Untitled - Winfresh

Transcription

Untitled - Winfresh

Delivering wholesomeness value quality for healthy growth
04
THE WINFRESH GROUP
The Winfresh Group consists of the parent company, Winfresh
Limited, together with the following subsidiary undertakings and
associated companies:
Subsidiary Companies
Winfresh (UK) Limited
Winfruit Ltd (Subsidiary company of Winfresh (UK) Limited)
Windward Isles Banana Company (UK) Ltd (Associated company
of Winfresh [UK] Limited)
Vincyfresh Limited
Sunfresh Limited
Associated Company
Windward Isles Banana Company Holdings (Jersey) Limited
MISSION STATEMENT
To serve our customers with a range of high quality products and
services at just prices, to pay fair prices to our suppliers and to
return fair value to our shareholders.
We aim to do so by working in partnership with our suppliers in a
manner that is socially and morally responsible and commands
respect for our integrity and the positive contributions we make to
the societies we serve.
SHAREHOLDERS
The shareholders of Winfresh are the Governments of the four
Windward Islands, St. Lucia, Dominica, St. Vincent and the
Grenadines and Grenada; Saint Lucia Agricultural Holding
Company (“SLAHC”), Dominica Banana Holding Company
(“DBHC”); St Vincent Banana Growers’ Association (“SVBGA”)
and the Grenada Banana Co-operative Society (“GBCS”). SVBGA
and GBCS have been dissolved and the shares held by them
are to be transferred in accordance with the provisions of the
Shareholders’ Agreement.
GROUP DIRECTORS
BUSINESS ADDRESSES
Montgomery Daniel - Chairman
Cecil Ryan
Vanoulst Jno Charles
Deles Warrington
James Fletcher
Eustace Vitalis
Ferron Lowe
Gemma Bain-Thomas
Bernard Cornibert (Winfresh UK only)
Martina Edwin (Winfresh UK only)
Winfresh
Agricultural Complex | Odsan | P O Box 115
Castries | Saint Lucia WI
Telephone
+1 758 457-8600
Fax +1 758 453-1638
Winfresh UK
High Cross Lane East | Little Canfield | Essex
CM6 1TH | United Kingdom
Telephone
+44 (0) 1371 877 000
Fax +44 (0) 1371 873 531
E-Mail
[email protected]
Web
www.winfresh.net
GROUP EXECUTIVES
Bernard Cornibert Chief Executive
Martina Edwin Company Secretary
Roy Hugh Sales & Marketing Director
Phil Collins
Procurement Director
Ashley JamesOperations Director and
Acting Finance Director
Errol ReidTechnical Director
REGISTERED ADDRESSES
Winfresh Limited
Reg. No. 47 of 1994
99 Chaussee Road | Castries | Saint Lucia WI
Winfresh (UK) Limited
Reg. No: 2929097
3rd Floor | 24 Old Bond Street | London
W1S 4AP | United Kingdom
AUDITORS
Price Bailey LLP
3rd Floor | 24 Old Bond Street | London
W1S 4AP | United Kingdom
BANKERS
Bank of St Lucia
Bridge Street | P O Box 1031 | Castries | Saint Lucia WI
Barclays Bank Plc
50 Pall Mall | London | SW1Y 5AX | United Kingdom
Crown Agents Bank
St. Nicholas House | Sutton | Surrey | SM1 1EL
United Kingdom
SOLICITORS
Caribbean Law offices
99 Chaussee Road | P O Box 835 | Castries | Saint Lucia WI
Bond Pearce LLP
Oceana House | 39-49 Commercial Road | Southampton
SO15 1GA | United Kingdom
Tees Solicitors
High Street | Bishop’s Stortford | Hertfordshire | CM23 2LU
05
06
chairman’s
STATEMENT
I am pleased to report on the performance of the Winfresh
Group for the year ended December 2011. While I am
encouraged by the improvement in performance and results
relative to the previous year’s, I remain very much aware that
the Group has fallen short of its performance target for this
reporting year. Equally, however, we have to recognise the
many challenges facing the Group as a whole and the hurdles
it has been striving to overcome, both with its core business or
principal activities and as well as with those of its constituent
members.
The full impact of the damages caused by Tropical Storm
Tomas, in October 2010, was felt in 2011, the period on which
we are reporting. The Group was affected not just by the loss
of supplies from crop damages but also by significant damages
to plant and machinery, which severely disrupted production
and sales for almost the whole of 2011.
The problems were exacerbated by the outbreak of Black
Sigatoka disease in the banana crops in the main banana
producing regions of the Windward Islands. Not only did this
affect supplies to the Group but its negative impact on product
quality had an even greater financial impact on the Group.
It is against this truly awful backdrop that the seemingly poor
performance of the Group, in this reporting period, must be
assessed.
However, notwithstanding those dreadful circumstances, we
must now put those behind us and forge ahead with the Group’s
plans towards full diversification. We cannot afford to rest on
our laurels—we have to identify the areas of weaknesses
within the Group and to deal with them decisively. We are in
a race with time and it is one the Group cannot afford to lose.
The Group has already started rolling out its new range
of products. It will continue to do so slowly in the weeks or
months ahead and it will accelerate the process leading up to
2013. We should all be excited by this, not just because of the
prospects for growth for the Group but particularly because of
the backward linkages this will create with agriculture and the
role the Group will play in leading agricultural diversification,
processing and marketing in the sub-region.
Despite the difficulties and setbacks of the past, we remain
confident that the Group is on the right path and hopeful of its
success in attaining sustainable growth for the benefit of all
of its stakeholders. We ask you to join the Winfresh Group on
its journey and hope that you will share in the benefits of its
success.
Montgomery Daniel
CHAIRMAN
Board of directors
First row from the left: Montgomery Daniel, CHAIRMAN (ST VINCENT & THE GRENADINES) |
Vanoulst Jno Charles, DIRECTOR (DOMINICA) | Ferron Lowe, DIRECTOR (GRENADA) | Cecil Ryan,
DIRECTOR (ST VINCENT & THE GRENADINES) |
second row from the left: Eustace Vitalis, DIRECTOR (ST LUCIA) | Deles Warrington, DIRECTOR
(DOMINICA) | Gemma Bain-Thomas, DIRECTOR (GRENADA)
NOT PHOTOGRAPHED: James Fletcher, DIRECTOR (ST LUCIA) | Renwick Rose, DIRECTOR (ST VINCENT
& THE GRENADINES)
08
Director’s
REPORT
The Directors present their report and consolidated financial statements, in Eastern Caribbean
Dollars (XCD), for the Winfresh Group for the period ended 31 December 2011. The Eastern
Caribbean Dollar is fixed to the US Dollar (USD) at the rate of USD 1 = XCD 2.70.
DIRECTORS WHO SERVED DURING THE YEAR
Montgomery Daniel - Chairman
Cecil Ryan
Vanoulst Jno Charles
Deles Warrington
Peter Josie
Cosmos Richardson
Ferron Lowe
Gemma Bain-Thomas
Bernard Cornibert—Winfresh UK only
Martina Edwin—Winfresh UK only
RESULTS AND DIVIDENDS
The Group’s results for the period are set out in the statement of comprehensive income on
pages 18 and 19. The result after taxation was a loss of $13,047,252, compared to a loss of
$53,730,750 in the previous year, of which $10,794,480 was attributable to the owners of the
company, against $53,597,299 for previous year.
The Group’s consolidated earnings before interest and taxation from operations on its core
principal activities was a loss of $16,909,424 (compared to a loss of $45,039,984 for the previous
year). However, the Group’s loss, after taxation, was reduced to $10,214,295 (compared to
loss of $44,792,732 for the previous year) from the $8,594,215 share of profit ($775,184 in the
previous year) from the associated joint venture companies.
The Directors do not recommend payment of a dividend for the period.
OPERATING AND FINANCIAL REVIEW: The Business
of the Group
The Group organises the sale of fresh produce in the United Kingdom
under the Winfresh brand name. The principal produce traded by the
Group hitherto has been bananas. Produce is sourced predominantly
from the Windward Islands, but also from other Caribbean and South
American countries. Activities include purchasing ex works and
loading of the produce in the Windward Islands and shipment to the
United Kingdom as well as direct importation from other countries. In
the case of bananas, these are ripened at the Group’s specialised
ripening facility at Stansted and, finally, distribution and sale to
supermarket retailers and secondary wholesalers in the food markets.
In addition, the Group has been involved in:
•
The production and sales of bottled water and a range of processed foods and juices and beverages, and
•
Research and development into the production, marketing and distribution of non-dairy freezer fruit dessert
OPERATING AND FINANCIAL REVIEW: Business
Performance, Principal Risks and
Uncertainties
Notwithstanding the uplift in overall performance during the year,
the challenges with which the Group has been faced in recent years
have not abated. The competitive pressures in the retail sectors,
exacerbated by the deepening crisis in the financial sectors, continued
to keep market prices in check. However, the supply problems from
the Group’s principal sources in the Caribbean, which are largely
responsible for the loss from operations, continued to be significant
determinants of the Group’s performance. Hurricanes and crop
diseases are major threats and risks to the Group’s Caribbean supply
base and so they remain a source of uncertainty for the year to year
performance of the Group.
Total volume of bananas purchased from the Windwards Islands was
60.9% lower in the year under review than in the previous period.
The main contributing factors were the damages to farms caused
by Tropical Storm Tomas in October of 2010 and outbreak of Black
Sigatoka disease just as production was recovering from the ravages
of the tropical storm. The volume of bananas imported from the
Windward Islands accounted for just 16.9 % of the Group’s total
purchase, compared to 38.6 % in the previous year.
09
Gross profit from banana trading, before other direct costs
for ripening and distribution, was $12,129,138 or 38.7%
higher than in the previous trading year. However, total
ripening and distribution cost was £3,475,266 or 36.1%
higher than in the previous period, thereby completely
offsetting any gains in profit before overhead charges. The
increase in the ripening and handling costs, in particular,
is attributed to the additional labour and materials costs
incurred in the post-ripening processing of the bananas as
a consequence of the disease and fruit condition problems
originating from source, referred to above.
There was a 13.9% reduction in the total cost of goods
in the year under review, from the previous period. The
reduction was attributed to a 15.0% drop in throughput and
volumes sales. The reduction in the total cost of goods
(fruit) during the period suggested that average fruit cost
was broadly in line with that of the previous period.
Fairtrade bananas remain a significant part of the Group’s
product offer, with Fairtrade accounting for more than 85%
of its total banana volume sales in the period. Therefore,
the increases in the FLO minimum FOB prices of Fairtrade
bananas would inevitably have an impact on supply cost
or cost of sales, notwithstanding the overall reduction in
fruit cost.
The total value of sales for the year was down by 13.8%
from the previous period. The drop was very much in line
with the percentage reduction in the total cost of sales
but marginally lower than the percentage reduction in
fruit costs. This meant that average sales price was only
marginally higher than in the previous period.
The deregulation of the EU banana market and progressing
reduction of the import tariff have intensified the competitive
pressures and challenges in the market.
With the
Caribbean still as its predominant supply base, the Group
continued to experience supply problems and disruption
from those sources. The Group remained exposed to the
risks associated with the vulnerability of the Caribbean
banana production to frequent short term weather and
disease problems, thus making it more challenging for
the Group to face up to the competitive pressures of the
market. There is not only the risk of short term supply
shortages and the attendant problems but the additional,
and often significant, costs associated with handling and
dealing with problem fruit at the ripening facility.
10
The Group has put in place measures to deal with the short term
disruptions in supplies from its Caribbean sources whether as a
result of weather or disease problems and to mitigate losses. In
particular, the Group has established a comprehensive recording
and accounting system that will enable it to recoup some of the
losses arising from supply problems.
The business is also exposed to the risks and uncertainties
associated with unpredictably in movements of energy costs
and currency rates. The Group has made all necessary and
appropriate arrangements to reduce the exposure of the
business to those and any other known risks and to mitigate
potential losses.
The Group continued to focus on costs reduction and improving
operational efficiency to remain competitive and to deliver service
and value to its customers. To that end, the Group embarked
on significant reorganisation of its Windward Islands operations
with the aim of reducing overheads and administrative expenses.
The result was a $4,335,864 (21.0%) reduction in overheads in
the year under review compared to the previous year.
The Group’s plans to introduce new products on the market were
again pushed back while development work continued. The
Group recognized the risks and uncertainties associated with the
introduction of new products onto the market and so have taken
a cautious and systematic approach and followed all necessary
and appropriate steps, including timing, to minimize the risk of
failure.
Bananas still accounted for nearly 100% of the Group’s total
turnover in the period under review.
The Group completed the expansion of the production facility
at its Stansted site. However, the plans to install new banana
ripening chambers and to outfit one of the modules for food
processing and manufacturing have been put on hold.
Following the completion of the expansion of the Stansted facility,
the Group’s UK administration arm was moved to the new offices
at Stansted. However, the anticipated efficiency savings in UK
administration and overheads were not realised immediately
because of relocation costs.
Sunfresh resumed the production and sale of bottled water during
the year following the damages to equipment and disruption in
production caused by Tropical Storm Tomas in October 2010.
However, the plant experienced some teething problems
on restart and sales were slow on reintroduction into
the market. The introduction of juice beverages had to
be pushed back until all the initial issues were resolved.
Naturally, all of these have had a negative impact on the
performance of Sunfresh for year under review and its
contribution to the Group’s results.
Vincyfresh has developed and produced an impressive
range of processed food products but has not been able to
raise the scale of production or to generate sales beyond
the local market level. Raw materials or input supplies
have been a major factor for the setback but there are
other operational problem that contributed to the continued
sluggish performance, which contributed negatively to the
Group’s result in the year under review.
FUTURE DEVELOPMENTS: Objectives and
Strategy
The Fairtrade labelling Organisation (FLO) has announced
further increases in the minimum prices to be paid for
Fairtrade bananas. The new prices will come into effect
in January 2012. It is a matter of relief to the Group that
the increase in the ex-works price of Windward Islands
bananas was not the largest among the producer countries.
The Group is keen to see a narrowing of the price gap
between the Windwards product and those of other
supplying countries. The Group have expressed concerns,
in the past, at the hitherto widening gap between those
prices, which essentially put the Windwards product and
the Group at a competitive disadvantage in the market.
The Group will take all measures necessary to address
the issues affecting the performances of the subsidiary
undertakings and to ensure that their contributions to the
Group, over time, are in line with the level of investment by
the company in those enterprises. In particular, the Group
will:
a)Launch its Winfresh H2O brand of bottled water in
2012 in the OECS markets;
b)
Refit the Sunfresh plant, as necessary, to produce
juice and juice beverages from fresh fruit pulp, rather than from concentrates;
The Group directors are confident that the Group will be able
to achieve its objectives of taking most of its new range of
products to market 2012/13.
c)
d)
Refit the La Sagesse plant in Grenada to commence
production of premium juices using fresh fruit pulp;
Commence first stage fruit and food processing
operations in Dominica;
EMPLOYEES AND EMPLOYEE INVOLVEMENT
e)Ramp up production of the most promising of
the range of products by Vincyfresh;
f)Embark on a comprehensive marketing campaign
to promote and distribute the full range of Winfresh
branded products in the OECS markets;
g)Work closely with the Ministries of Agriculture in
the Windward Islands to coordinate agricultural
production planning to ensure regularity and adequacy of raw material supplies;
h)
Contract farmers to produce and supply specific crops to ensure reliability of raw material supplies
The Group will also advance its discussions with a third
party manufacturer with a view to reaching agreement and
concluding arrangements for manufacturing of its dairy-free
freezer fruit dessert on a significant scale. In particular, the
Group will:
a)Shelve its plans to manufacture the product at the
Stansted facility and avoid, at least for the time being, the capital investment in plant and equipment.
b)Have manufacturing, distribution, sales and marketing arrangements in place by the autumn of 2012 and to formally launch the product in the retail trade in the spring of 2013.
c)
Continue with its original plans to secure a listing with at least one of the major UK supermarket retailers with which to launch the product in the retail sector. This remains necessary in order to achieve the critical mass required for large scale production.
During the year the Group’s policy of providing employees
with information about the Group continued through
announcements and briefings in which the employees have
also been encouraged to present their suggestions and views
on the Group’s operations.
CREDITOR PAYMENT POLICY AND PRACTICE
The Group’s policy concerning the payment of trade payables
(creditors) is to agree the terms of payment with its suppliers
when agreeing the terms of each contract; to ensure that
suppliers are made aware of these terms by inclusion of the
relevant terms in supply contracts where appropriate; and to
pay its trade payables in accordance with those contractual
obligations. On average and based on the results for the entire
period, trade payables at the statement of financial position
date represented an average of 25 days worth of purchases
compared to 20 days in the previous period.
POST BALANCE SHEET EVENTS
Other than that which is disclosed at note 32 to the consolidated
financial statements, there were no significant events after
the balance sheet date affecting the Group or the company,
which have not been disclosed in the consolidated financial
statements.
AUDITORS
In accordance with the company’s articles, a resolution
proposing that Price Bailey LLP be appointed as auditors of
the company will be put to the General Meeting.
11
12
STATEMENT OF DISCLOSURE OF INFORMATION
TO AUDITORS
The Directors who held office at the date of approval of this
Directors’ report confirm that:
(a)So far as the Directors are aware, all relevant audit
information was disclosed to the Group’s auditors and
there is none of which they were uninformed.
(b)The Directors have taken all the steps that they ought
to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.
By the Order of the Board
Martina Edwin
COMPANY SECRETARY
Approved by the Directors on 15 July 2012
management team
from the left to right: Bernard Cornibert, CHIEF EXECUTIVE | Martina Edwin, Company SECRETARY |
Ashley James, Operations Director and Acting Finance Director | Roy Hugh, SALES & MARKETING DIRECTOR |
Philip Collins, Procurement Director | Dr Errol Reid, Technical Director
G.Llewellyn Gill & Co.
McVane Drive
Sans Soucis
P.O.Box 546,
Castries, St. Lucia.
Telephone (758) 451-9251
Facsimile (758) 451-9324
Email [email protected]
31 JULY 2012
Independent Auditor’s Report TO THE SHAREHOLDERS OF WINFRESH LIMITED
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of Winfresh Limited which comprise the consolidated balance sheet as of December 31,
2011 and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended and a summary of significant accounting
policies and other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting
Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We have conducted our audit in accordance with
International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend
on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2011
and of its financial performance and its cash flows for the year ended in accordance with International Financial Reporting Standards.
G Llewellyn Gill & Co
(for and on behalf of Price Bailey)
Chartered Accountants
Castries, Saint Lucia
AS OF DECEMBER 31, 2011
16
December 31
2011
$
January 1
2011
$
Assets
Current assets
Cash and cash equivalents (Note 6)
Held-to-maturity financial assets (Note 7)
Trade and other receivables (Note 8)
Inventories (Note 10)
Due from related parties (Note 11)
Deferred tax asset (Note 19)
9,380,019
1,233,120
24,562,013
7,953,475
4,439,375
524,415
13,634,661
1,194,305
22,650,056
8,083,852
5,890,547
246,969
48,092,417
51,700,390
976,008
930,756
2,534,606
47,300,729
56,742,144
2,936,329
904,080
904,377
2,566,311
34,987,304
54,239,162
2,936,329
159,512,989
148,237,953
2,797,074
21,650,693
2,087,419
21,130,617
24,447,767
23,218,036
Non-current liabilities
Loans and borrowings (Note 18)
28,278,187
6,341,100
Total liabilities
52,725,954
29,559,136
Non-current assets
Due from related parties (Note 11)
Other receivables (Note 12)
Intangible fixed assets (Note 13)
Property, plant and equipment (Note 14)
Investments in joint ventures and associates (Note 15)
Other investments (Note 16)
Total assets
Liabilities
(expressed in Eastern Caribbean dollars)
As of December 31, 2011
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Winfresh Limited
(Expressed in Easterb Caribbean Dollars)
Current liabilities
Bank overdraft (Note 6)
Trade and other payables (Note 17)
WINFRESH
LIMITED
17
January 1
2011
$
January 1
2011
20,000,000
303,217$
(12,742,515)
20,000,000
98,870,859
272,895
(12,742,515)
106,401,239
98,870,859
385,796
(11,756,710)
20,000,000
108,515,761
303,217
(11,756,710)
117,062,268
108,515,761
1,616,549
Total equity
Non-controlling interest (Note 25)
106,401,239
106,787,035
385,796
117,062,268
118,678,817
1,616,549
liabilities and shareholders' equity
Total equity
159,512,989
106,787,035
148,237,953
118,678,817
Total
liabilities
shareholders'
equity
Approved
by theand
Board
of Directors on
15 July 2012.
159,512,989
148,237,953
Equity
Share capital (Note 20)
Equity
Contributed capital and reserves
Currency translation reserve
Share capital
(Note 20)
Retained
earnings
Contributed capital and reserves
Currency translation reserve
Retained
earnings
Non-controlling
interest (Note 25)
(CONTINUED)
2011
$
December 31
2011
20,000,000
272,895$
Approved by the Board of Directors on 15 July 2012.
Winfresh Limited
.....................................
E Vitalis
Director
.....................................
E Vitalis
Director
........................................
J L Fletcher
Director
........................................
J L Fletcher
Director
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
December 31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Expressed in Eastern Caribbean Dollars)
January 2
2011
to
December 31
2011
$
January 3
2010
to
January 1
2011
$
Banana trading
Sales
213,398,228
242,500,372
(201,269,090)
(233,755,709)
12,129,138
8,744,663
Distribution and selling
(13,093,794)
(9,618,528)
Administrative and general expenses
(16,279,032)
(20,614,896)
(17,243,688)
(21,488,761)
(1,086,765)
-
141,567
(29,350,115)
1,279,462
5,798,892
(16,909,424)
(45,039,984)
8,594,215
775,184
Loss before income tax
(8,315,209)
(44,264,800)
Income tax expense (Note 28)
(2,088,183)
(527,932)
(10,403,392)
(44,792,732)
(8,150,620)
(2,252,772)
(44,659,281)
(133,451)
(10,403,392)
(44,792,732)
Cost of goods sold
Profit from banana trading
Finance costs (Note 21)
Other gains/(losses), net (Note 22)
Other income (Note 23)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Winfresh Limited
18
FOR THE YEAR ENDED DECEMBER 31, 2011
Loss before share of profit in joint ventures, associates
and income tax
Share of profit in joint ventures and associates (Note 15)
Loss for the year
Loss after taxation attributable to:
Owners of the company
Non-controlling interest
Loss for the year
Other comprehensive loss
Currency movement for the year
Share of joint venture actuarial losses on defined benefit
pension plans (Note 15)
Total comprehensive loss for the year
January 2
2011
to
December 31
2011
$
January 3
2010
to
January 1
2011
$
(10,403,392)
(44,792,732)
(985,805)
(1,658,055)
(3,649,633)
(5,288,385)
(13,047,252)
(53,730,750)
(10,794,480)
(2,252,772)
(53,597,299)
(133,451)
(13,047,252)
(53,730,750)
Winfresh Limited
Owners of the company
Total comprehensive loss attributable to:
19
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED DECEMBER 31, 2011
20
Share
capital
Balance at January 3, 2010
$
20,000,000
Contributed
Currency
Retained
Total
capital translation
earnings
reserves
$
$
$
$
(8,107,077)
170,659,567
336,908
158,429,736
Comprehensive loss:
Loss for the year after taxation
Share of actuarial loss of joint
venture's defined benefit pension
schedule
-
-
- (44,792,732) (44,792,732)
- (5,288,385) (5,288,385)
Total comprehensive loss
-
-
- (50,081,117) (50,081,117)
Other comprehensive loss:
-
-
(3,649,633)
Total comprehensive income
-
-
(3,649,633) (50,081,117) (53,730,750)
Transactions with owners:
Amortisation of contributed capital
-
(33,691)
-
-
33,691
(3,649,633)
-
20,000,000
303,217 (11,756,710) 108,382,310 116,928,817
20,000,000
303,217 (11,756,710) 108,515,761 117,062,268
Attributable to:
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Winfresh Limited
Owners of the parent company
1,616,549
118,678,817
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE PERIOD ENDED DECEMBER 31, 2011
21
-
-
- (10,403,392) (10,403,392)
(1,658,055) (1,658,055)
-
-
- (12,061,447) (12,061,447)
Other comprehensive income:
-
-
(985,805)
Total comprehensive loss
-
-
(985,805) (12,061,447) (13,047,252)
Transactions with owners:
Amortisation of contributed capital
-
(30,322)
Balance at December 31, 2011
-
-
30,322
(985,805)
-
20,000,000
272,895 (12,742,515) 96,351,185 103,881,565
20,000,000
272,895 (12,742,515) 98,870,859 106,401,239
Attributable to:
Owners of the parent company
385,796
106,787,035
Comprehensive loss:
Loss for the year after taxation
Share of actuarial loss of joint
venture's defined benefit pension
schedule
$
20,000,000
Winfresh Limited
Contributed
Currency
Retained
Total
capital translation
earnings
reserves
$
$
$
$
303,217 (11,756,710) 108,382,310 116,928,817
Share
capital
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
December 31
2011
$
January 1
2011
$
Cash flows from operating activities
Loss for the year
(8,315,209)
(44,264,800)
Adjustments for:
Depreciation (Note 14)
Impairment of goodwill
Unrealised exchange gain
Gain on disposal of property, plant and equipment
Loss on disposal of trademarks
Interest income
Share of profit in joint ventures and associates (Note 15)
Provision for diminution in value of investments (Note 15)
Discount on acquisition
Dividend income
Finance costs
3,754,313
27,575
3,116
19,355
(403,373)
(8,594,215)
1,085,089
2,341,671
800,000
217,913
(220,768)
(155,612)
(775,184)
35,769,219
(699,530)
(4,126,400)
70,840
(12,423,349)
(11,042,651)
(1,559,454)
72,312
1,379,244
215,144
5,149,105
5,654,602
107,637
(8,879,087)
(12,316,103)
(9,010,394)
2,440
(1,085,088)
(207,422)
(70,840)
Net cash used in operating activities
(13,398,751)
(9,288,656)
Cash flows from investing activities
Acquisition of subsidiary, net of cash
Payments to acquire intangible fixed assets
Payments to acquire property, plant and equipment
Increase in other investments
Interest received
Dividends received
Proceeds from disposal of property, plant and equipment
(15,411,079)
(38,815)
403,373
2,096,150
166,388
(957,726)
(803,226)
(6,242,646)
(9,386)
155,612
4,126,400
56,331
Net cash used in investing activities
(12,783,983)
(3,674,641)
Operating loss before working capital changes
(Increase)/decrease in trade and other receivables
Decrease in inventories
Decrease in amounts due from related parties
Increase/(decrease) in trade and other payables
Cash used in operating activities
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
Winfresh Limited
22
Income tax refund/(paid)
Interest paid
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
6,341,100
-
Net cash generated from investing activities
21,218,437
6,341,100
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
(4,964,297)
11,547,242
(6,622,197)
18,169,439
6,582,945
11,547,242
Cash and cash equivalents at end of year (Note 6)
21,178,406
40,031
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash flows from financing activities
New bank loan
Loan from related party
Winfresh Limited
January 1
2011
$
December 31
2011
$
23
DECEMBER 31, 2011
(Expressed in Eastern Caribbean Dollars) Delivering wholesomeness value quality for healthy growth
24
General information
Incorporation
These consolidated financial statements include the financial statements of Winfresh Limited (the
Company) and its subsidiary companies, Winfresh UK Limited, Winfruit Limited, Vincyfresh Limited and
Sunfresh Limited.
Winfresh Limited was incorporated under the laws of Saint Lucia and continued under the Company's
Act, 1996. The Company commenced trading effective January 1, 1995 with the takeover of the
operations formally undertaken by Windward Islands Banana Growers' Association ("WINBAN").
Winfresh (UK) Limited was incorporated under the Companies Act 1985 of the United Kingdom and
commenced trading in May 1994 and is a wholly owned subsidiary of Winfresh Limited.
Winfruit Limited was incorporated under Companies Act 2006 of the United Kingdom and commenced
trading in December 2008. Winfresh (UK) Limited has a 75% holding of the ordinary shares of the
company.
Vincyfresh Limited was incorporated under the 1994 Companies Act of Saint Vincent and the Grenadines
as Lauders Agro Processors Inc. and commenced trading in October 2007. Winfresh Limited has a 60%
holding of the Class "A" common shares of the company.
Sunfresh Limited was incorporated under the laws of Saint Lucia and continued under the Company's
Act, 1996 and commenced trading in January 2011. Winfresh Limited has a 65% holding of the ordinary
shares of the company.
Subsequent to the statement of financial position date on 21 May 2012 the company acquired the
remainder of the shareholdings in one of its subsidiary companies, Sunfresh Limited. Consequently,
Sunfresh Limited is now a fully owned subsidiary of the company.
The Company's registered office is located at 99 Chaussee Road, Castries, Saint Lucia.
Winfresh Limited
1
Principal activity
The principal activity of the Group is the importation, marketing and distribution of bananas and fresh
produce, and processing, packaging and distribution of water and fruit juices.
Shareholdings
The shareholdings of the Company are the Governments of the four Windward Islands: Saint Lucia,
Dominica, Saint Vincent and the Grenadines and Grenada and the banana grower associations ("BGAs")
of the Windward Islands: Dominica Banana Marketing Corporation ("DBMC"), St Vincent Banana
Growers' Association ("SVBGA") and the Grenada Banana Co-operative Society ("GBCS").
The Group's financial year represents a 52 week period ending December 31, 2011 (January 1, 2011 52 week period ending January 1, 2011).
DECEMBER 31, 2011
(Expressed
in Eastern Caribbean value
Dollars) quality for healthy growth
Delivering
wholesomeness
Basis of preparation
(a)
Statement of compliance
These Consolidated financial statements have been prepared in accordance with international Reporting
Standards (IFRS).
(b)
Basis of measurement
The consolidated financial statements have been prepared under the historical cost convention except for
financial assets that have been measured at fair value.
(c)
Functional and presentation currency
Items included in the financial statements of each Group's entities are measured using the currency of the
primary economic environment in which the entity operates ("the functional currency"). The Group's
functional currencies include Eastern Caribbean dollars (EC$), and the UK pound (GBP). The
consolidated financial statements are presented in Eastern Caribbean Dollars (EC$), which is the Group's
presentation currency.
(d)
Use of estimates and judgements
The preparation of consolidated financial statements in conformity with IFRS requires management to
make judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and assumptions are reviewed on an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
In particular, information about assmptions and estimation uncertainties that have a significant risk of
resulting in a material adjustment with the next accounting period are included in the following notes:
(e)
Standards and amendments effective and relevant to the Company
Note 3
Note 3
Note 5
The following standards and amendments to existing standards have been published and are mandatory
for the Company's accounting period beginning on or after January 2, 2011 or later periods are relevant to
the Company.
Effective from January 2, 2011:
IAS 34
IFRS 1
Interim Financial Reporting - Amendments resulting from May 2010 Annual Improvements to
IFRSs
First-time adoption of International Financial Reporting Standards - Amendments resulting from
May 2010 Annual Improvements to IFRSs.
Effective from July 1, 2011
IFRS 1
IFRS 1
IFRS 7
First-time adoption of International Financial Reporting Standards - Replacement of 'fixed
dates' for certain exceptions with 'the date of transition to IFRSs'
First-time adoption of International Financial Reporting Standards - Additional exemption for
entities ceasing to suffer from severe hyperinflation
Financial Instruments: Disclosures - Amendments enhancing disclosures about transfers of
financial assets
Winfresh Limited
Allowances for impairment losses
Estimated useful lives of plant property and equipment
Determination of fair values of financial assets
*
*
*
2
25
DECEMBER 31, 2011
26
2
Basis of preparation
(e)
(continued)
Standards and amendments effective and relevant to the Company (continued)
At the date of authorisation the following Standards and Interpretations, which have not yet been applied
in these financial statements, were in issue but not yet effective.
IAS 1
IAS 1
IAS 12
IAS 16
IAS 19
IAS 27
IAS 28
IAS 32
IAS 32
IAS 34
IFRS 1
IFRS 1
IFRS 7
IFRS 7
Winfresh Limited
IFRS 9
IFRS 9
IFRS 10
IFRS 10
IFRS 11
IFRS 11
IFRS 12
IFRS 12
IFRS 13
IFRIC 20
Presentation of Financial Statements - Amendments to revise the way other comprehensive
income is presented
Amendments resulting from Annual Improvements 2009-2011 Cycle (comparative information)
Income Taxes - Limited scope amendment (recovery of underlying assets)
Amendments resulting from Annual Improvements 2009-2011 Cycle (Servicing equipment)
Employee Benefits - Amended Standard resulting from the Post-Employment Benefits and
Termination Benefits projects
Consolidated and Separate Financial Statements
Investments in Associates and Joint Ventures
Financial Instruments: Presentation - Amendments to application guidance on the offsetting of
financial assets and financial liabilities
Amendments resulting from Annual Improvements 2009-2011 Cycle (tax effect of equity
distributions)
Amendments resulting from Annual Improvements 2009-2011 Cycle (interim reporting of
segment assets)
Amendments for government loan with a below-market rate of interest when transitioning to
IFRSs
Amendments resulting from Annual Improvements 2009-2011 Cycle (repeat application,
borrowing costs)
Financial Instruments: Disclosures - Amendments enhancing disclosures about offsetting of
financial assets and financial liabilities.
Financial Instruments: Disclosures - Amendments requiring disclosures about the initial
application of IFRS 9
Financial Instruments - Classification and measurement of financial assets
Financial Instruments - Accounting for financial liabilities and derecognition
Consolidated Financial Statements
Amendments to transitional guidance
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
Stripping Costs in the Production Phase of a Surface Mine
The adoption of these standards is not expected to have a significant impact on the Company's nonconsolidated financial statements.
DECEMBER 31, 2011
27
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been constantly applied by the Group entities unless otherwise stated.
Consolidation
(a)
Subsidiaries
Subsidiaries are all entities over which the Group has power to govern the financial and operating
policies generally accompanying a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the
Group. The cost of an acquisition is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed as at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair
value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost
of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is
recognised directly in the consolidated statement of comprehensive income.
(b)
Associates
Associates are entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investment in
associates is accounted for by the equity method of accounting and initially recognised at cost.
The Group's share of its associates' post-acquisition profits or losses is recognised in the
consolidated statement of comprehensive income, and its share of post-acquisition movements in
reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of
the investment. When the Group's share of losses in an associate equals or exceeds its interest in
the associate, including any unsecured receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate
Unrealised gains on transactions between the Group and its associate are eliminated to the extent
of the Group's interest in the associate. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred.
Winfresh Limited
Inter-company transactions, balances and unrealised gains on transactions between group
companies are eliminated. Unrealised losses are also eliminated but are considered an impairment
indicator of the asset transferred. Accounting policies of subsidiaries are consistent with the policies
adopted by the Group.
Summary of significant accounting policies
3
DECEMBER 31, 2011
28
3
(continued)
Consolidation (continued)
(c)
Joint ventures
A joint venture exists where the Group has a contractual arrangement with one or more parties to
undertake activities typically, however not necessarily, through entities that are subject to joint
control. The Group recognises interests in a jointly controlled entity using the equity method. The
Group's share of the results of joint ventures is based on financial statements made up to a date not
earlier than three months before the date of the balance sheet. Intragroup gains on transactions are
eliminated to the extent of the Group's interest in the investee. Intragroup losses are also eliminated
unless the transaction provides evidence of an impairment of the asset transferred.
Non-controlling interests
The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent
and to the non-controlling interests in proportion to their relative ownership interests.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held with banks and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the consolidated statement of financial
positioin.
Investments
The Group classifies its investments as loans and receivables. The classification depends on the purpose
for which the investments were acquired. Management determines the classification of its investments at
initial recognition and re-evaluates this designation at every reporting date.
Winfresh Limited
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. Loans and receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest rate method, less provision for
impairment. A provision for impairment of loans and receivables is established when there is objective
evidence that the Group will not be able to collect all amounts due to it according to their original terms.
Regular way purchases and sales of investments are recognised on trade-date - the date on which the
Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus, in the
case of all financial assets not carried at fair value through the consolidated statement of comprehensive
income, transaction costs that are directly attributable to their acquisition. Investments are derecognised
when the rights to receive cash flows from the investment have expired or where they have been
transferred and the Group has also transferred substantially all risks and rewards of ownership.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at fair value less
provision for impairment. A provision for impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all amounts due according to the original
terms of the receivables. The amount of the provision is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the effective interest rate.
The amount of the provision is recognised in the consolidated statement of comprehensive income.
DECEMBER 31, 2011
Delivering
wholesomeness value quality for healthy growth
Inventories
Inventories, which are comprised of shipments of bananas in transit, bananas held in storage at a
ripening depot and packaging materials, are stated at the lower of cost and net realisable value. Cost for
bananas is determined by reference to the invoiced price together with the delivery costs incurred in
shipping the bananas to the United Kingdom and to a ripening depot. Cost for packaging materials is
determined using the weighted average basis. Net realisable value is the estimated selling price in the
ordinary course of business less applicable variable selling expenses.
Property, plant and equipment
Land and buildings comprise warehouses and offices. All assets are stated at historical cost less
depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged
to the consolidated statement of comprehensive income during the financial year in which they are
incurred. Increases in the carrying amount arising on revaluation of land and buildings are credited to
other reserves in shareholder's equity. Decreases that offset previous increases of the same asset are
charged against other reserves directly in equity; all other decreases are charged to the consolidated
statement of comprehensive income. Each year, the difference between depreciation based on the
revalued carrying amount of the asset charged to the consolidated statement of comprehensive income
and depreciation based on the asset's original cost is transferred from 'other reserves' to 'retained
earnings'.
Buildings - (straight-line)
Plant and machinery - (straight-line)
Office furniture and equipment - (straight-line and reducing balance)
Computer equipment - (straight-line)
Motor vehicles - (straight-line)
2%
15% - 20%
25% - 33%
25% - 33%
25%
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at each balance
sheet date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
are included in the consolidated statement of comprehensive income.
Winfresh Limited
Land is not depreciated. Depreciation on other assets is calculated using the straight-line and reducing
balance methods to allocate their costs or revalued amounts to their residual values over their estimated
useful lives, as follows:
(continued)
3
29
DECEMBER 31, 2011
30
3
(continued)
Impairment of non-financial assets
Assets that have an indefinite useful life, for example land, are not subject to amortisation and are tested
annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating units).
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources will be required to settle the obligation, and a
reliable estimate of the amount can be made.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the consolidated statement of comprehensive income over the
period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least twelve months after the balance sheet date.
Winfresh Limited
Deferred income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred income tax is not accounted for if it arises from initial recognition of an
asset or liability in an transaction other than a business combination that, at the time of the transaction,
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the balance sheet date and are expected
to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except where the timing of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the foreseeable future.
Share capital
Ordinary shares are classified as equity. Preference shares which have discretionary dividend obligations
and are not redeemable at a specific date or at the option of the shareholders, are also classified as
equity.
Dividend distribution
Dividend distribution to the group company's shareholders is recognised as a liability in the Group's
consolidated financial statements in the period in which the dividends are approved by the company's
shareholders.
Contributed capital
Property, plant and equipment transferred and donated to the Group is included in property, plant and
equipment at cost or valuation, and the corresponding credit is recorded in a contributed capital reserve.
This contributed capital reserve is amortised to retained earnings on a straight line basis using the same
rates used to provide depreciation on the applicable assets.
DECEMBER 31, 2011
31
(continued)
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the consolidated statement of comprehensive income on a straight-line
basis over the period of the lease.
Employee benefits
Pension obligations
The subsidiary company, Winfresh (UK) Limited, is party to a multi-employer defined benefit pension
scheme. The actuaries of the scheme have confirmed to the directors that the company is unable to
identify its share of the underlying assets and liabilities of the scheme on a reasonable consistent basis.
Accordingly, there is insufficient information to use defined benefit accounting. In accordance with IAS 19
revised, the scheme is accounted for as if it were a defined contribution pension scheme.
A defined contribution pension scheme is a pension plan under which the company pays fixed
contributions to a separate entity, typically being a pension fund. The company has no legal or
constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in the current and prior periods.
The assets of the scheme are held in a separate independently administered fund. The subsidiary's
contributions are charged to the statement of income in the year to which they relate.
a.
Banana trading
Banana trading income (including fees, recoveries, sales and commissions) is recognised upon
delivery of products and customer acceptance.
b.
Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
c.
Other income
Other income is recognised on an accruals basis.
d.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Foreign currency translation
a.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities are recognised in the consolidated statement of comprehensive income.
- 18 -
Winfresh Limited
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Group's activities. Revenue is recognised as follows:
3
DECEMBER 31, 2011
32
3
(continued)
Foreign currency translation (continued)
b.
Group companies
The results and financial position of all of the Group's entities that have a functional currency
different from the presentational currency are translated into the presentational currency as follows:
(i)
assets and liabilities for each balance sheet presented are translated at the closing rate at the date
of that balance sheet;
(ii)
income and expenses for each statement of comprehensive income are translated at the average
exchange rates for the financial period (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions); and
(iii) all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations and of borrowings are taken to shareholder's equity. When a foreign operation is sold,
exchange differences that were recorded in equity are recognised in the consolidated statement of
comprehensive income as part of the gain or loss on sale.
Comparatives
Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or
disclosed with comparative information.
4
Winfresh Limited
Financial risk management
Financial risk factors
The Group's activities expose it to variety of financial risk: market risk (including currency risk and fair
value risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise the potential
adverse effects on the Group's financial performance.
Risk management
The Directors are charged with the overall responsibility of establishing and monitoring the Group's risk
management policies and processes. The Group's overall risk management policies and processes
focus on identifying, analysing and monitoring all potential risks such as foreign exchange risk, interest
rate risk and credit risk that are faced by the Group. All treasury transactions are reported to and
approved by the Directors.
DECEMBER 31, 2011
33
(continued)
a.
Market risk
(i)
Foreign exchange risk
The Group trades internationally and is exposed to foreign exchange rate risk from various
currency exposures, primarily with respect to the US dollar and Sterling/UK pound. The exchange
rate of the Eastern Caribbean dollar (EC$) to the United States dollar (US$) has been formally
pegged at EC$2.70 = US$1.00 since July 1976. Foreign exchange risk arises when future
commercial transactions or recognised assets or liabilities are nominated in a currency that is not
the entity functional currency.
The Group purchases its bananas and fresh produce in foreign currency and forward currency
contracts are occasionally used for the purchases. All costs denominated in foreign currency are
settled using the spot rate. There were no outstanding forward currency contracts at the balance
sheet date.
The following table summarises the Group's exposure to foreign currency exchange rate risk at
December 31, 2011
US$
$
Stg
$
Euro
$
Total
$
52,912
516,194
8,749,177
61,736
9,380,019
Financial assets
Cash and cash
equivalents
Investments: Loans and
receivables
Trade and other receivables
Due from related parties
1,233,120
-
-
-
1,233,120
2,122,346
5,415,383
851,494
-
21,588,173
-
-
24,562,013
5,415,383
Total financial assets
8,823,761
1,367,688
30,337,350
61,736
40,590,535
US$
$
Stg
$
Euro
$
Total
$
9,302,430
3,724,142
3,198,170
20,961,500
15,534,279
5,433
30,263,930
22,462,024
Total financial liabilities
13,026,572
3,198,170
36,495,779
5,433
52,725,954
Net balance sheet financial
position
(4,202,811) (1,830,482)
(6,158,429)
EC$
$
Financial liabilities
Bank borrowings and overdraft
Trade and other payables
56,303 (12,135,419)
Winfresh Limited
At December 31, 2011
EC$
$
Risk management
4
DECEMBER 31, 2011
34
4
Risk management
a.
(continued)
Market risk (continued)
At January 1, 2011
Total financial assets
Total financial liabilities
Net balance sheet financial
position
Winfresh Limited
11,648,793
5,468,764
(5,609,285) (4,771,211)
6,039,508
697,553
27,909,399
(19,178,640)
8,730,759
151,070 45,178,026
- (29,559,136)
151,070
15,618,890
(i)
Foreign exchange risk (continued)
At December 31, 2011 if the EC$ had weakened/strengthened by 10% against the Stg/UK pound
with other variables held constant, post tax profit for the year would have been $615,843 (January
1, 2011 - $873,076) higher/lower, mainly as a result of foreign exchange gains / losses on
translation of Stg/UK pound denominated bank balances trade receivables and trade payables.
(ii)
Cash flow and fair value interest rate risk
The Group has interest bearing assets at fixed interest rates which expose the Group to fair value
interest rate risk. The Group has determined that the fair value interest rate risk was not significant
at the balance sheet date.
b.
Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions
and investments classified as loans and receivables; as well as credit exposure to customers,
including trade receivables, balances due from related parties and committed transactions.
The Group manages its exposure to this risk by applying contractual terms that have been
approved by the Directors to the amount of credit exposure to any one counterparty. It also
employs strict minimum credit worthiness criteria as to the choice of counterparty, thereby ensuring
that there is no significant concentration of credit risk.
The Group assesses the credit quality of customers on a case by case basis taking into account
their financial position, past experience and other factors. Management does not set individual
credit limits. If customers are independently rated, these ratings are used. If there is no
independent rating, management assesses the credit quality of the customer, taking into account
their financial position, past experience and other factors.
The amount of the Group's maximum exposure to credit risk is indicated by the carrying amount of
its financial assets at the balance sheet date. Management does not foresee any losses from nonperformance by these counterparties as at December 31, 2011 and January 1, 2011.
The credit quality of the financial assets that are neither past due nor impaired (fully performing)
can be assessed by reference to external credit ratings (if available) or to historical information
about counterparty default rates. The independent ratings are based on publicly available ratings
supplied by Standard & Poor, CRIF Decision Solutions Limited and Fitch Ratings Limited.
DECEMBER 31, 2011
35
b.
(continued)
Credit risk (continued)
Bank
Ratings
December
31
2011
$
Bank 1
Bank 2
Bank 3
Bank 4
Bank 5
B
A-1
BBB+
A-1
AA
Unrated
220,922
7,391,532
1,448,691
105,759
113,062
94,884
Cash and cash equivalents:
January 1
Ratings
2011
$
BB
AA A
A
AA
Unrated
475,874
3,843,565
8,855,541
182,493
87,748
181,176
9,374,850
13,626,397
The rest of the balance sheet item cash and cash equivalent is cash in hand.
Customers
Ratings
December
31
2011
$
1
2
3
Unrated
Unrated
A-
902,254
2,726,907
1,772,052
Unrated
5,401,213
15,797,263
21,198,476
c.
January 1
Ratings
A-3
B
AUnrated
2011
$
7,599,364
2,410,299
892,734
10,902,397
3,048,622
13,951,019
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the ability of funding
through an adequate amount of committed credit facilities.
Bank overdrafts and trade and other payables are due within twelve months based on the
remaining period at the balance sheet date to the contractual maturity date.
The contractual undisclosed cash flows of the bank overdrafts and trade payables approximate the
carrying amounts at the balance sheet date as the impact of discounting is not significant.
Winfresh Limited
Trade receivables - neither past due nor impaired
Risk management
4
DECEMBER 31, 2011
36
4
Risk management
d.
(continued)
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and
to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders or return capital to shareholders.
5
Determination of fair values
A number of the Group's accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities.
Fair values have been determined for
measurement and/or disclosure purposes based on the following methods. Where applicable, further
information about the assumptions made in determining fair values is disclosed in the notes specific to
that asset or liability.
The fair value of property, plant and equipment recognised as a result of a business combination is the
estimated amount for which a property could be exchanged on the date of acquisition between a willing
buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had
acted knowledgeably. The fair value of items of plant, equipment, fixtures and fittings is based on the
market approach and cost approaches using quoted market prices for similar items when available and
replacement cost when appropriate. Depreciation replacement cost estimates reflect adjustments for
physical deterioration as well as functional and economic obsolescence.
Winfresh Limited
Goodwill
Goodwill is recorded at its fair value, this being the amount in excess of the fair market value of the
separately identifiable assets of teh subsidiary company that was acquired during the year. In future
periods, goodwill be assessed for impairment.
The fair values of trade and other receivables approximate their carrying amounts due to the short term
nature of the related transactions.
Cash and cash equivalent
Due to the short term nature of the transactions, the fair values of cash and cash equivalents
approximate their carrying amounts at the reporting date.
Due to the short term nature of the related transactions, the fair values and other payables approximate
their carrying amounts at the reporting date.
DECEMBER 31, 2011
37
Cash and cash equivalents
December 31
2011
$
Cash at bank and in hand
9,380,019
January 1
2011
$
13,634,661
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the
following:
Cash at bank and in hand
Bank overdraft
January 1
2011
$
9,380,019
(2,797,074)
13,634,661
(2,087,419)
6,582,945
11,547,242
Held-to-maturity financial assets
Term deposit
1,233,120
January 1
2011
$
1,194,305
Held-to-maturity financial assets comprise term deposits with banks. The weighted average effective
interest rate on term deposits is 3% and 3.25% (January 1, 2011 - 3% and 3.25%) per annum. Term
deposits mature within one year.
Winfresh Limited
December 31
2011
$
7
December 31
2011
$
6
DECEMBER 31, 2011
(Expressed in Eastern Caribbean Dollars)Delivering wholesomeness value quality for healthy growth
38
December 31
2011
$
January 1
2011
$
Trade receivables
Less: provision for impairment of trade receivables (Note 9)
21,838,119
(639,643)
19,214,484
(639,252)
Trade receivables - net
21,198,476
18,575,232
2,353,916
1,009,621
2,718,460
1,356,364
24,562,013
22,650,056
Other receivables
Prepayments
The credit quality of trade receivables is summarised as follows:
December 31
2011
$
January 1
2011
$
Neither past due nor impaired
Past due but not impaired
Impaired
16,608,788
4,589,688
639,643
13,951,019
4,624,213
639,252
Gross
21,838,119
19,214,484
The ageing of trade receivables that are past due and not impaired is as follows:
Winfresh Limited
8
December 31
2011
$
Up to 1 month
1 to 2 months
Over 2 months
January 1
2011
$
4,306,934
127,194
155,560
4,318,805
113,408
192,000
4,589,688
4,624,213
Trade receivables that are less than three months past due are not considered impaired. These relate to
a number of independent customers for whom there is no recent history of default.
DECEMBER 31, 2011
(Expressedwholesomeness
in Eastern Caribbean value
Dollars) quality for healthy growth
Delivering
The ageing of trade receivables that are impaired is as follows:
Over 2 months
(continued)
December 31
2011
$
639,643
January 1
2011
$
639,252
The impaired receivables mainly relate to customers who are in unexpectedly difficult economic
positions. Management has reviewed the position and determined that a part of these receivables is
expected to be recovered.
Other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables
mentioned above. The Group does not hold any collateral as security.
The movement in the provision for impairment of receivables is as follows:
December 31
2011
$
January 1
2011
$
At beginning of year
Release provision
Provision made during the year
639,252
(7,960)
8,351
854,543
(695,602)
480,311
At end of year
639,643
639,252
The creation and release of the provision for impaired receivables has been included in general and
administrative expenses in the consolidated statement of comprehensive income. Amounts charged to
the allowance account are generally written off, when there is no expectation of recovering additional
cash.
10
Inventories
Raw materials
Chemicals and additives
Packaging materials
Finished goods
Other supplies
December 31
2011
$
January 1
2011
$
212,331
988,172
6,752,972
-
3,823
573
1,038,956
7,021,677
18,823
7,953,475
8,083,852
Winfresh Limited
Provision for impairment of trade receivables
9
8
39
DECEMBER 31, 2011
40
11
Related party transactions and balances
The Group is related to the four banana grower associations (BGAs) and the Governments of the
Windward Islands (Note 1) which together own 100% of the Company's shares. The Group owns 50% of
Windward Isles Banana Company Holdings (Jersey) Limited.
The following transactions were carried out with the above mentioned related parties:
December 31
2011
$
Purchases of goods and services
Purchases of bananas from BGAs
21,265,287
January 1
2011
$
59,389,036
Purchases from related parties were carried out on commercial terms and conditions and at market
prices.
December 31
2011
$
Key management compensation
Salaries and other short-term benefits
Year-end balances arising from sales / purchases of goods / services:
Due from/(due to) related parties
Winfresh Limited
Current
St. Lucia Banana Corporation
Government of Saint Lucia
National Properties Food City Inc.
Non-current
Grenada Banana Co-operative Society
Dominica Banana Marketing Corporation
Sunsmart Beverages Inc.
3,002,323
December 31
2011
$
January 1
2011
$
4,015,434
January 1
2011
$
(9,777)
4,439,375
-
1,435,742
4,439,375
15,430
4,429,598
5,890,547
786,780
121,473
67,755
782,607
121,473
-
976,008
904,080
Balances with related parties are unsecured, non-interest bearing and have no fixed terms of repayment.
During previous financial year the company had accepted, in principle, an offer from the Government of
Saint Lucia for the settlement of the amount due by way of transfer of land valued at $4,439,375. The
transfer is still being negotiated at the balance sheet date.
DECEMBER 31, 2011
41
Other loan
December 31
2011
$
January 1
2011
$
Movement during the year
904,377
26,379
904,377
At end of year
930,756
904,377
Winfresh Limited
Included in the above balance is a loan of $886,583 (at January 1, 2011, - $845,480), which bears
interest at LIBOR rate plus 3% per annum and is stated at its fair value as at the balance sheet date.
Other receivables
12
DECEMBER 31, 2011
42
13
Intangible fixed assets
Patents
$
Goodwill
$
Trademarks
$
Total
$
423
2,546,996
19,302
2,566,721
At January 1, 2011
423
2,546,996
19,302
2,566,721
At January 1, 2011
Exchange differences
Disposals
423
(3)
-
2,546,996
(12,763)
-
19,302
(19,302)
2,566,721
(12,766)
(19,302)
420
2,534,233
-
2,534,653
Amortisation
At January 1, 2011
Charge for the period
25
-
385
410
25
-
385
410
At January 1, 2011
Amortisation on disposals
25
22
-
385
(385)
-
410
(385)
22
47
-
-
47
Net book value
373
2,534,233
-
2,534,606
At January 1, 2011
398
2,546,996
18,917
2,566,311
At January 2, 2010
-
-
-
-
Cost
At January 2, 2011
Additions
Winfresh Limited
The goodwill arises on the acquisition of Winfruit Limited by Winfresh (UK) Limited.
DECEMBER 31, 2011
43
Land and
buildings
Plant and
machinery
Office
furniture
and
equipment
Computer
equipment
Motor
vehicles
Total
$
$
$
$
$
$
$
246,659 24,899,903
(607,036)
1,808,850
(223,141)
118,717
(15,641)
-
6,217,660
(48,873)
6,120,026
5,100
(11,349)
4,757,160
(34,889)
288,566
99,324
-
3,332,192
(25,462)
237,262
-
1,419,384 40,972,282
(8,540)
(724,800)
441,064
8,895,768
(14,928)
(41,928)
At 1 January 2011
7,877
26,220,434
12,282,564
5,110,161
3,543,992
1,836,980
49,002,008
At 2 January 2011
Additions
Adjustments to costs
Disposals
7,877
-
26,220,434 12,282,564
(150,411)
(8,808)
11,908,881
2,596,694
(118,717)
(5,199)
(81,000)
5,110,161
4,053
1,279,264
(99,324)
(14,100)
3,543,992
1,718
269,905
(94,451)
(17,650)
1,836,980 49,002,008
701
(152,747)
398,442 16,453,186
(467,439)
(785,130)
(346,965)
(459,715)
At 31 December 2011
7,877
37,860,187
14,784,251
6,280,054
3,703,514
1,421,719
64,057,602
Depreciation
At 3 January 2010
Adjustment
7,877
-
367,858
118,717
408,404
4,153,766
5,100
982,606
3,356,164
99,324
526,250
2,248,949
488,438
963,869
287,382
11,098,483
223,141
2,693,080
At 1 January 2011
7,877
894,979
5,141,472
3,981,738
2,737,387
1,251,251
14,014,704
At 2 January 2011
Adjustments to depreciation
On disposals
7,877
-
894,979
(56,190)
765,173
5,141,472
(5,199)
1,678,803
3,981,738
(99,324)
(5,828)
611,020
2,737,387
(94,451)
(11,365)
440,109
1,251,251 14,014,704
(467,439)
(722,603)
(272,348)
(289,541)
259,208
3,754,313
At 31 December 2011
7,877
1,603,962
6,815,076
4,487,606
3,071,680
770,672
16,756,873
Net book value
At 31 December 2011
-
36,256,225
7,969,175
1,792,448
631,834
651,047
47,300,729
At 1 January 2011
-
25,325,455
7,141,092
1,128,423
806,605
585,729
34,987,304
At 2 January 2010
238,782
24,532,045
2,063,894
1,400,996
1,083,243
455,515
29,774,475
Winfresh Limited
Cost
At 3 January 2010
Additions
Transfer
Disposals
Leasehold
improvements
14
DECEMBER 31, 2011
44
15
Investments in joint ventures and associates
December 31
2011
$
January 1
2011
$
Additions during the year
Associate becoming a subsidiary during the year
Share of profit in joint ventures and associates
Share of tax in joint ventures and associates
Share of actuarial losses
Dividends
Currency translation adjustment
Provision for diminution in value
54,239,162 100,994,537
(2,579,364)
8,594,215
775,184
(2,379,130)
(526,540)
(1,658,055)
(5,288,385)
(2,096,150)
42,102
(3,367,051)
- (35,769,219)
At end of year
56,742,144
54,239,162
The Group's share of the results of its joint ventures and its share of assets and liabilities are as follows:
Assets
$
Winfresh Limited
Liabilities
$
Revenues
$
At 31 December 2011
Windward Isles Banana Company (UK) Limited
29,471,869
88,667,145
947,460
56,795,184
119,379,370
At 31 December 2010
Windward Isles Banana Company (UK) Limited
31,392,672
93,072,552
1,025,145
65,175,940
99,369,825
Windward Isles Banana Company (UK) Limited ("WIBUK") and Windward Isles Banana Company
Holdings (Jersey) Limited ("WIBJ") are incorporated in the United Kingdom and Jersey respectively, on a
50% joint-venture basis with Fyffes Plc for the acquisition of the banana operating division of the Geest
Group of Companies.
DECEMBER 31, 2011
45
Other investments
December 31
2011
$
January 1
2011
$
Additions during the year
2,936,329
-
2,936,329
-
At end of year
2,936,329
2,936,329
At December 31, 2010, Vincyfresh Limited, one of the group companies, invested in a property valued at
$2,936,329 located at Diamond to operate a snack food factory. On February 28, 2011 Vincyfresh Crisps
Ltd was incorporated and on March 18, 2011 the property was registered as being owned by Vincyfresh
Crisps Ltd. Vincyfresh Crisps Ltd is a 100% owned subsidiary of Vincyfresh Limited. Vincyfresh Crisps
Ltd has not traded since its incorporation .
Trade payables
Other payables
Accrued expenses
December 31
2011
$
January 1
2011
$
12,027,210
642,243
8,981,240
10,966,076
3,288,870
6,875,671
21,650,693
21,130,617
Included in trade and other payables are balances due to related parties of $2,113,700 (January 1, 2011 $9,601,866).
Winfresh Limited
17
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2011
46
18
Loans and borrowings
Bank loans
Other loans
Analysis of loans
Wholly repayable within five years
Loan maturity analysis
In more than two years but not more than five years
December 31
2011
$
January 1
2011
$
27,466,856
811,331
6,341,100
-
28,278,187
6,341,100
28,278,187
6,341,100
28,278,187
6,341,100
28,278,187
6,341,100
The aggregate amount of loans and borrowings for which security has been given amounted to
$27,466,856 (1 January, 2011 - $6,341,100), which are secured by way of a debenture over the
subsidiary companies' long leasehold property and improvements, freehold land and buildings and
equipment, and guarantees by given the ultimate parent company.
Bank loan of $20,961,500 bears interest at LIBOR plus 2.5%; bank loan of $6,505,356 bears interest at
8.5% per annum. Other loans of $811,331 are unsecured, interest free and no fixed repayment terms.
Winfresh Limited
19
Deferred income tax asset
Deferred income taxes are calculated in full on temporary differences under the liability method using a
principal tax rate of 26% (January 1, 2011 - 28%). The movement on the deferred tax (asset) account is
as follows:
December 31
2011
$
January 1
2011
$
Consolidated statement of income charge (Note 28)
Exchange difference
246,969
288,429
(10,983)
256,179
(1,392)
(7,818)
At end of year
524,415
246,969
Deferred taxes arise from decelerated capital allowances in the United Kingdom.
Delivering
wholesomeness
value quality for healthy growth
DECEMBER
31, 2011
47
Subscribed
500 ordinary shares
1,500 5% non-cumulative preference shares
5,000,000
15,000,000
5,000,000
15,000,000
20,000,000
20,000,000
Finance costs
January 2
2011
to
December 31
2011
$
On bank loans and overdrafts
Other interest
22
January 1
2011
$
January 3
2010
to
January 1
2011
$
1,052,332
34,433
-
1,086,765
-
Other (losses) / gains, net
Foreign exchange gains / (losses)
- Unrealised (losses) / gains on translation of balances
- Realised losses on transactions
(Loss)/gain on disposal of property, plant and equipment
Loss on disposal of intangible assets
Provision for diminution in value of fixed asset investment
January 2
2011
to
December 31
2011
$
January 3
2010
to
January 1
2011
$
(175,500)
339,540
(3,116)
(19,357)
-
(614,936)
6,113,742
220,768
(35,769,219)
699,530
141,567
(29,350,115)
Winfresh Limited
21
December 31
2011
$
Share capital
20
DECEMBER 31, 2011
48
23
Other income
January 2
2011
to
December 31
2011
$
Agency fees and commissions
Dividend income
Interest income
Miscellaneous income
24
January 3
2010
to
January 1
2011
$
19,675
405,049
854,738
51,326
4,126,400
84,772
1,536,394
1,279,462
5,798,892
Financial commitments
At 31 December 2011 the company had lease payments due under operating leases as follows:
Land and buildings
Other
December 31
January 1 December 31
January 1
2011
2011
2011
2011
$
$
$
$
Winfresh Limited
Operating leases which expire:
Within one year
Between two and five years
25
Minority share of retained deficit
Minority share of pre-acquisition deficit
Minority share of equity in subsidiary company
93,032
-
80,075
36,778
179,057
111,406
133,966
309,632
93,032
116,853
290,463
443,598
December 31
2011
$
January 1
2011
$
(2,386,223)
(2,182,173)
4,954,192
(133,451)
1,750,000
385,796
1,616,549
DECEMBER
31, 2011 value quality for healthy growth
Delivering
wholesomeness
49
January 1
2011
$
Direct costs
Salaries and wages
Directors' fees
Rent and service charges
Communication
Insurance
Light and heat
Repairs and renewals
Security
Printing, postage and stationery
Advertising and publicity
Telephone
Information technology support costs
Vehicle expenses
Travel and entertaining
Subsistence
Legal and professional fees
Audit fees
Bank charges
Bad debt expenses
Other expenses
Subscriptions and donations
Research and development
Impairment of goodwill
Depreciation and amortisation
208,124,057
10,929,087
1,401,160
873,207
39,139
439,055
435,833
381,111
97,032
133,262
73,138
205,108
479,209
113,814
635,027
88,387
748,054
533,901
325,154
341,588
350,479
49,616
91,185
3,754,313
243,374,237
9,847,482
1,314,348
723,819
425,731
122,046
160,336
188,716
93,013
88,658
27,372
217,386
380,170
62,502
763,990
138,035
1,114,602
218,276
240,081
974,759
288,800
83,103
800,000
2,341,671
Total cost of goods sold, administrative and general expenses
230,641,916
263,989,133
Cost of goods sold
Distribution and selling
Administrative and general expenses
201,269,090
13,093,794
16,279,032
233,755,709
9,618,528
20,614,896
Total cost of goods sold, administrative and general expenses
230,641,916
263,989,133
December 31
2011
$
Winfresh Limited
Expenses by nature
26
DECEMBER 31, 2011
50
27
Employee benefit expenses
December 31
2011
$
Salaries and wages
Directors' fees
Social security costs
Other staff costs
28
Income tax expense
January 1
2011
$
9,252,122
1,401,160
877,791
799,174
8,393,110
1,314,348
804,221
650,151
12,330,247
11,161,830
December 31
2011
$
January 1
2011
$
Share of joint venture tax
Adjustment for prior year
Deferred tax charge (Note 19)
2,379,130
(2,518)
(288,429)
526,540
Current tax charge
2,088,183
527,932
1,392
The tax on the Group's profit before tax differs from the theoretical amount that would arise using the
applicable standard rate as follows:
Winfresh Limited
December 31
2011
$
January 1
2011
$
Loss before income tax
(8,315,209)
(44,264,800)
Tax calculated at standard rate of 30%
Tax effect of consolidation adjustments
Exempt profit
Expenses not deductible for tax purposes
Deferred tax not recognised
Other tax adjustments
(2,494,563)
2,626,013
(2,234,496)
46,525
2,090,701
2,054,003
(13,279,440)
13,176,385
99,458
479,852
1,392
50,285
2,088,183
527,932
Tax charge
DECEMBER 31, 2011
51
The subsidiary company, Winfresh (UK) Limited, is party to a multi-employer defined benefit pension
scheme and the scheme's actuaries have confirmed to the directors that they would be unable to supply
the trustees of the pension scheme with any allocation of the pension scheme's assets and liabilities
between the pension scheme's participating employers on a reasonably consistent basis. Consequently,
in accordance with International Accounting Standard No. 19 (IAS 19) the scheme has been accounted
for as if it were a defined contribution pension scheme.
The constitution of the scheme requires that a triennial valuation is performed by independent actuaries
and the last such valuation was performed at December 31, 2009. As part of this valuation the trustees
had previously produced a Statement of Funding Principles [SFP] in April 2008, which sets out the
trustees' policy for ensuring that the scheme's statutory funding objective is met. The valuation performed
at December 31, 2009 revealed that, on the SFP basis, there was a funding deficit of $20,215,000 in the
scheme at that date [previous triennial valuation at December 31, 2006 - a funding deficit of $15,269,000
at that date when restated to the SFP basis]. In each case the funding level was less than the 90%
required by the minimum funding requirement rules. A supplementary IAS 19 report prepared by the
independent actuaries at December 31, 2010 estimates that the pension scheme deficit at December 31,
2010 stated on a consistent basis but now also taking into account the effect of IFRS Interpretations
Committee Update 14 (IFRIC 14) was $14,771,000. As before, the funding level was less than the 90%
required by the minimum funding requirement rules.
The assets of the scheme are held separately from those of the subsidiary company in an independently
administered fund. The pension cost charge in the consolidated statement of comprehensive income
represents contributions payable by the subsidiary company to the fund for the period amounted to
$512,823 (period to January 1, 2011 - $375,537). Contributions totaling $21,628 (at January 1, 2011 $6,854) were payable to the fund at the balance sheet date and are included in other payables.
Winfresh Limited
The trustees have determined to keep the pension fund's investment strategy under close review and the
participating employers have determined that they will do all that they can to preserve accrued
entitlements within the scheme via an agreed schedule of revised employer contributions. The
participating employers are currently in discussion regarding further steps that may be taken to address
the deficit in the scheme.
Pension costs
29
DECEMBER 31, 2011
52
30
Guarantees
The subsidiary company, Winfresh (UK) Limited, has provided a payment guarantee to the UK tax
authority, HM Revenue & Customs. At the balance sheet date the maximum amount payable under this
guarantee totalling $1,048,075 (January 1, 2011 - $1,056,850).
31
Contingent liabilities
31.1 The Group is contingently liable in respect of disputed liabilities that may be due under the banana
contract sales agreement with the banana companies. These amounts are currently being negotiated and
the full amount of the liability, if any, cannot be determined at the balance sheet date. Any settlements
arising from these disputed liabilities are expected to be accounted for as a charge against income in the
period in which the settlement occurs.
31.2 The Group has agreed to continue to provide financial support to a subsidiary undertaking for the
foreseeable future, being a period of at least twelve months from the date of approval of these
consolidated financial statements, by way of deferment of the amounts owed by the subsidiary
undertaking or by other means, so as to enable the subsidiary undertaking to continue in operation as a
going concern.
At the statement of financial position date the amount owed by this subsidiary undertaking was
$1,679,620 (at January 1, 2011 - $656,329), for which no provision for impairment has been made.
31.3 The Group has entered into a recovery plan designed to restore the minimum funding level of the defined
benefit pension scheme of which it is one of the participating employers, by way of a schedule of revised
employer contributions. At the currently agreed level of contribution the group is liable to make a total
employers contribution of $175,860 per year. No provision has been made in these consolidated
financial statements in respect of this liability.
Winfresh Limited
32
Post balance sheet events
Subsequent to the statement of financial position date on 21 May 2012 the company acquired the
remainder of the shareholdings in one of its subsidiary companies, Sunfresh Limited for $1,750.
Consequently, Sunfresh Limited is now a fully owned subsidiary of the company.
WINFRESH LIMITED
1st Floor M&C Building
Bridge Street, P.O. Box 115
Castries, St. Lucia
Tel: +1 758 457-8600
Fax: +1 758 453-1638
www.winfresh.net

Untitled - Winfresh

Transcription

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