both the loans and the Eurobond are to fund the company's acquisition activity. The Company is exposed to liquidity risk. The company is part of the Valeo Foods group and the group finance team regularly monitors available cash balances and available facilities to ensure that the group has sufficient funds to meet its obligations. The Company is exposed to credit risk as a result of its operations. Prior to sales being made appropriate checks are performed over the ability of the customer to pay. Regular reviews of credit limits and monitoring of the aged debtors ledger are utilised to minimise the risk to the Company on an ongoing basis. Dividends No dividends have been declared or paid Future developments These are disclosed within the strategic report. Post balance sheet events On 8 May the Company increased its share capital by Euro 112,656,565 (GBP). The Company also issued Loan notes in the sum of 100,000,000 to a related Valeo Foods Group company. The purpose of the increase in share capital and loan notes was to fund on-going acquisition activity. On 8 May Rowse Honey Limited (a Direct subsidiary) invested in Valeo Foods Italy Bid Co S.p.A and provided a loan to its subsidiary company. This investment and loan was partly funded by the issue of 81,635,192 ordinary shares at par to the Company, the receipt of a loan from a related company and use of the company's own cash resources. Directors The directors of the Company during the period and up to the date of approval of these financial statements were: JS Rodrigues (appointed 13 February 2014) PK Briant (appointed 13 February 2014) I Ainsworth (appointed 18 February ) Directors' indemnities A qualifying third party indemnity provision is in place for the directors of the Company. This covers liability for the actions of directors and officers of the Company and associated costs, including legal costs. Charitable donations During the period donations totalling 8,400 were made to various charitable organisations. Research and development The Group continues to invest in developing new products and manufacturing techniques. The directors regard innovation as integral to the continuing success of the business and the on-going growth of the business. 4

6 DIRECTORS' REPORT - continued Statement of directors' responsibilities The directors are responsible for preparing the directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Statement of disclosure of information to auditors The directors confirm that the auditors have been provided with appropriate information and that: so far as each director is aware, there is no relevant audit information of which the Company's auditors are unaware. each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. On behalf of the boar 3 March

7 JL PWC Independent auditors' report to the members of Valeo Foods (UK) Limited Report on the financial statements In our opinion, Valeo Foods (UK) Limited's group financial statements and company financial statements (the "financial statements"): give a true and fair view of the state of the group's and of the company's affairs as at 31 March and of the group's loss and cash flows for the 13 month period (the "period") then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act The financial statements, included within the Annual Report, comprise: the group and parent company balance sheet as at 31 March ; the profit and loss account for the period then ended; the statement of cash flows for the period then ended; and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in the preparation of the financial statements is United Kingdom Accounting Standards, and applicable law (United Kingdom Generally Accepted Accounting Practice). In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events. Opinion on other matter prescribed by the Companies Act 2006 In our opinion, the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements. Other matters on which we are required to report by exception Under the Companies Act 2006 we are required to report to you if, in our opinion: we have not received all the information and explanations we require for our audit; or adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or the company financial statements are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin i, Ireland, I.D.E. Box No. 137 T (a) , F: +353 (o) , Chartered Accountants

8 JL PWC Independent auditors' report to the members of Valeo Foods (UK) Limited - continued Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors' remuneration specified by law are not made. We have no exceptions to report arising from this responsibility. Responsibilities for the financial statements and the audit As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) ("ISAs (UK & Ireland)"). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. We primarily focus our work in these areas by assessing the directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements. We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

9 JL PWC Independent auditors' report to the members of Valeo Foods (UK) Limited - continued In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Paul O'Connor For and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Auditors Dublin 8 March 2016

10 PROFIT AND LOSS ACCOUNT For the 13 month period ended 31 March Notes 13 month period ended 31 March 'OOO Turnover 2 110,120 Cost of sales (83,583) Gross profit 26,537 Distribution costs (1,945) Administrative expenses (17,030) Operating profit before exceptional costs 7,562 Exceptional costs 3 (1,971) Operating profit after exceptional costs 5,591 Interest payable and similar charges 5 (5,513) Profit on ordinary activities before tax 6 78 Tax on loss on ordinary activities 7 (1,227) Loss for the financial period 16 (1,149) All activities are in respect of continuing operations. There is no difference between the profit on ordinary activities before tax and the profit for the financial period year stated above and their historical cost equivalents. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the 13 month period ended 31 March 13 month period ended 31 March Note Loss for the financial period (1,149) FRS 17 Pension valuation adjustments (1,770) FRS 17 Deferred tax adjustments (36) Total recognised (losses) in the financial period 16 (2,955) The financial statements on pages 9 to 26 were approve y the board of directors on 3 March and signed on their behalf by:_ J -

11 GROUP BALANCE SHEET As at 31 March Notes Fixed assets Intangible assets 8 80,133 Tangible assets 9 14,493 94,626 Current assets Stocks 10 24,955 Debtors 11 39,098 Cash at bank and in hand 15,779 79,832 Creditors: amounts falling due within one year 12 (39,074) Net current assets 40,758 Total assets less current liabilities 135,384 Loan from related company payable in excess of one year (66,138) Pension Liabilities 14 (9,932) Provisions for liabilities and charges 14 1,000 Net assets 60,314 Capital and reserves Called up share capital - Share Premium 15 39,240 Eurobond issued to related company 24,474 Profit and loss account 16, 17 (3,400) Total shareholders' funds 17 60,314 The financial statements on pages 9 to 26 were approved by the board of directors on 3 Mar oh 2016 and signed on their behalf by: 10

12 COMPANY BALANCE SHEET Asat31 March Notes Fixed assets Investments in subsidiary companies at cost ,228 Current assets Debtors 11 1,059 Cash at bank and in hand 419 1,478 Creditors: amounts falling due within one year 12 (4,000) Net current assets (2,522) Total assets less current liabilities 130,706 Loan from related company payable in excess of one year (66,138) Net assets 64,568 Capital and reserves Called up share capital 15 - Share Premium 15 39,240 Eurobond issued to related company 24,474 Profit and loss account 854 Total shareholders' funds 18 64,568 The financial statements on pages 9 to 26 were aroved9ie board of directors on 3 March 2016 and signed on their behalf by: 11

13 STATEMET OF CASH FLOWS For the 13 month period ended 31 March Note Cash flows from operating activities Cash generated from operations 24 14,352 Cash flow from investing activities Acquisition of subsidiary, net of cash acquired (127,405) Purchases of property, plant and equipment - Interest received - Exchange Translation Losses (518) Net cash flows from investing activities (127,923) Cash flows from financing activities Proceeds from issuance of ordinary shares 39,241 Proceeds from issue of issue of Eurobond 24,311 Proceeds from issue of loan to related company 60,834 Funding received from related companies 4,964 Net cash flows from financing activities 129,350 Net increase in cash and cash equivalents 15,779 Cash and cash equivalents at beginning of year - Cash and cash equivalents at end of year 15,779 12

14 NOTES TO THE FINANCIAL STATEMENTS I Accounting policies The principal accounting policies, which have been consistently applied unless otherwise stated throughout the current and preceding financial period in the preparation of these financial statements, are set out below: Basis of preparation The financial statements have been prepared on a going concern basis, in accordance with applicable law and accounting standards in the United Kingdom, the Companies Act 2006 and under the historical cost convention. In accordance with FRS18 "Accounting policies" the directors have reviewed the policies and deem them to be the most appropriate for the Company. Goodwill Goodwill represents the excess of the fair value of the consideration given over the aggregate of the fair value of the identifiable net assets acquired. Goodwill is amortised through the profit and loss account over its estimated useful economic life. During the period the directors have assessed the estimated useful economic life of the goodwill and believe that this should be amortised over a period of 20 years. Tangible fixed assets The cost of tangible fixed assets is their purchase cost, together with any incidental costs of acquisition. Depreciation is calculated so as to write the cost of tangible fixed assets down to their estimated residual values over their expected useful economic life. Freehold land is not depreciated. The principal useful economic lives used are: Freehold property Plant and machinery Fixtures and fittings Motor vehicles years 3-7 years 3-5 years 4 years Impairment Intangible and tangible assets are tested for impairment when an event that might affect asset values has occurred. An impairment loss is recognised in the profit and loss account to the extent that the carrying amount cannot be recovered either by selling the assets or from the discounted future earnings from operating the assets, calculated in accordance with FRS 11. Investments in group undertakings Investments in group undertakings are stated at cost less any provisions for impairment. Stocks Stocks are stated at the lower of cost and net realisable value. In general, cost is determined on a first in first out basis and includes transport and handling costs. Net realisable value is the estimated selling price less further costs expected to be incurred in bringing the stocks to completion and disposal. Finished goods include the cost of materials, labour and attributable overheads at normal levels of production. Where necessary, provision is made for obsolete, slow moving and defective stocks. Operating leases Costs in respect of operating leases are recognised on a straight line basis over the lease period to the next rent review. 13

15 NOTES TO THE FINANCIAL STATEMENTS - continued I Accounting policies - continued Research and development Research and development costs are written off to the profit and loss account as they are incurred. Taxation The tax payable is based on the taxable profit for the year. Taxable profit differs from the profit as reported in the profit and loss account because it excludes items of income and expense that are taxable or deductible in other years and it also excludes items which are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantially enacted at the balance sheet date. Deferred tax is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date at rates expected to apply when they crystallise based on enacted or substantially enacted taxes and law. Timing differences arise from the inclusion of items of income and expenditure in tax computations different from those in which they are included in financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts which were initially recorded, such differences will impact the corporation tax and deferred tax provisions in the period in which such determination is made. Foreign currencies Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction, or, where forward contracts have been arranged, at the contracted rates. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date, or at the contracted rate where applicable, and any gains or losses on translation are taken to the profit and loss account. Pension costs The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in independently administered funds. Contributions are charged to the profit and loss account as they fall due. 2 Turnover Turnover is stated net of value added tax, customer rebates, trade and settlement discounts and relates to the blending and bottling of honey, maple syrup, luxury spreads and dessert sauces. Revenue is recognised on receipt of goods by customers. An analysis of turnover by geographical market is given below: 13 month period ended 31 March UK 100,506 Europe 9,496 Rest of World ,120 14

16 NOTES TO THE FINANCIAL STATEMENTS - continued 3 Exceptional costs Exceptional costs arise on the restructuring of the operations following acquisition. 4 Employee information The average monthly number of persons (including executive directors) employed by the Company during the period / year was: Number By activity Production 159 Management and administrative 87 Total month period ended 31 March Staff costs (for the above persons) Wages and salaries 9557 Social security costs 910 Other pension costs (note 21) ,808 5 Interest payable and similar charges 13 month period ended 31 March Related company loan interest and Eurobond interest (5513) 15

17 NOTES TO THE FINANCIAL STATEMENTS - continued 6 Profit on ordinary activities before tax 13 month period ended 31 March Profit on ordinary activities before tax is stated after charging: Depreciation charge on tangible fixed assets 1,120 Goodwill amortisation 3,317 Services provided by the Company's auditor - Fees payable for the audit 30 Operating leases - land and buildings 288 Operating leases - plant and machinery including short term hire Tax on profit on ordinary activities 13 month period ended 31 March Current tax: UK corporation tax on profits 1,110 Non UK corporation tax on profits - Total current tax charge 932 Deferred tax: Origination and reversal of timing differences 92 Adjustments in respect of previous years 25 Total deferred tax (note 15) 117 Total tax charge on profit on ordinary activities 1,227 The tax assessed for the period is higher than the effective rate of corporation tax in the UK of 21.5%. The differences are explained below: Profit on ordinary activities before tax 78 Profit on ordinary activities before tax multiplied by the effective rate in the UK of 21.5% (2013: 23.25%) 17 Effects of. Impact of different tax rates in other jurisdictions 112 Accelerated capital allowances and other timing differences (116) Expenses not deductible for tax purposes 1,097 Total current tax charge 1,227 On 2 July 2013 changes to the UK Corporation tax rates were substantively enacted reducing the corporation tax rate in the UK to 20% from 1 April. Further reductions included in the 8 July budget to reduce the corporation tax rate to 18% are not substantially enacted and have therefore not been used to calculate deferred tax balances within these financial statements. 16

18 NOTES TO THE FINANCIAL STATEMENTS - continued 8 Intangible assets Goodwill Cost Goodwill arising on acquisition of subsidiaries 83,389 Amortisation Charge for the period (3,256) At 31 March (3,256) Net book value At 31 March 80,133 9 Tangible assets Freehold Plant and Fixtures Motor Total property machinery and fittings vehicles Cost At 1 March 2014 Acquired 6,986 7, ,156 Additions Exchange (13) (3) (4) At 31 March 6,986 7, ,613 Charge for the period (32) At 31 March (32) 1,120 Net book value At 31 March 6,894 6, ,493 Freehold property includes land of 667,000 (2013: 667,000) which is not depreciated 10 Stocks Raw materials 7,605 Finished goods 17,350 Consignment stock arrangements with suppliers arise in the ordinary course of business. Items drawn from consignment stock are invoiced to the Company at the price prevailing at that date. The value of such stock, at cost, which has been excluded from the balance sheet in accordance with FRS5, amounted to 3,055,

19 NOTES TO THE FINANCIAL STATEMENTS - continued 11 Debtors Group Trade debtors 31,906 Amounts owed by related undertakings 254 Other debtors 524 Prepayments and accrued income 6,414 Company Amounts owed to related undertakings 17,469 Amounts owed by related undertakings are unsecured, interest free and repayable on demand. 12 Creditors: amounts falling due within one year Group Trade creditors 19,577 Amounts owed to group undertakings 5,889 Other taxation and social security 472 Corporation tax 150 Accruals and deferred income 12,986 39,074 Company Amounts owed to related undertakings 4,000 Amounts owed to group undertakings are unsecured, interest free and repayable on demand. 13 Deferred tax (IiabiIity)Iasset The movement in deferred tax can be analysed as follows: Deferred tax asset acquired as at 1 March Charged to the profit and loss account 117 Deferred tax liability as at 31 March (30) The deferred tax asset is analysed as follows: Liability difference relating to capital allowances (30) Asset difference relating to pension liabilities timing 1,030 1,000 There is no un provided deferred tax. Deferred tax is calculated at the rate of the country in which the timing differences arose. 18

20 NOTES TO THE FINANCIAL STATEMENTS - continued 14 Retirement benefit obligations The Group acquired a Wardell Roberts defined benefit pension plan and a Kelkin defined benefit pension plan as part of the acquisition of the Wardell Roberts Group of Companies. A number of Valeo employees are members of these schemes. The Group also operates defined contribution pension plans in Ireland and the UK. Retirement benefit obligations are assessed across the Group as a whole on an annual basis, in accordance with the advice of a professionally qualified actuary, using the projected unit method. Defined contribution pension plan A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. Defined benefit pension plan Valeo's defined benefit pension plans (in its Irish subsidiary companies) provide benefits to members in the form of a level of pension payable for life based on accrued benefits to date of cessation of contribution. The level of benefits provided depends on retired members' length of service and their salary in the final years leading up to retirement. Current deferred members' benefits are based on accrued employee benefits and accrued and payable contributions in line with actuarial recommendations. In the Maiden plan, pensions in payment are generally increased in line with inflation or at a fixed rate of 3% per annum depending on retirement date, whereas pensions in the Jacob Fruitfield plan do not receive inflationary increases once in payment but instead are increased at a fixed monetary rate as set out in the scheme rules. With the exception of the post retirement inflationary risk in the Maiden plan, the plans face broadly similar risks, as Valeo operates these plans under a set regulatory framework. Benefits are paid to members from trustee-administered funds. The trustees are responsible for ensuring that the plans are administered in accordance with relevant Trust Deed and Rules. Plan assets are held in trusts and are governed by local Irish regulation and practice. If investment experience is worse than expected, Valeo's obligations are increased. The nature of the relationship between Valeo and the trustees is also governed by Irish regulations and practice. The trustees must agree a funding plan with the sponsoring company such that any funding shortfall is expected to be met by additional contributions and investment outperformance. In order to assess the level of contributions required, triennial valuations are carried out with plan's obligations measured using prudent long term assumptions which differ to those used to measure accounting liabilities. The respective plan trustees' other duties include managing the investment of plan assets, administration of plan benefits and exercising of discretionary powers. Valeo works closely with the trustees to manage each respective plan. Annual statutory minimum funding valuations are performed in respect of the plans, and cash contributions are set in accordance with Irish legislation. 19

21 NOTES TO THE FINANCIAL STATEMENTS - continued 14 Retirement benefit obligations - continued The table below sets out the details of the latest funding valuations. The lump sum contribution amounts noted are the amounts determined by the consulting actuaries to eliminate the actuarial deficits on the plans noted. Details of latest funding valuations Wardell Roberts Plan Kelkin Plan Date of last formal funding valuation Assets at valuation date Funding liabilities at valuation date Deficit at valuation date Contribution rate agreed to meet the cost of benefits accruing, plus related expenses (and to remove deficit) Lump sum contributions per annum to remove the deficit Plan details The following table sets out details of the membership of the two schemes: 31 December December million 2.9 million 19.24mi11ion 3.1 million 1.4 million 0.3 million 23.1% of pensionable 20.0% salaries Plan details at last valuation date Active members - by number Active members - by proportion of funding liability Total pensionable salary roll Deferred members - by number Deferred members - by proportion of funding liability Total deferred pensions (at date of leaving scheme) Pensioner members - by number Pensioner members - by proportion of funding liability Total pensions in payment Wardell Roberts Plan Kelkin Plan % 72% 1.8k 586k % 17% 196k 40k % 11% 370,000 24,142 Actuarial assumptions The assumptions used in calculating the accounting costs and obligations of Valeos defined benefit pension plans, as detailed below, are set by the Directors after consultation with independent, professionally qualified actuaries. The discount rate used to determine the present value of the obligations is set by reference to market yields on high quality corporate bonds. The assumptions for price inflation are set by reference to the difference between yields on longer-term conventional government bonds and index-linked bonds with appropriate adjustments to reflect distortions due to supply and demand, except for UK CPI inflation, which is set by reference to RPI inflation as no CPI-linked bonds exist. The salary assumption takes into account inflation, seniority, promotion and current employment market relevant to the Group. The assumptions for life expectancy have been set with reference to the actuarial tables used in the latest funding valuations, which for the Irish plans were based on a mortality study. 20

22 NOTES TO THE FINANCIAL STATEMENTS - continued 14 Retirement benefit obligations - continued Actuarial assumptions - continued Principal actuarial assumptions at balance sheet dates: 31 March Kelkin plan WR plan Discount rate 1.6% 1.6% CPI inflation 1.5% 1.5% Expected rate of salary increases 0% 0% Expected rate of pension increases 0% 1.5% Number of years a current pensioner is expected to live beyond age 65: - Men ,8 - Women Number of years future pensioners currently aged 45 are expected to live beyond age 65: - Men Woman The table below outlines where Valeos post-employment amounts are included in the financial statements: Income statement charge Kelkin Plan Wardell Roberts Plan Defined contributions plans Charge to operating expenses Statement of Recognised Gains and Losses Kelkin plan 435 Roberts plan 1,335 Total loss in the period 1,770 Balance sheet obligations Kelkin plan 2,638 Robert Roberts plan 7,294 Net liability in the statement of financial position 9,932 21

23 NOTES TO THE FINANCIAL STATEMENTS - continued 14 Retirement benefit obligations - continued Asset breakdown A breakdown of the total fair value of the respective plan assets at the period end date is as follows: Equities (quoted) 9,159 Bonds 13,393 Cash 64 Total fair value of assets 22,616 Sensitivity of defined benefit obligation in key assumptions Some of the above changes in assumptions may have an impact on the value of the schemes' investment holdings. For example, the plans holds a proportion of its assets in corporate bonds. A fall in the discount rate as a result of lower corporate bond yields would lead to an increase in the value of these assets, thus mitigating the increase in the defined benefit obligation to some extent. Through its defined benefit pension schemes the Group is exposed to a number of risks, the most significant of which are detailed below: Investment risk The pension plans hold investments in asset classes such as equities which have volatile market values and while these assets are expected to provide higher returns than other asset classes over the long term, the short term volatility could cause an increase in the deficit at any particular point in time. Interest rate risk The pension plans' liabilities are assessed using market yields on high quality corporate bonds to discount the liabilities. As the pension plans hold other assets such as equities the value of the assets and liabilities may not move in the same way. Inflation risk A significant proportion of the benefits under the plans are linked to inflation although the plans' assets are expected to provide a good hedge against inflation over the long term, movements over the short term could lead to further deficits emerging. Mortality risk In the event that members live longer than assumed a further deficit will emerge in the scheme. The detailed sensitivity analysis is as follows 31 March Kelkin Wardell Roberts Sensitivity analysis (a) Discount rate - decrease of 20 basis points Adjusted defined benefit obligation liability 6,125 28,380 Discount rate assumption 1.35% 1.35% Weighted average duration of defined benefit obligation in years (b) Discount rate - increase of 25 basis points Adjusted defined benefit obligation liability 5,362 25,371 Discount rate assumption 1.85% 1.85% Weighted average duration of defined benefit obligation in years

24 NOTES TO THE FINANCIAL STATEMENTS - continued 14 Retirement benefit obligations - continued Kelkin Wardell Roberts Inflation rate (a) Inflation rate - increase of 25 basis points Adjusted defined benefit obligation liability 5,362 25,371 Assumption 175% 1.75% (b) Inflation rate - decrease of 25 basis points 5,918 28,016 Assumption 1.25% 1.25% 15 Share capital 31 March Allotted, called up and fully paid 200 Ordinary shares of 1 each Share Premium 39, Reserves Profit and loss account Total recognised gains and losses in the period (2,955) Exchange adjustments and year end revaluation (445) At 31 March (3,400) 17 Reconciliation of movements in total shareholders' funds Loss for the financial period I year (1,149) Other recognised gains and losses through the statement of total recognised gains and losses (1,806) Exchange adjustments (445) Closing shareholders' funds (3,400) 18 Financial commitments At the financial period / year end the Company had annual commitments under non-cancellable operating leases which expire as follows: Within one year - Between two and five years 424 After five years The Company had no capital commitments at 31 March. 23

25 NOTES TO THE FINANCIAL STATEMENTS - continued 19 Contingent liabilities The company has no contingent liabilities. Pension obligations The Company operates several defined contribution pension schemes. The assets of these schemes are held separately from those of the Company in independently administered funds. The Company's pension cost for the Thirteen month period was 300,000. The contributions outstanding as at 31 March were 10, Foreign currency contracts The Company utilises forward currency contracts to mitigate the risk of short term currency fluctuations on raw material stock prices. These contracts were predominantly for a period covering up to 9 months post 31 March and covered a number of currencies. The fair value of open contracts as at 31 March was an asset of 562, Post balance sheet events On 8 May the Company invested in Valeo Foods Italy Bid Co S.p.A and provided a loan to its subsidiary company. This investment and loan was partly funded by the issue of 81,635,192 ordinary shares at par, the issue of Loan Notes to a related Group company in the sum of P-100,000,000 and use of the company's own cash resources. 22 Related party transactions The Company has not disclosed transactions with its parent company and wholly owned subsidiaries within the Valeo Foods group in accordance with the exemption under the terms of FRS 8 "Related Party Disclosures". 23 Immediate and ultimate parent company and controlling party The immediate parent company is Valeo Foods, a company incorporated in the Republic of Ireland. The ultimate parent company is Valeo Foods Group Limited, a company incorporated in Jersey. Valeo Foods Group Limited is the parent undertaking of the smallest and largest group to consolidate these financial statements. These financial statements are not available for public inspection. There is no individual ultimate controlling party. 24

26 NOTES TO THE FINANCIAL STATEMENTS - continued 24 Subsidiary companies Valeo Foods (UK) Limited holds either directly or indirectly 100% of the share capital of the following companies: Rowse Honey Limited Manufacturing 100% (1) London Food Traders Limited Dormant 100% (1) Rowse EBT Limited Dormant 100% (1) Wardell Roberts Limited* Holding company 100% (2) Robert Roberts and Company (Ireland) Limited* Dormant 100% (2) KP Ireland Limited* Good for resale 50% (2) Robert Roberts Limited* Trading 100% (2) McGrath Brothers (Tea) Limited* Dormant 100% (2) J&G Campbell Limited* Dormant 100% (2) Kelkin Limited* Goods for resale 100% (2) Lemon and Company Limited* Dormant 100% (2) Woodford Bourne Limited* Dormant 100% (2) Kelkin UK Limited Goods for resale 100% (1) Shield Health Limited Goods for resale 100% (1) Pemberton and Seymour Limited* Goods for resale 100% (2) Kintyre Enterprises Limited* Dormant 100% (2) Vinitrading Limited* Dormant 100% (2) Irish Tea Merchants Limited* Dormant 100% (2) Lisnevan Limited Dormant 100% (2) Robert Roberts (NI) Limited Goods for resale 100% (1) (1) 61h Floor, Old Jewry, London EC2R 8DU (2) Commercial House, Millbank Business Park, Lucan, Co Dublin Pursuant to the provisions of Section 348 of the Irish Companies Act 2014, the Company has guaranteed the liabilities of the subsidiary companies listed noted with an * above As a result these companies will be exempt from the filing provisions of Chapter 13 of the Irish Companies Act The following table summarises the consideration paid for the Share Capital of Rowse Honey Limited and the fair value of assets acquired and liabilities assumed: Cash consideration 90,682 Recognised amounts of identifiable assets acquired and liabilities assumed: Property, plant and equipment 7,320 Inventory 13,633 Trade and other receivables 22,136 Cash 2,792 Trade payables and other accruals (14,226) Corporation tax (375) Deferred tax asset 86 Total identifiable net assets 31,366 Goodwill 59,316 Total 90,682 25

27 NOTES TO THE FINANCIAL STATEMENTS - continued 24 Subsidiary companies - continued The following table summarises the consideration paid for the Share Capital of Wardell Roberts Limited and Robert Roberts (NI) Limited and the fair value of assets acquired and liabilities assumed: Cash consideration 40,343 Recognised amounts of identifiable assets acquired and liabilities assumed: Property, plant and equipment 7,836 Inventory 12,898 Trade and other receivables 20,308 Cash 827 Trade payables and other accruals (18,445) Post-employment benefit obligations (8,176) Deferred tax asset on post-employment benefit obligations 1,022 Total identifiable net assets 16,270 Goodwill 24,073 Total 40, Cash generated from operations Profit before tax 78 Loan note interest 5,304 Eurobond interest 162 Goodwill amortisation 3,316 Depreciation 677 Working capital 4,815 Cash generated from operations 14,352 OT IT