Annual Report • Dec 18, 2023
Annual Report
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for the year ended 31 August 2023
Donegal Investment Group plc ('DIG') ('Group') reports its results for the year ended 31 August 2023.
| Financial Highlights | 2 |
|---|---|
| Board of Directors & Other Information | 3 |
| Chairman's Statement | 4 |
| Directors' Report | 5 |
| Corporate Governance Report | 9 |
| Corporate Social Responsibility Report | 14 |
| Report of the Remuneration Committee | 15 |
| Statement of Directors' Responsibilities | 18 |
| Independent Auditor's Report | 19 |
| Consolidated Statement of Profit or Loss and Comprehensive Income |
25 |
| Consolidated Statement of Financial Position | 27 |
| Company Statement of Financial Position | 29 |
| Consolidated Statement of Changes in Equity | 31 |
| Company Statement of Changes in Equity | 33 |
| Consolidated Statement of Cash Flows | 34 |
| Company Statement of Cash Flows | 36 |
| Notes to the Consolidated Financial Statements | 38 |
The Directors present their report and the audited financial statements for the year ended 31 August 2023. The comparative amounts relate to the 12 months ended 31 August 2022.
The Group's seed potato business delivered an improved trading performance for the financial year ending 31 August 2023. Volumes sold returned to more normalised levels following the end of Covid-19 restrictions whilst management was successful in recovering inflationary input costs increases, ensuring profit margins were not eroded. Revenue increased by 18% (€4.5m) to €29.7m while the business delivered a trading profit €1.8m, an increase of €1.2m on the prior year.
Following the sale of its speciality dairy business Nomadic Dairy ("Nomadic") on 5 November 2021 the Group recognised contingent consideration receivable of €2.4m, dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022, inclusive. On 10 July 2023 the Group received €3,340,000 in full and final settlement of contingent consideration receivable resulting in a further profit on disposal of €843,000 net of costs.
As noted in our Interim Results for period ended 28 February 2023, shortages in hard currency in certain markets resulted in slower than expected payments for seed sold in the 2022/23 season. While this issue largely resolved itself over the following six months, trade receivables still increased by €1.2m year on year as consequence of this issue. The board is happy to confirm that all outstanding payments related to this issue have now been received.
The Group has a cash position, net of bank overdrafts and lease debt, of €6.1m at year end compared to a €3.0m net position at 31 August 2022.
Geoffrey Vance (aged 72) is Chairman of Donegal Investment Group plc. He has served on the Board of Donegal Investment Group plc since its conversion from a society in 1989. Prior to this, he served for a number of years on the Committee of management of Donegal Co-operative Creameries Limited.
Patrick Kelly (aged 50) was appointed to the Board on 7 July 2004. He is the chairman of the audit committee. He is also vice chairman of the Irish Cattle Breeding Federation and a Board member of Progressive Genetics.
Henry McGarvey (aged 56) was appointed to the Board on 28 August 2013. Henry was previously Managing Director of Pramerica Systems Ireland Limited and is currently a Board member of the Western Development Commission. Previously, he worked in senior executive positions with Almarai in Saudi Arabia and Motorola and Accenture in Dublin.
Ian Ireland (aged 62) joined Donegal Investment Group plc in January 2005. Prior to that, he had spent over 20 years working in the food industry in Ireland and the UK.
Padraic Lenehan (aged 49) was appointed to the Board on 1 July 2015. Padraic joined Donegal Investment Group plc in 2008 as Financial Controller of its Dairy business, where he subsequently became Financial Controller of the merged Aurivo and Donegal Creameries milk business. In 2013 he returned to Donegal Investment Group plc as Finance Director. Prior to that, he worked for RTÉ, Accenture and in financial services in Dublin.
P Lenehan Colab, ATU Letterkenny Co Donegal
BDO Ireland Block 3, Miesian Plaza 50-58 Baggot Street Lower Dublin 2, D02 Y754
Hayes solicitors LLP Lavery House Earlsfort Terrace Dublin 2, D02 T625
Allied Irish Bank plc Letterkenny Co Donegal
162921
As advised, at our interim results posted in June, the Group's seed potato business delivered a satisfactory trading performance with markets returning to a more normalised trading pattern following the turmoil of the Covid years. Group turnover increased by 18% to €29.7m delivering a trading profit of €1.8m.
Our seed potato business comprises IPM Potato Group, AJ Allan in Scotland, IPM Portugal, IPM Holland, IPM France, IPM Kenya and a minority shareholding in Utkal Seeds in India. The Board continues to be encouraged about IPM Potato Group's potential for growth and it's ability to enhance shareholder value.
We are pleased to update shareholders that the roll out of new varieties continues to progress in line with plans. At our East Africa operation, we now have three varieties approved and protected. We are particularly optimistic regarding new IPM varieties "Java" and "Buffalo" and will be scaling these up significantly in the coming seasons. In the Indian market, there are now seven IPM varieties approved and protected and the expectation that the commercialisation of these varieties will gather pace in the next few seasons. In the UK market, IPM variety "Buster" has been highly commended with an Industry award for PCN (potato cyst nematode) resistance, this pest having become a serious problem in potato production areas in Europe.
In June we advised that a shortage of hard currency had delayed payments from some markets. This has now been unwound and management expect more normalised conditions going forward.
As advised during the year we also received a contingent payment of €3.3m following the disposal of the Nomadic Dairy business in November 2021. This contributed to our net cash position (before lease debt) of €6.9m at year end.
During the year we completed the downsizing of our Head Office in Letterkenny, relocating our administration centre to the Colab facility in Letterkenny ATU.
In terms of the 2023/2024 season, the harvest of seed potato crops across Europe is largely complete with yields back between 10% to 30% due to adverse weather conditions. This is expected to lead to a tight supply of seed potato in the market resulting in robust pricing compensating for reduced volumes sold.
It continues to be Board policy to review all strategic options to maximise shareholder value.
At 31 August 2023, the Group had committed bank facilities of €8.4m for working capital requirements.
The Group will announce in due course the date of its next AGM.
Geoffrey Vance Chairman
During the year, the Group was engaged in the development, purchase and sale of seed potatoes and the rental of property assets.
The Chairman's Statement review include a comprehensive review of the performance of the Group's businesses in the year. Turnover from continuing operations in the year was €29.7m (2022: €25.2m). The Group recorded an operating profit before exceptionals of €1.8m for the year ended 31 August 2023 in comparison with an operating profit before exceptional items of €0.6m in 2022. In monitoring performance, the Directors and management have regard to a range of key performance indicators (KPIs), including the following:
| Financial KPI's | 2023 | 2022 | Change |
|---|---|---|---|
| Continuing operations – pre-exceptional | |||
| Operating profit | €1.8m | €0.6m | +€1.2m |
| Profit before tax | €1.4m | €0.6m | +€0.8m |
| Continuing operations | |||
| Revenue - continuing operations | €29.7m | €25.2m | +€4.5m |
| Operating profit/(loss) | €1.8m | (€0.2m) | +€2.0m |
| Profit/(loss) before tax | €1.4m | (€0.2m) | €1.6m |
| Profit/(loss) after tax | €1.3m | (€0.2m) | €1.5m |
| Cash and overdraft, net | €6.9m | €3.8m | +€3.1m |
| Debt | (€0.8m) | (€0.8m) | €0.0m |
| Net assets attributable to shareholders | €16.3m | €14.0m | +€2.5m |
Profit for the financial year amounted to €1.3m (2022: loss of €0.2m). A dividend is not declared in respect of 2023 or 2022. The results for the financial year ended 31 August 2023 are set out in detail on pages 25 to 90. A minority interest dividend of €0.1m was paid during the year (2022: €Nil).
Under Irish company law, the Group and Company are required to give a description of the principal risks and uncertainties which they face. These principal risks, and the actions taken to mitigate them are set out below. This is not intended to be an exhaustive analysis of all risks currently facing the Group and does not list the risks in any order or priority.
| Risk and risk description | Key control and mitigation activities | ||||
|---|---|---|---|---|---|
| Brexit The continued uncertainty in respect of cross border trade associated with the United Kingdom leaving the EU in the seed |
Senior management across the Group are continuing to monitor the changing political and regulatory landscape post Brexit and taking appropriate steps as required to mitigate risks. |
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| potato industry. | Management continues to use multi geographic growing platforms to mitigate risks and cost factors. |
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| Unusual weather patterns The disruption of supply and demand of produce due to unusual |
The Groups diversified product sourcing activities mitigates the risk. |
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| weather conditions. | Management monitor and work with contract growers to mitigate unusual weather conditions in growing areas where possible. |
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| Market demand Excess supply and/or reduced consumer demand resulting in reduced selling prices. |
The market is continually monitored and reviewed by management to ensure appropriate measures in place. |
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| Regulation and compliance Exposure to changes in economic, political, administrative, taxation or other regulatory factors in any jurisdiction in which the Group operates. |
Regular monitoring and review of any changes in laws and regulations including ongoing employee training and use of experts. |
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| Inflation | Implementation of variability in contractual relationships with suppliers. |
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| Input cost Inflation and inability to recover cost increase in market. |
Focus on certified proprietary varieties which deliver added value for customers. |
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| Key customer relationships Ability to sustain commercial relationships with key customers in a competitive environment. |
Customer relationships are developed and maintained by operational management focusing on added value, choice, price and service. |
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| Credit risk Default of counterparties in respect of money owed to the Group. |
Credit limits are regularly reviewed in accordance with credit control procedures in place across the Group. |
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| Foreign currency Adverse changes to sterling relative to the euro. |
Foreign currency risk is managed by utilising forward contracts to cover committed exposures. |
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| IT systems and cyber security Security of information technology including cyber security in |
Information security policies and procedures are in place to protect business and personal information. |
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| supporting the Group's business activity. | A policy is in place in respect of backups across the Group, which is regularly tested. |
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| Retention of key personnel The ability to retain or attract key talented staff across the Group. |
Recruitment policies, management incentives and training programmes are in place across the Group to encourage retention of key personnel. |
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| Board composition and succession plans are assessed by the Nomination committee. |
The Directors have analysed these and other risks and they believe that appropriate plans are in place to manage and mitigate these risks. The corporate governance report on pages 9 to 13 sets out the policies and approach to risk management adopted by the Group and the related internal control procedures and responsibilities.
Our financial risk management objectives and policies and exposure to market risk are outlined in Note 5 to the consolidated financial statements.
The Directors have reviewed the Group's business plan for the next 24 months and other relevant information and have a reasonable expectation that the Group will continue in operational existence for the foreseeable future. It should also be noted that the Group remains in a strong position with cash at bank, net of overdrafts and leases, of €6.1m (2022: €2.9m), and the remaining operating business continues to trade well while generating positive cash flows.
A review of future developments in the business is included in the Chairman's Statement on page 4.
There have been no significant events subsequent to the year end, which would require adjustment to, or disclosure in, the financial statements.
The Directors of the Company on 31 August 2023 are listed on page 3. The Report of the Remuneration Committee is listed on pages 15 to 17. Padraic Lenehan retires by rotation, and intends to stand for re-election at the next AGM.
The interest of the Directors and Secretary are disclosed in the report of the remuneration committee on pages 15 to 17.
The Constitution of the Company enables it to purchase treasury shares. The Company also seeks annual authorisation from shareholders to make market purchases of the Company's shares (as defined by Section 328 of the Companies Act 2014). The maximum number of shares which may be acquired under such authorisation is 15% of the Company's issued shares. This authority has continued to be renewed at the Annual General Meeting of the Company.
During the course of the year the Group cancelled the remaining treasury shares held which amounted to 67,168 ordinary shares of 13 cent each. (2022: 67,168).
Following the cancellation of the remaining treasury shares, the Company's issued Ordinary Share Capital is 1,522,293.
As at 18 December 2023, the Company had received notification of the following interests in its ordinary share capital:
| Name | Holding | % |
|---|---|---|
| Pageant Investments Limited | 143,450 | 9.42% |
| Peter Carey | 67,509 | 4.43% |
| Ian Ireland | 52,622 | 3.46% |
| Neil Duggan | 48,381 | 3.18% |
| Nick Furlong | 48,082 | 3.16% |
Save for the interests referred to above, the Company is not aware of any person who is, directly or indirectly, interested in 3% or more of the issued share capital of the Company.
Due to the nature of its business, the Group is exposed to the effects of fluctuations in foreign currency exchange rates. To manage these exposures, the Group has entered into forward currency purchases. Further details are set out in note 29 to these financial statements.
The Directors believe that they have complied with the requirements of Section 281 to 285 of the Companies Act 2014 with regard to maintaining adequate accounting records by employing accounting personnel with appropriate expertise and by providing adequate resources to the financial function. The accounting records of the Company are maintained at Unit 214, CoLab, ATU, Port Road, Letterkenny, Co Donegal.
The Group subsidiary, IPM Potato Group Limited, has invested in potato variety innovation for over 49 years by funding the variety breeding programme at Oak Park Research Centre, Carlow, Ireland. The breeding programme uses the most current breeding techniques and does not utilise genetic modification (G.M.). The development of new and better potato varieties is one of the key elements for a vibrant and resourceful potato industry. IPM consistently release new varieties to cater for the ever-changing requirements of our customers worldwide.
The Directors believe that they have taken all steps necessary to make themselves aware of any relevant audit information and have established that the Group's statutory auditors are aware of that information. In so far as they are aware, there is no relevant audit information of which the Group's statutory auditors are unaware.
The Group has an audit committee in place and full details are included in the corporate governance report on pages 9 to 13.
The Directors acknowledge their responsibility for securing the Group's compliance with its relevant obligation in accordance with Section 225(2)(a) of the Companies Act 2014 and tax laws ("relevant obligations") and confirm the following:
The Group's corporate governance policies and procedures including its system of internal control is set out on pages 9 to 13. The report on Corporate Governance is deemed to form part of the Directors Report.
The auditor, BDO, has expressed its willingness to be re-appointed in accordance with Section 383(2) of the Companies Act 2014.
The Company is not a close company under the provisions of the Taxes Consolidation Act 1997.
Information relating to subsidiary and associated undertakings is included in note 35 to the financial statements.
The Group did not make any political donations or incur any political expenditure during the year (2022: €Nil)
The Company's Annual General Meeting will take place at the Colab, ATU, Letterkenny, Co. Donegal on a date which will be announced in due course.
Padraic Lenehan Ian Ireland
Director Director
18 December 2023
Maintaining high standards of corporate governance continues to be a priority of the Directors of Donegal Investment Group plc. The Group has adopted corporate governance policies and procedures which the Board regard as being appropriate to the scale and complexity of the Group.
The Directors are accountable to the shareholders for good corporate governance and this report addresses how the Group's policies and procedures have been applied.
The Group is controlled through its Board of Directors. The Board's main role is to oversee the operation of the Group, to provide leadership to the Group, to approve the Group's strategic objectives and to ensure that the necessary financial and other resources are made available to enable them to meet those objectives. The Board meet on a regular basis throughout the year and certain matters are specifically reserved to the Board for its decision.
The current specific responsibilities reserved to the Board include; setting Group strategy and approving an annual budget; reviewing operational and financial performance; approving major capital expenditure; reviewing the Group's systems of financial control and risk management; ensuring that appropriate management development and succession plans are in place; reviewing the environmental, health and safety performance of the Group; and ensuring that a satisfactory dialogue takes place with shareholders.
The Board has delegated the following responsibilities to management; the development and recommendation of strategic plans for consideration by the Board that reflect the longer-term objectives and priorities established by the Board; implementation of the strategies and policies of the Group as determined by the Board; monitoring of the operating and financial results against plans and budgets; prioritising the allocation of technical and human resources; and developing and implementing risk management systems.
It is our practice that a majority of the Board comprises Non-Executive Directors, considered by the Board to be independent (criteria for independence set out below). At present, there are five Non-Executive Directors and no Executive Directors. Biographical details are set out on page 3.
We consider the current size and composition of the Board to be within a range which is appropriate. We also believe that the current size of the Board is sufficiently large to enable its Committees to operate effectively, while being dynamic and responsive to the needs of the Company.
The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. The Chairman facilitates the effective contribution of all Directors, ensures that Directors receive accurate, timely and clear information and manages effective communication with shareholders. Mr Geoffrey Vance has been Chairman of the Board since 2006.
The Board has decided that it will not designate a recognised senior member other than the Chairman to whom concerns of other Board members can be conveyed as it does not consider it necessary.
All appointments to the Board are approved by the Nomination Committee. There are no formal time limits for service as Director although service periods are kept under ongoing review and at each annual general meeting of the Company, every Director who has been in office at the completion of each of the three preceding annual general meetings and who has not been submitted for re-election at any of the three preceding annual general meetings, shall retire from office. Mr Ian Ireland and Mr Padraic Lenehan stepped down from their full-time executive roles in February 2022 and redundancy settlements were made.
The Board currently comprises the Chairman (Non-Executive) and four Non-Executive Directors, including Mr Ian Ireland and Mr Padraic Lenehan who were previously executive directors. The Non-Executive Directors are of sufficient calibre and number that their views carry significant weight in the Board's decision making.
Directors have the right to ensure that any concerns they have, which cannot be resolved, about the running of the Group or a proposed action, are recorded in the Board minutes. In addition, upon resignation, a Non-Executive Director will be asked to provide a written statement to the Chairman, for circulation to the Board, if they have any such concerns.
The Directors are given access to independent professional advice at the Group's expense, when the Directors deem it necessary in order for them to carry out their responsibilities.
The Board believes that all Directors bring the appropriate judgement, knowledge and experience to the Board's deliberations. The Board has in place an annual process to evaluate the independence of Directors and the most recent review concluded that all the Non-Executive Directors are independent, notwithstanding the fact that a number have served on the Board for more than nine years. In reaching their conclusion, the Board
considered principles relating to independence and have taken the view that independence is determined by a Director's character, objectivity and integrity.
The Non-Executive Directors considered by the Board to be independent:
The Group has entered into consultancy agreements with Culkeen Consulting Limited, which is owned and operated by Non-Executive Director Mr Ian Ireland and Drumgornan Limited, which is owned and operated by Non-Executive Director Mr Padraic Lenehan. These companies will provide management services as required to support the strategy of the Board going forward.
On appointment, all new Directors take part in an induction programme when they receive information about the Group, the role of the Board and the matters reserved for its decision, the terms of reference and membership of the principal Board and Board Committees, the Group's corporate governance practices and procedures, including the responsibilities delegated to Group senior management, and the latest financial information about the Group. This will typically be supplemented by meetings with key senior personnel. Throughout their period in office, the Directors are continually updated on the Group's business, the competitive and regulatory environments in which it operates, corporate social responsibility matters and other changes affecting the Group and the agriculture industry as a whole, by written briefings and meetings with senior personnel. Directors are also advised on appointment of their legal and other duties and obligations as a director, both in writing and in face-to-face meetings with the Company Secretary. They are also updated on changes to the legal and governance requirements of the Group and upon themselves as Directors.
The Nomination Committee at 31 August 2023 was comprised of two Non-Executive Directors, Geoffrey Vance, who acts as chairman and Patrick Kelly.
The Nomination Committee is responsible for proposing to the Board any new appointments, whether as Executive or Non-Executive Directors of the Company. Appointments to the Board are approved by the Board as a whole. In so doing, the Board considers the balance of skill, knowledge and experience on the Board which is necessary to allow it to meet the strategic vision for the Group. Newly appointed Directors are subject to election by shareholders at the Annual General Meeting following their appointment. Excluding any such newly appointed Directors, one third of the Board is subject to re-election each year.
Appointments to committees are for a period of up to three years which may be extended for two further three year periods provided that the majority of the Committee members remain independent.
The Board has a formalised process in place for the annual evaluation of the performance of the Board, its principal Committees and individual Directors in line with Group policy.
As part of the performance evaluation process, the Non-Executive Directors meet annually without the Chairman present to appraise the Chairman's performance, having taken the views of the Executive Directors and the Company Secretary into account.
The Chairman conducts a formal evaluation of the performance of all Directors annually. Each Director is provided with feedback gathered from other members of the Board. This process covers the training and development needs of individual Directors, where appropriate. Performance is assessed against a number of measures, including the ability of the Director to contribute to the development of strategy, to understand the major risks affecting the Group and to commit the time required to fulfil the role. As part of that review process, the Chairman discusses with each individual their training and development needs and, where appropriate, agrees for suitable arrangements to be put in place to address those needs.
The Company Secretary role is provided by Mr Padraic Lenehan. The Company Secretary is responsible for advising the Board through the Chairman on all governance matters. All Directors have access to the advice and services of the Company Secretary. The Company's Articles of Association provide that the appointment and removal of the Company Secretary is a matter for the full Board.
Regular reports and papers are circulated to the Directors in a timely manner in preparation for Committee meetings. These papers are supplemented by information specifically requested by the Directors from time to time.
The Directors receive monthly management accounts and regular management reports and information which enable them to review the Group's and management's performance against agreed objectives.
The Company has regular dialogue with institutional and major shareholders throughout the year, other than during close periods. All Directors are available to meet with such shareholders throughout the year. The Company also encourages communication with shareholders throughout the year and welcomes their participation at general meetings. The views of the shareholders and the market in general are communicated to the Board on a regular basis, as are expressed views on corporate governance and strategy, as well as the outcome of analyst and broker briefings. Analyst reports on the Group are also circulated to the Board members on a regular basis. The Group's website, www.donegaligroup.com, provides the full text of the Annual Reports, Interim Management Statements and Half Yearly Financial Reports. These can be accessed through the Financial Statements section of the website. Stock Exchange announcements are also made available in the News section of the website, after release to the Irish Stock Exchange.
All Board members attend the Annual General Meeting and are available to answer questions. Separate resolutions are proposed on substantially different issues, and the agenda of business to be conducted at the Annual General Meeting includes a resolution to receive and consider the Annual Report and Financial Statements. The chairman of each of the Board's committees is available at the Annual General Meeting. Notice of the Annual General Meeting, together with the Annual Report and Financial Statements, are sent to shareholders at least twenty one working days before the meeting, and details of the proxy votes for and against each resolution and the number of abstentions are announced after each vote on a show of hands.
An ongoing process exists for identifying, evaluating and mitigating the significant risks faced by the Group. This process is periodically reviewed by the Directors and has been in place throughout the accounting year and up to the date the financial statements were approved.
The Directors are responsible for the Group's system of internal control, set appropriate policies on internal control, seek regular assurance that will enable them to satisfy themselves that the system is functioning effectively and should ensure that the system of internal control is effective in managing risks in the manner which it has approved. Such a system is designed to manage rather than eliminate business risks and can provide only reasonable rather than absolute assurance against material misstatement or loss.
The Directors have continued to review the effectiveness of the Group's system of financial and non-financial controls during 2022, including operational and compliance controls, risk management and the Group's high-level internal control arrangements. These reviews have included an assessment of internal controls by management, management assurance of the maintenance of controls and considering reports from the external auditor on matters identified in the course of its statutory audit work.
The Group views the careful management of risk as a key management activity. Managing business risk to deliver opportunities is a key element of all activities. These business risks, which may be strategic, operational, reputational, financial or environmental, should be understood and visible. The business context determines in each situation the level of acceptable risk and controls.
Group management has delegated responsibility for major strategic development and financing decisions. Responsibility for operational issues is devolved, subject to limits of authority, to operating Company management. Management at all levels are responsible for internal control over the respective business functions they have been delegated. This embedding of the system of internal control throughout the Group's operations ensures that the organisation is capable of responding quickly to evolving business risks, and that significant internal control issues, should they arise, are reported promptly to appropriate levels of management.
The Board receives, on a regular basis, reports on the key risks to the business and the steps being taken to manage such risks. It considers whether the significant risks faced by the Group are being identified, evaluated and appropriately managed, having regard to the balance of risk, cost and opportunity.
The Directors consider that, given its size and complexity, the Group does not currently require an internal audit function.
The Audit Committee, a formally constituted sub-Committee of the Board, meet on a regular basis with the external auditor and considers any observations made by the auditor on matters identified in the course of its statutory audit work as part of satisfying itself as to the adequacy of the Group's internal control systems.
The Group operates procedures to ensure that appropriate arrangements are in place for employees to be able to raise, in confidence, matters of possible impropriety, with suitable subsequent follow-up action.
The preparation and issue of financial reports, including the consolidated financial statements is managed by the Group finance department. The Group's financial reporting process is controlled using documented accounting policies and reporting formats issued by the Group finance department. The Group finance department supports all reporting entities with guidance in the preparation of financial information. This process is supported by a network of finance managers throughout the Group, who have responsibility and accountability to provide information in keeping with agreed policies, including the completion of reconciliations of financial information to processing systems. The financial information for each entity is subject to a review at reporting Entity and Group level by senior management.
Eight meetings of the Board, four meetings of the Remuneration Committee, three meetings of the Audit Committee and one meeting of the Nomination Committee were held during the year ended 31 August 2023 and the attendance record of each Director is set out in the following table:
| Remunerati | ||||||||
|---|---|---|---|---|---|---|---|---|
| Board | on | Audit | Nomination | |||||
| Name | A | B | A | B | A | B | A | B |
| Geoffrey Vance | 7 | 6 | 1 | 1 | - | - | - | - |
| Ian Ireland | 7 | 7 | - | - | 2 | 2 | - | - |
| Patrick Kelly | 7 | 7 | - | - | 3 | 3 | - | - |
| P Lenehan | 7 | 7 | - | - | - | - | - | - |
| Henry McGarvey | 7 | 6 | 1 | 1 | 1 | 1 | - | - |
A – indicates the number of meetings held during the year the Director was a member of the Board and/or Committee
B – indicates the number of meetings attended during the year the Director was a member of the Board and/or Committee
The Remuneration Committee is comprised of two Non-Executive Directors, Henry McGarvey, who acts as Chairman and Geoffrey Vance. When necessary, Non-Committee members are invited to attend. The Committee's principal responsibilities are:
The report of the Remuneration Committee on behalf of the Board is set out on pages 15 to 17.
The Audit Committee is comprised of two Non-Executive Directors – Patrick Kelly (Chairman) and Ian Ireland. The Committee held three formal meetings during year ended 2023. When necessary, Non-Committee members are invited to attend.
The Audit Committee monitors areas of risk and performance by the Group and ensures the integrity of the Group's financial statements. The Audit Committee is also responsible for monitoring the effectiveness of the external auditor and audit process and makes recommendations to the Board in relation to the appointment, re-appointment and remuneration of the external auditors. This responsibility also ensures an appropriate relationship between the Group and external audit is maintained, including the review of all non-audit services provided. The audit committee performs a selfevaluation annually and no issues were identified during the review.
The engagement of the external auditor to provide any non-audit services must be pre-approved by the Committee where the fee exceeds 20% of the audit fee. During the financial year to 31 August 2023, fees charged in relation to non-audit services by former auditors KPMG and newly appointed auditors BDO, the Group's external auditors, totalled €3,000 (2022: €85,000).
The Audit Committee reviews annually the Group's systems of internal control and the processes for monitoring and evaluating the risks facing the Group. The Audit Committee meets with management as required and meets privately with the external auditor.
In the year ending 31 August 2023, the Audit Committee discharged its responsibilities by:
| On behalf of the Board | |
|---|---|
Padraic Lenehan Ian Ireland
Director Director
18 December 2023
Donegal Investment Group plc is committed to promoting Corporate Social Responsibility (CSR) across the Group. The Group strives to operate best practice in corporate governance, the environment, health & safety and the community & social performance.
The Group is committed to complying with all environmental legislative and regulatory requirements in our operations which are located in six countries. Donegal Investment Group plc recognises that good manufacturing practice must incorporate environmental management. The Group conducts its business activities in an environmentally responsible manner and endeavours to ensure that all adopted decisions consider the protection of the environment as documented in the Group's environmental policy.
Best practice in health & safety management is embedded in the Group's risk management processes and procedures and applied across the Group. Compliance is maintained through the health & safety officer, continuous high level of staff and management awareness and regular training.
The Remuneration Committee consists solely of Non-Executive Directors. The current members of the Remuneration Committee are Geoffrey Vance, and Henry McGarvey (Committee Chairman).
The terms of reference for the Committee are to determine the Group's policy on senior personnel remuneration and to consider and approve salaries and other terms of the remuneration package for senior personnel. The committee also consider and approve the terms and conditions of any consultancy agreements entered into by the Group for the provision of management services to the board.
The Group's policy on senior personnel remuneration recognises that employment and remuneration conditions for senior personnel must properly reward and motivate them to perform in the best interest of the shareholders. Performance related rewards, in which targets are measurable, are a key consideration.
The typical elements of the remuneration package for senior personnel are basic salary and benefits, incentive bonus, pensions and participation in the share option plan.
It is policy to grant options to certain key management across all locations to encourage identification with shareholders' interests.
The basic salaries of Senior Personnel are reviewed annually having regard to personal performance, Group performance, changes in responsibilities and competitive market practice in the area of operation. Employment related benefits consist principally of a car allowance and participation in the share option scheme.
The terms and conditions of any consultancy agreements entered into by the Group for the provision of management services to the Board are considered and agreed by the Remuneration Committee. Details of consultancy agreements entered into with companies owned and controlled by Mr Ian Ireland and Mr Padraic Lenehan are disclosed as part of Related Parties Note 34 on page 88. Costs associated with these services is categorised as "Qualifying Services" in this report.
Senior Personnel are entitled to receive bonus payments as the Remuneration Committee may decide at their absolute discretion.
Details of Directors' remuneration is given on pages 15 to 17, details of Directors' shareholdings are given on page 17.
The following information has been audited as part of the financial statements.
Ian Ireland and Padraic Lenehan positions as Executive Directors were made redundant on 1 March 2022.
| 2023 | 2022 | |
|---|---|---|
| € | € | |
| Salaries and benefits | ||
| Basic salary | - | 185,348 |
| Benefits(1) | - | 19,070 |
| Pension charge(3) | - | 6,494 |
| - | 210,912 | |
| Performance related | ||
| Annual incentives(2) | - | 62,099 |
| Redundancy | ||
| Compensation for loss of office or other termination benefits | - | 1,418,128 |
| Total executive directors' remuneration | - | 1,691,139 |
|---|---|---|
| Average number of Executive Directors | - | 2 |
| Average total remuneration per Executive Director | - | 845,570 |
| 2023 | 2022 | |
| € | € | |
| Non-Executive Directors | ||
| Fees and other emoluments | ||
| Fees(4) | 109,520 | 116,502 |
| Qualifying Services(6) | 357,468 | 172,404 |
| Other emoluments and benefits | - | - |
| Total Non-Executive Directors' remuneration | 466,988 | 288,906 |
| Average number of non-Executive Directors | 5 | 6 |
Notes to Directors' Remuneration
Benefits principally relate to a car allowance and expenses paid to Directors.
The incentive plan is outlined on page 15.
The pension charge represents contributions made to defined contribution scheme pension funds.
Five non-Executive Directors received fees in 2023 (2022: Eight).
Benefits above exclude employers PRSI contribution costs.
'Qualifying services', in relation to any person, means his or her services as a director of the company and his or her services, while director of the company, as director of any of its subsidiary undertakings or otherwise in connection with the management of the affairs of the company or any of its subsidiary undertakings.
| Basic salary or fees |
Annual incentive bonus |
Benefits, Pensions & other related costs |
Qualifying Services |
Redundancy costs |
2023 Total | 2022 Total | |
|---|---|---|---|---|---|---|---|
| € | € | € | € | € | € | € | |
| Executive Directors* | |||||||
| I Ireland | - | - | - | - | - | - | 1,289,159 |
| P Lenehan | - | - | - | - | - | - | 401,980 |
| - | - | - | - | - | - | 1,691,139 |
* Ian Ireland and Padraic Lenehan positions as Executive Directors were made redundant on 1 March 2022
| G Vance (Chairman) | 47,710 | - | - | - | - | 47,710 | 47,832 |
|---|---|---|---|---|---|---|---|
| F Browne* | - | - | - | - | - | - | 4,591 |
| 109,520 | - | - | 357,468 | - | 466,988 | 289,355 | |
|---|---|---|---|---|---|---|---|
| P Lenehan | 13,772 | - | - | 116,744 | - | 130,516 | 58,930 |
| I Ireland | 13,772 | - | - | 240,724 | - | 254,496 | 127,246 |
| H McGarvey | 18,526 | - | - | - | - | 18,526 | 19,509 |
| G McClay | - | - | - | - | - | - | 4,700 |
| P Kelly | 15,740 | - | - | - | - | 15,740 | 15,740 |
| M Griffin* | - | - | - | - | - | - | 10,807 |
*M Griffin, F Browne, and G McClay retired from the board during the year ended 31 August 2022. P Lenehan and I Ireland were appointed as Non-Executive Directors on 1 March 2022 having previously served as Executive Directors.
The beneficial interests, including family interests, of the Directors and Secretary in office at 31 August 2023 in the ordinary shares of the Company at 31 August 2023 (or date of appointment, if later) are set out below:
| 31 August 2023 |
31 August 2022 |
|
|---|---|---|
| Directors: | ||
| G Vance (Chairman) | 36,044 | 35,366 |
| I Ireland | 52,622 | 52,622 |
| P Kelly | 1,271 | 1,271 |
| P Lenehan | - | - |
| H McGarvey | 7,146 | 7,146 |
Movements in shareholdings represent purchases/sales on the open market by the Non-Executive Directors.
All interests held by the Directors in options issued by the Company under its share options schemes had lapsed or were exercised prior to 31 August 2022. No interests were held during the financial year or at 31 August 2023.
in respect of the annual report and the financial statements
The Directors are responsible for preparing the annual report and the Group and Company financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. As required by the ESM Rules, they are required to prepare the Group financial statements in accordance with IFRS as adopted by the EU. The Directors have elected to prepare the Company financial statements in accordance with IFRS as adopted by the EU and as applied in accordance with the Companies Act 2014.
Under company law the Directors must not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the Group's profit or loss for that year. In preparing each of the Group and Company financial statements, the Directors are required to:
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position of the Group and Company and the profit and loss of the Group and which enable them to ensure that the financial statements comply with the provision of the Companies Act 2014. The Directors are also responsible for taking all reasonable steps to ensure such records are kept by its subsidiaries which enable them to ensure that the financial statements of the Group comply with the provisions of the Companies Act 2014. They are responsible for such internal controls as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have a general responsible for safeguarding the assets of the Company and the Group, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for preparing a Directors' report that complies with the requirements of the Companies Act 2014.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
| Padraic Lenehan | Ian Ireland |
|---|---|
Director Director
18 December 2023
We have audited the financial statements of Donegal Investment Group plc ('the Company') and its consolidated undertakings ('the Group') for the year ended 31 August 2023, which comprise the Consolidated Statement of Profit or Loss and Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Company Statement of Cash Flows and notes to the financial statements, including the summary of significant accounting policies set out in note 3. The financial reporting framework that has been applied in their preparation is Irish Law and International Financial Reporting Standards (IFRS) as adopted by the European Union.
In our opinion:
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Company in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard for Auditors (Ireland) issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to other listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the Group and Company's ability to continue as a going concern included:
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined below, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our procedures to identify the risks of irregularities, including fraud included, amongst other matters:
Our procedures to respond to risks identified included, amongst other matters:
We have also communicated relevant identified laws, regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud), including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The Group had €3.9m (2022: €2.1m) in trade receivables after recognizing an Expected Credit Loss (ECL) provision of €0.7m as at 31 August 2023 (2022: €0.7m).
The Group applies the simplified approach under IFRS 9 Financial Instruments in measuring the expected credit loss provision. Under the simplified approach, lifetime losses are recognized for all trade debtors.
Given the material level of trade receivables as at 31 August 2023 as well as the significant judgement involved in assessing the recoverability of trade receivables, we have identified this as a Key Audit Matter.
Refer to:
Our procedures included but were not limited to;
We define materiality as the magnitude of misstatement, including omissions, in the financial statements that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of a reasonably knowledgeable person taken on the basis of the financial statements. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality and performance materiality for the financial statements as a whole as follows:
For the purpose of our audit, we used overall Group materiality of €135,000, which represents approximately 10% of Group profit before taxation in the year.
Performance materiality for the financial statements as a whole was set at €100,000.
We applied these thresholds, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial statements as a whole.
We chose profit before tax as the benchmark because, in our view, it is the key area of interest for the principal users of the financial statements.
We selected 10% based on our professional judgment and the perceived level of risk, noting that it is also within the range of commonly accepted income benchmarks.
The scope of our audit was influenced by our application of materiality. As a result, our audit approach was developed by obtaining an understanding of the Group's and Company's activities, the key functions undertaken on behalf of the board and the overall control environment. Based on this understanding we assessed those aspects of the Group's and Company's financial statements which were most likely to give rise to a material misstatement. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based solely on the work undertaken in the course of the audit, we report that:
We have obtained all the information and explanations which, to the best of our knowledge and belief, are necessary for the purposes of our audit.
In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the Company statement of financial position in agreement with the accounting records.
Based on the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.
The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions required by sections 305 to 312 of the Act are not made. We have nothing to report in this regard.
As explained more fully in the directors' responsibilities statement set out on page 18, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or the Company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on IAASA's website at: https://iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdf This description forms part of our auditor's report.
Our report is made solely to the Company's members, as a body, in accordance with section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Signature: for and on behalf of BDO Dublin Statutory Audit Firm AI223876
Stewart Dunne Date: 18 December 2023
for the year ended 31 August 2023
| Note | 2023 Pre exceptional |
(Note 9) Exceptional |
2023 Total |
2022 Pre exceptional |
(Note 9) Exceptional |
2022 Total |
|
|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
| Continuing operations | |||||||
| Revenue | 6 | 29,719 | - | 29,719 | 25,220 | - | 25,220 |
| Cost of sales | (19,928) | - | (19,928) | (16,816) | - | (16,816) | |
| Gross profit | 9,791 | - | 9,791 | 8,404 | - | 8,404 | |
| Other income | 7 | 315 | - | 315 | 278 | - | 278 |
| Other expense | 8 | (57) | - | (57) | (34) | - | (34) |
| Distribution expenses | (3,916) | - | (3,916) | (3,434) | - | (3,434) | |
| Administrative expenses | (4,377) | - | (4,377) | (4,631) | (779) | (5,410) | |
| Profit/(loss) from operating activities | 1,756 | - | 1,756 | 583 | (779) | (196) | |
| Finance income | 12 | 70 | - | 70 | 121 | - | 121 |
| Finance expenses | 12 | (445) | - | (445) | (79) | - | (79) |
| Net finance expense | 12 | (375) | - | (375) | 42 | - | 42 |
| Profit/(loss) before income tax | 1,381 | - | 1,381 | 625 | (779) | (154) | |
| Income tax expense | 13 | (86) | - | (86) | (66) | - | (66) |
| Profit/(loss) for the year – continuing operations |
1,295 | - | 1,295 | 559 | (779) | (220) | |
| Discontinued operations | |||||||
| Profit for the year – from discontinued operations, net of tax |
33 | - | 843 | 843 | 358 | 13,120 | 13,478 |
| Profit for the year | 1,295 | 843 | 2,138 | 917 | 12,341 | 13,258 | |
| Other comprehensive(expense)/ income | |||||||
| Items that are or may be reclassified to profit or loss: | |||||||
| Foreign currency translation differences for foreign operations |
12 | 186 | - | 186 | (40) | - | (40) |
| Other comprehensive income for the year | 186 | - | 186 | (40) | - | (40) | |
| Total comprehensive income for the year | 1,481 | 843 | 2,324 | 877 | 12,341 | 13,218 |
| 2023 | 2022 | ||
|---|---|---|---|
| Note | €'000 | €'000 | |
| Profit attributable to: | |||
| Equity holders of the Company | 2,016 | 13,314 | |
| Non-controlling interest | 122 | (56) | |
| 2,138 | 13,258 | ||
| Total comprehensive income attributable to: | |||
| Equity holders of the Company | 2,124 | 13,257 | |
| Non-controlling interest | 200 | (39) | |
| 2,324 | 13,218 | ||
| Earnings per share | |||
| Basic earnings per share (euro cent): | |||
| Continuing | 25 | 88.39 | (7.83) |
| Discontinued | 55.38 | 635.25 | |
| 143.77 | 627.42 | ||
| Diluted earnings per share (euro cent): | |||
| Continuing | 25 | 88.39 | (7.83) |
| Discontinued | 55.38 | 635.25 | |
| 143.77 | 627.42 | ||
| The notes on pages 38 to 90 are an integral part of these consolidated financial statements. |
Padraic Lenehan Ian Ireland
Director Director
as at 31 August 2023
| Note | 31 August 2023 |
31 August 2022 |
|
|---|---|---|---|
| €'000 | €'000 | ||
| Assets | |||
| Property, plant and equipment | 14 | 2,998 | 3,508 |
| Goodwill | 15 | 500 | 500 |
| Intangible assets | 15 | 119 | 122 |
| Investment property | 16 | 540 | 595 |
| Investment in associates | 17 | 224 | - |
| Other investments | 18 | 737 | 736 |
| Total non-current assets | 5,118 | 5,461 | |
| Inventories | 20 | 835 | 865 |
| Biological assets | 21 | 1,366 | 1,044 |
| Trade and other receivables | 22 | 5,385 | 4,176 |
| Contingent consideration receivable | 33 | - | 2,400 |
| Cash at bank | 23 | 6,942 | 7,899 |
| Current tax | - | 36 | |
| Deferred tax asset | 19 | 8 | 9 |
| Total current assets | 14,536 | 16,429 | |
| Total assets | 19,654 | 21,890 | |
| Equity | |||
| Share capital | 24 | 197 | 206 |
| Share premium | 24 | 2,975 | 2,975 |
| Other reserves | 24 | (682) | 1,747 |
| Retained earnings | 13,796 | 9,046 | |
| Total equity attributable to equity holders of the Company | 16,286 | 13,974 | |
| Non-controlling interest | (574) | (674) | |
| Total equity | 15,712 | 13,300 |
| Loans and borrowings | 26 | 548 | 561 |
|---|---|---|---|
| Deferred income | 28 | 153 | 176 |
| Total non-current liabilities | 701 | 737 | |
| Loans and borrowings | 26 | 254 | 272 |
| Trade and other payables | 28 | 2,975 | 3,458 |
| Current tax | 12 | - | |
| Bank overdraft | 23 | - | 4,123 |
| Total current liabilities | 3,241 | 7,853 | |
| Total liabilities | 3,942 | 8,590 | |
| Total equity and liabilities | 19,654 | 21,890 |
The notes on pages 38 to 90 are an integral part of these consolidated financial statements.
Padraic Lenehan Ian Ireland
Director Director
as at 31 August 2023
| Note | 31 August 2023 |
31 August 2022 |
|
|---|---|---|---|
| €'000 | €'000 | ||
| Assets | |||
| Property, plant and equipment | 14 | - | 16 |
| Intangible assets | 15 | - | 1 |
| Investment property | 16 | 70 | 70 |
| Investment in associates | 17 | 224 | - |
| Other investments | 18 | 123 | 233 |
| Total non-current assets | 417 | 320 | |
| Trade and other receivables | 22 | 3,540 | 3,926 |
| Contingent consideration receivable | 33 | - | 2,400 |
| Current tax | 4 | 4 | |
| Cash at bank | 23 | 5,346 | 4,836 |
| Deferred tax asset | 19 | - | 48 |
| Total current assets | 8,890 | 11,214 | |
| Total assets | 9,307 | 11,534 | |
| Equity | |||
| Share capital | 24 | 197 | 206 |
| Share premium | 24 | 2,975 | 2,975 |
| Other reserves | 24 | 1,329 | 1,091 |
| Retained earnings | 4,155 | 3,631 | |
| Total equity | 8,656 | 7,903 | |
| Total non-current liabilities | - | - | |
| Trade and other payables | 28 | 651 | 1,096 |
| Bank overdraft | 23 | - | 2,535 |
| Total current liabilities | 651 | 3,631 | |
| Total liabilities | 651 | 3,631 | |
| Total equity and liabilities | 9,307 | 11,534 |
The notes on pages 38 to 90 are an integral part of these consolidated financial statements.
| Padraic Lenehan | Ian Ireland |
|---|---|
Director Director
| Note | Share capital |
Other undenominated capital |
Share premium |
Translatio n reserve |
Reserve for own shares |
Revaluation reserves |
Share option reserve |
Retained earnings |
Total | Non controlling interest |
Total equity |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
| Balance at 1 September 2022 | 206 | 1,131 | 2,975 | (1,921) | (845) | 3,382 | - | 9,046 | 13,974 | (674) | 13,300 | |
| Total comprehensive income/(expense) | for the year | |||||||||||
| Profit/(loss) for the year |
- | - | - | - | - | - | - | 2,016 | 2,016 | 122 | 2,138 | |
| Other comprehensive (expense)/income Foreign currency translation |
||||||||||||
| differences for foreign operations | - | - | - | 108 | - | - | - | - | 108 | 78 | 186 | |
| Other comprehensive income/(expense) |
- | - | - | 108 | - | - | - | - | 108 | 78 | 186 | |
| Total comprehensive income/(expense) for the year |
- | - | - | 108 | - | - | - | 2,016 | 2,124 | 200 | 2,324 | |
| Transactions with owners recorded directly in equity | ||||||||||||
| Contributions by and distributions to owners | ||||||||||||
| Dividend paid | - | - | - | - | - | - | - | - | - | (100) | (100) | |
| Cancellation of treasury shares | - | - | - | - | 845 | - | - | (845) | - | - | - | |
| Dividends Relodged | (9) | 9 | - | - | - | - | - | 188 | 188 | - | 188 | |
| Transfer of Revaluation Reserves to Retained Earnings |
- | - | - | - | - | (3,382) | - | 3,382 | - | - | - | |
| Total contributions by and distributions to owners |
- | - | - | - | 845 | (3,382) | - | 2,725 | 188 | (100) | 88 | |
| Balance at 31 August 2023 | 197 | 1,140 | 2,975 | (1,813) | - | - | - | 13,787 | 16,286 | (574) | 15,712 |
| Note | Share capital |
Other undenominated capital |
Share premium |
Translatio n reserve |
Reserve for own shares |
Revaluation reserves |
Share option reserve |
Retained earnings |
Total | Non controlling interest |
Total equity |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
| Balance at 1 September 2021 | 376 | 961 | 2,975 | (1,864) | (845) | 3,382 | - | 15,721 | 20,706 | 1,057 | 21,763 | |
| Total comprehensive income/(expense) for the year | ||||||||||||
| Profit/(loss) for the year | - | - | - | - | - | - | - | 13,314 | 13,314 | (56) | 13,258 | |
| Other comprehensive (expense)/income Foreign currency translation |
||||||||||||
| differences for foreign operations | - | - | - | (57) | - | - | - | - | (57) | 17 | (40) | |
| Other comprehensive income/(expense) |
- | - | - | (57) | - | - | - | - | (57) | 17 | (40) | |
| Total comprehensive income/(expense) for the year |
- | - | - | (57) | - | - | - | 13,314 | 13,257 | (39) | 13,218 | |
| Transactions with owners recorded directly in equity | ||||||||||||
| Contributions by and distributions to owners | ||||||||||||
| Share Redemption | 24 | (170) | 170 | - | - | - | - | - | (19,989) | (19,989) | - | (19,989) |
| Derecognition of minority interest | - | - | - | - | - | - | - | - | - | (1,692) | (1,692) | |
| Total contributions by and distributions to owners |
(170) | 170 | - | - | - | - | - | (19,989) | (19,989) | (1,692) | (21,681) | |
| Balance at 31 August 2022 | 206 | 1,131 | 2,975 | (1,921) | (845) | 3,382 | - | 9,046 | 13,974 | (674) | 13,300 | |
for the year ended 31 August 2023
| Balance at 31 August 2023 | 197 | 1,140 | 2,975 | - | 189 | - | - | 4,155 | 8,656 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Total contributions by and distributions to owners | - | - | - | 845 | - | (616) | - | (41) | - | |
| Transfer of Revaluation Reserves to Retained Earnings |
24 | - | - | - | - | - | (616) | - | 616 | - |
| Dividends Relodged | 24 | - | - | - | - | - | - | - | 188 | 188 |
| Cancellation of treasury shares | 24 | (9) | 9 | - | 845 | - | - | - | (845) | - |
| Transactions with owners recorded directly in equity |
||||||||||
| Total comprehensive income for the year |
- | - | - | - | - | - | - | 565 | 565 | |
| Profit for the year | - | - | - | - | - | - | - | 565 | 565 | |
| Balance at 31 August 2022 | 206 | 1,131 | 2,975 | (845) | 189 | 616 | - | 3,631 | 7,903 | |
| Total contributions by and distributions to owners | (170) | 170 | - | - | - | - | - | (19,989) | (19,989) | |
| Share Redemption | 24 | (170) | 170 | - | - | - | - | - | (19,989) | (19,989) |
| Transactions with owners recorded directly in equity |
||||||||||
| Total comprehensive income for the year |
- | - | - | - | - | - | - | 21,615 | 21,615 | |
| Profit for the year | - | - | - | - | - | - | - | 21,615 | 21,615 | |
| Balance at 1 September 2021 |
376 | 961 | 2,975 | (845) | 189 | 616 | - | 2,005 | 6,277 | |
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | ||
| Note | Share capital |
Other undenominated capital |
Share premium |
Reserve for own shares |
Other reserve |
Revaluation reserve |
Share option reserve |
Retained earnings |
Total |
for the year ended 31 August 2023
| Note | 2023 | 2022 | |
|---|---|---|---|
| €'000 | €'000 | ||
| Cash flows from operating activities | |||
| Profit for the year | 2,138 | 13,258 | |
| Adjustments for: | |||
| Depreciation | 14 | 450 | 517 |
| Amortisation of intangibles | 15 | 5 | 5 |
| Amortisation of capital grant | 13 | 50 | |
| Change in fair value of investment property | 16 | 55 | 22 |
| Reversal of investment asset impairment | 17 | (224) | - |
| Loss on sale of investment property | 18 | 2 | - |
| Release of provision against loan to associate | 17 | - | (150) |
| Net finance income | 341 | (68) | |
| Interest charge in relation to lease arrangements | 34 | 26 | |
| Gain on sale of other investments | - | (6) | |
| Loss/(gain) on sale of investment properties | - | 12 | |
| Gain on sale of property, plant and equipment | (42) | (1) | |
| Share-based payment transactions | - | - | |
| Profit for the year – from discontinued operations, net of tax | (843) | (13,478) | |
| Income tax benefit/(expense) | 86 | 53 | |
| Change in inventories | (301) | (489) | |
| Change in trade and other receivables | (1,657) | 400 | |
| Change in trade and other payables | 73 | (551) | |
| Cash (used in)/generated from operating activities | 130 | (400) | |
| Interest paid | (76) | (53) | |
| Income tax (paid)/refund | (25) | (336) | |
| Net cash from operating activities | 29 | (789) | |
| Cash flows from investing activities | |||
| Interest received | 70 | 24 |
| Dividends received | - | 2 | |
|---|---|---|---|
| Proceeds from sale of investment property | 220 | 718 | |
| Proceeds from repayment of loan by associate | - | 403 | |
| Proceeds from sale of property, plant and equipment | 141 | - | |
| Proceeds from sale of other investments | - | 14 | |
| Disposal of discontinued operations, net of cash disposed of | 3,260 | 16,684 | |
| Acquisition of property, plant and equipment | (125) | (239) | |
| Acquisition of intangibles | 15 | (2) | - |
| Net cash generated/(used in) from investing activities | 3,564 | 17,606 | |
| Cash flows from financing activities | |||
| Loan to other investments | 22 | - | (501) |
| Payment of finance lease liabilities | 26 | (342) | (312) |
| Dividend paid to non-controlling interest | (83) | - | |
| Settlement of share based payments | - | - | |
| Share redemption | 24 | - | (19,989) |
| Net cash (used in)/generated from financing activities | (425) | (20,802) | |
| Net decrease in cash and cash equivalents | 3,168 | (3,985) | |
| Cash and cash equivalents at start of year | 3,776 | 7,750 | |
| Effect of exchange rate fluctuations on cash held | (2) | 11 | |
| Cash and cash equivalents at end of year | 23 | 6,942 | 3,776 |
for the year ended 31 August 2023
| Note | 2023 | 2022 | |
|---|---|---|---|
| €'000 | €'000 | ||
| Cash flows from operating activities | |||
| Profit for the year | 565 | 21,615 | |
| Adjustments for: | |||
| Depreciation | 14 | 17 | 1 |
| Change in fair value of investment property | 16 | - | (3) |
| Change in fair value of other investments | 18 | - | - |
| Release of provision against loan to associate | 17 | - | (150) |
| Impairment of other investments | 18 | 110 | - |
| Gain on sale of investment property | - | (20) | |
| Gain on sale of other investments | - | (6) | |
| Profit on sale of subsidiary | (843) | (22,391) | |
| Net finance expense/(income) | (451) | 42 | |
| Reversal of asset impairment | (224) | - | |
| Income tax | 48 | (3) | |
| Change in trade and other receivables | (35) | 70 | |
| Change in trade and other payables | (73) | (910) | |
| Cash used in from operating activities | (886) | (1,755) | |
| Interest paid | (72) | (45) | |
| Income tax paid | - | (1) | |
| Net cash from operating activities | (958) | (1,801) | |
| Cash flows from investing activities | |||
| Interest received | 23 | - | |
| Dividends received | 500 | 2 | |
| Proceeds from repayment of loan stock in associate | - | 403 | |
| Proceeds from sale of subsidiary | 3,260 | 20,083 | |
| Proceeds from sale of other investments | - | 14 | |
| Proceeds from disposal of investment property | 220 | - |
| Share redemption | 24 | - | (19,989) |
|---|---|---|---|
| Net cash used in financing activities | - | (19,989) | |
| Net decrease in cash and cash equivalents | 3,045 | (1,288) | |
| Cash and cash equivalents at start of year | 2,301 | 3,589 | |
| Cash and cash equivalents at end of year | 23 | 5,346 | 2,301 |
| Note | Page | |
|---|---|---|
| 1. | Reporting entity | 40 |
| 2. | Basis of preparation | 40 |
| 3. | Significant accounting policies | 40 |
| 4. | Determination of fair values | 47 |
| 5. | Financial risk management | 48 |
| 6. | Segment reporting | 50 |
| 7. | Other income – continuing operations | 52 |
| 8. | Other expense – continuing operations | 52 |
| 9. | Exceptional items | 53 |
| 10. | Personnel expenses | 53 |
| 11. | Statutory and other information | 55 |
| 12. | Finance income and expense – continuing operations | 56 |
| 13. | Income tax expense – continuing operations | 57 |
| 14. | Property, plant and equipment | 58 |
| 15. | Intangible assets | 60 |
| 16. | Investment property | 63 |
| 17. | Investment in associates | 64 |
| 18. | Other investments | 65 |
| 19. | Deferred tax assets and liabilities | 66 |
| 20. | Inventories | 68 |
| 21. | Biological stock | 69 |
| 22. | Trade and other receivables | 70 |
| 23. | Cash and cash equivalents | 71 |
| 24. | Capital and reserves | 71 |
| 25. | Earnings per share | 73 |
| 26. | Loans and borrowings | 74 |
| 27. | Employee benefits | 76 |
| 28. | Trade and other payables | 77 |
| 29. | Financial instruments | 78 |
|---|---|---|
| 30. | Operating leases | 86 |
| 31. | Capital and other commitments | 86 |
| 32. | Contingencies | 87 |
| 33. | Discontinued operations | 87 |
| 34. | Related parties | 88 |
| 35. | Group entities | 89 |
| 36. | Post balance sheet events | 90 |
| 37. | Approval of consolidated financial statements | 90 |
Donegal Investment Group plc (the "Company") is a public Company incorporated, domiciled and tax resident in the Republic of Ireland. The Company's registered office is at Colab, ATU, Letterkenny, Co. Donegal. The consolidated financial statements of the Company as at and for the year ended 31 August 2023 consolidate the financial statements of the Company and its subsidiaries (together referred to as the "Group") and include the Group's interest in associates using the equity method of accounting. The Company financial statements deal with the Company as a single entity. The Group is primarily involved in the development, purchase and sale of seed potatoes and the rental and sales of property assets.
The consolidated and Company financial statements were authorised for issuance on 18 December 2023.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards and Interpretations (together IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Union ('EU IFRS'). The Company financial statements have been prepared in accordance with EU IFRS, as applied in accordance with the Companies Act 2014, which permits a Company that publishes its consolidated and Company financial statements together to take advantage of the exemption in Section 304 of the Companies Act 2014 from presenting to its members its Company income statement and related notes that form part of the approved Company financial statements.
The Standards and Interpretations applied were those that were effective for accounting year ending on or before 31 August 2023. There were no changes to the Group's or Company's accounting policies as a result of the adoption of new or amended IFRS and IFRIC interpretations.
The financial statements are presented in euro, which is the Company's functional currency. All financial information presented in euro is rounded to the nearest thousand. They are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments, investment property and biological assets.
The financial statements have been prepared on the going concern basis. The Directors have reviewed the Group's business plan for the next 24 months and other relevant information and have a reasonable expectation that the Group will continue in operational existence for the foreseeable future.
The preparation of financial statements requires management to make judgements and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.
In preparing these financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were largely consistent with those that applied in prior years, impairment of trade receivables (note 22 and note 29), classification of shareholding in Kirinyaga Seeds Limited as an investment (note 18), fair value of biological assets (note 20), recognition of deferred tax assets (note 19) and measurement of financial assets (other investments) (note 18).
The estimates and underlying assumptions applied in the measurement of transactions, assets and liabilities are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.
The accounting policies set out below have been applied consistently by the Company in the Company financial statements and throughout the Group for the purposes of the consolidated financial statements.
Subsidiaries are entities controlled by the Group. Control exists when the Group has exposure or rights to variable returns and the ability to affect those returns through its power over an investee. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Associates are those entities for which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group's share of the total change in net assets of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its interest in an associate, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations to make payments on behalf of an associate. When the associate is classified as held for sale, equity accounting ceases.
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated to the extent of the Group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Non-controlling interests are measured initially at their proportionate share of the acquiree's identifiable net assets at the date of acquisition. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
These are in relation to the separate financial statements of the Company. Investments in subsidiaries and associates are carried at cost less impairment.
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rates at the date that the fair value was determined. However, foreign currency differences arising from the translation of an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognised in OCI are reclassified to profit or loss) are recognised in OCI.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to euro at exchange rates at the reporting date. The income and expenses of foreign operations are translated to euro at exchange rates at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income and presented in the translation reserve in equity, except to the extent that the translation difference is allocated to NCI. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost these are reclassified to profit or loss as part of the gain or loss on disposal.
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
| Classification under IFRS 9 | |
|---|---|
| Financial assets: | |
| Trade and other receivables | Amortised cost |
| Other investments | FVOCI |
| Cash and cash equivalents | Amortised cost |
| Derivative financial assets | Fair value – hedging instrument |
| Financial liabilities: | |
| Trade and other payables | Liabilities at amortised cost |
| Interest-bearing borrowings | Liabilities at amortised cost |
Trade receivables are initially measured at their transaction price and other receivables are initially measured at fair value and are thereafter measured at amortised cost using the effective interest method less any provision for impairment.
A provision for impairment of trade and other receivables is recognised based on the expected credit losses ('ECL') for those trade and other receivables. ECLs are a probability–weighted estimate of credit losses. Credit losses are measured as the present value of all expected cash shortfalls related to the receivable.
Loss allowances are based on lifetime ECLs, except for the following which are measured as 12 month ECLs:
A rating system has been utilised in relation to other receivables. A significant increase in credit risk is determined to have occurred if the rating of this system disimproves by a predetermined amount.
Trade receivables are considered to be in default if repayment is considered unlikely or if the trade receivable is more than 365 days past due. Other receivables are considered to be in default if repayment is considered unlikely or if the receivable is not collected within the agreed terms.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a receivable. 12 month ECLs are the portion of ECLs that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the receivable is less than 12 months).
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Non-derivative financial instruments are recognised initially at fair value plus/less any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured at fair value, with changes therein recognised in profit or loss.
Cash and cash equivalents comprise cash balances and call deposits and are accounted for at amortised cost. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Accounting for finance income and expense is discussed in note 3(o).
Equity investments held by the Group and Company are measured at fair value through profit or loss ('FVTPL'). Net gains or losses, including any interest or dividend income, are recognised in profit or loss.
Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.
The Group holds derivative financial instruments to economically hedge its foreign currency risk exposures. Derivatives are initially valued at fair value; any directly attributable costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, with changes therein recognised in profit or loss.
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.
When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to share premium.
Redeemable ordinary shares are redeemable shares at the option of the Company at which time they are presented as equity. On approval of redemption by the Company these redeemable ordinary shares are presented within current liabilities.
Items of property, plant and equipment are measured at cost or deemed cost less accumulated depreciation and accumulated impairment losses (see accounting policy 3(h)). Cost includes expenditure that is directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items of property, plant and equipment and reviewed for impairment annually.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised within 'other income' in profit or loss.
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified as investment property. Any gain arising on remeasurement is recognised directly in other comprehensive income and presented in the revaluation reserve in equity. Any loss is recognised immediately in profit or loss.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that it will produce additional future economic benefits embodied within the part that will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Goodwill/negative goodwill arises on the acquisition of subsidiaries and associates. Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date control is transferred to the Group. Control exists when the Company has the exposure or rights to variable returns and the ability to affect those returns through its power over the investee.
For acquisitions, the Group measures goodwill at the acquisition date as follows:
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured, and settlement is accounted for in equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.
Goodwill is measured at cost less any accumulated impairment losses. In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment.
Expenditure on research activities is recognised in the profit or loss as incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the Group intends to and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Group can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in the profit or loss as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.
Intangible assets that are acquired by the Group in a business combination are recognised initially at their fair value at the date of acquisition, being their cost to the Group and subsequently at cost less accumulated amortisation and impairment losses. Other intangible assets that are acquired by the Group are measured at cost less accumulated amortisation and impairment losses. Expenditure on internally generated goodwill and brands is recognised in profit or loss as an expense as incurred.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit and loss as incurred.
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives are as follows:
Investment properties are properties which are held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, for use in the production or supply of goods and services or for administrative purposes. Investment properties are measured at fair value with any change therein recognised in profit or loss. An external, independent valuer, having an appropriate recognised professional qualification and recent experience in the location and category of property being valued, values the portfolio every twelve months.
When the use of an investment property changes such that it is reclassified as property, plant and equipment, the fair value at the date of reclassification becomes its deemed cost for subsequent accounting purposes.
Goodwill is subject to impairment testing on an annual basis at a consistent time each year and at any time an impairment indicator is considered to exist. Impairment is determined by comparing the carrying amount to the recoverable amount of the groups of CGUs to which the goodwill relates. The recoverable amount is the greater of fair value less costs to sell and value-in-use. When the recoverable amount of the groups of CGUs is less than the carrying amount an impairment loss is recognised.
Where goodwill forms part of a group of CGUs and part of the operation within that unit is disposed of the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the group of CGUs retained.
In the year in which a business combination occurs and the goodwill arising affects the goodwill allocation to CGUs the groups of CGUs are tested for impairment prior to the end of that year. Impairment losses on goodwill are recognised in the Consolidated Income Statement and are not reversed following recognition.
Long-term tangible and intangible assets that are subject to depreciation or amortisation are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in the Consolidated Income Statement 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. When assessing impairment assets are grouped at the lowest levels for which there are separately identifiable cash flows. Non-financial assets that have suffered impairment losses are reviewed for possible reversal of the impairment at each reporting date. The impairment loss is only reversed to the extent that the asset's carrying amount does not exceed that which would have been determined had no impairment been recognised.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9. The Group's impairment policy is explained in the Trade and other receivables note.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.
The fair value of equity-settled share based arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the
vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
The fair value of share based arrangements granted to employees which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value. Any changes in the liability are recognised in profit or loss.
When the holders of the share based arrangements are classified as equity settled but subsequently the holders are given the option to cash settle, the arrangements are reclassified as cash settled share based payment arrangements with the fair value movement on remeasurement at the date of reclassification being reflected within equity. The amount included within the share-based payment reserve is subsequently reclassified to liabilities and subject to remeasurement thereafter.
A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised at a point in time when control of the goods has transferred to the customer, which can be shipping or delivery depending on the terms of trade with the customer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. No revenue is recognised if there is significant continuing management involvement with the goods.
Rental income from the Group's investment properties is recognised as other income in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
Government grants are recognised initially as deferred income when there is reasonable assurance that it will be received and that the Group will comply with the conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised as income in profit or loss on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in profit or loss as other operating income on a systematic basis over the useful life of the asset.
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as other property and equipment above.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following:
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, to the extent that the right-of-use asset is reduced to nil, with any further adjustment required from the remeasurement being recorded in profit or loss.
The Group has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Finance income comprises interest income on funds invested, dividend income and net foreign exchange gains. Interest income is recognised in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Finance expenses comprise interest expense on borrowings, net foreign exchange losses and net losses on financial assets at FVTPL. All finance expenses are recognised in profit or loss using the effective interest method.
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries and associates to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. For investment property that is measured at fair value deferred tax is provided at the rate applicable to the sale of the property except for that part of the property that is depreciable and the Group and the Company's business model is to consume substantially all of the value through use. In the latter case the tax rate applicable to income is used.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax assets and liabilities are offset only if certain criteria are met.
A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of other segments. Segment information is presented in respect of the Group's business and geographical segments. The Group's primary format for segment reporting is based on business segments. The business segments are determined based on the Group's management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments (other than investment property) and related revenue, loans and borrowings and related expenses, corporate assets (primarily the Company's headquarters) and head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill, including amounts arising in business combinations.
A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operation that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is represented as if the operation had been discontinued from the start of the comparative period.
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Biological assets are measured at fair value less costs to sell, with any change therein recognised in profit or loss.
Exceptional items are those that are separately disclosed by virtue of their nature or amount in order to highlight such items within the Statement of Profit or Loss and Comprehensive Income and results for the year. Examples of such items may include significant restructuring programmes, profits or losses on termination of operations, litigation costs and settlements and significant impairments of assets. Group management exercises judgement in assessing each particular item which, by virtue of their scale or nature, should be highlighted and disclosed in the Statement of Profit or Loss and Comprehensive Income and notes to the Group Financial Statements as exceptional items. Exceptional items are included within the Statement of Profit or Loss and Comprehensive Income caption to which they relate and are separately disclosed in the notes to the Group Financial Statements.
A non-current asset or a group of assets containing a non-current asset (a disposal group) is classified as held for sale if its carrying amount will be recovered principally through sale rather than through continuing use, it is available for immediate sale and sale is highly probable within one year. On initial classification as held for sale, non-current assets and disposal groups are measured at the lower of carrying amount and fair value less costs to sell with any adjustments taken to profit or loss. The same applies to gains and losses on subsequent remeasurement although gains are not recognised in excess of any cumulative impairment loss. Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to stocks, financial assets, deferred tax assets, employee benefit assets, biological assets and investment property, which continue to be measured in accordance with the Company's accounting policies and any equity accounted investee is no longer equity accounted. Intangible assets and tangible fixed assets once classified as held for sale are not amortised or depreciated.(w) New standards and interpretations
The accounting policies adopted are consistent with those of the previous year except for the following new and amended IFRS and IFRIC interpretations adopted by the Group and Company in these financial statements.
Insurance Contracts – IFRS 17
| Leases (Amendment - Liability in a Sale and Leaseback) - IFRS 16 | |
|---|---|
| Annual Improvements to Presentation of Financial Statements - IAS 1 | |
| Accounting policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Accounting Estimates) - IAS 8 |
Income Taxes (Amendment – Deferred Tax related to Assets and Liabilities arising from a Single Transaction) - IAS 12
The amendments listed above did not result in material changes to the Group Consolidated Financial Statements.
A number of new accounting standards and interpretations have been issued but are not yet effective for the Group. The relevant accounting standards and interpretations for the Group in the current financial year are not expected to have a material impact on the Group.
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. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
External independent valuers, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, value the Group's investment property portfolio every year. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation in an orderly transaction between market participants after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash flows expected to be received from renting out the property taking into account expected rental growth rates, void periods, occupancy rates and lease incentive costs. A yield that reflects the specific risks inherent in the net cash flows is then applied to the net annual cash flows to arrive at the property valuation.
Valuations reflect, when appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation, and the market's general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between the Group and the lessee; and the remaining economic life of the property.
The fair value of financial assets is determined by reference to their quoted closing bid price at the reporting date. Where investments do not have a quoted bid price their fair value is estimated by the Directors based on recent market transactions and other information available at the reporting date.
The fair value of trade and other receivables and other payables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. Where the time to maturity or settlement is less than twelve months, the cost of the item is deemed to reflect its fair value.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs.
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the Group's market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
The fair value of employee stock options are measured at the closing market price at year end less the exercise price of the instrument.
The Group has exposure to the following risks:
This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.
The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group's Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer, with the default risk of those customers being impacted by economic and legal changes in their sectors, primarily being the agricultural sector. Customers are subject to initial credit checks including trade references with credit limits reviewed regularly based on purchasing and payment performance. New customers are subject to restricted credit limits until a credit history is established. Due to the established nature of the businesses and customer relationships, the majority of customers have long-standing trading histories with the Group. Management ensure that, where possible, suitable credit arrangements or letters of credit are in place before dealing with new customers outside Ireland and the UK.
Goods are sold subject to retention of title clauses, so that in the event of non-payment the Group may have a secured claim.
The Group establishes an allowance for impairment that represents its estimate of expected credit losses in respect of trade and other receivables. The main component of this allowance is a specific loss component that relates to individually significant exposures.
The Group applies the simplified approach to providing for expected credit losses (ECLs) permitted by IFRS 9 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the trade receivables.
All allowance for impairment of trade and other receivables is established on both the ECLs and information available that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor,
probability the debtor will enter bankruptcy or financial reorganisation and default in payments are considered indicators that the receivable is impaired. The amount of the impairment allowance is the difference between the assets carrying amount and the present value of the estimated future cashflows. The amount of the impairment allowance is recognised in the Income Statement.
ECLs, except for the following, are measured as 12 month ECLs:
A rating system has been utilised in relation to other receivables. A significant increase in credit risk is determined to have occurred if the rating of this system disimproves by a predetermined amount.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a receivable. 12 month ECLs are the portion of ECLs that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the receivable is less than 12 months).
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
At 31 August 2022, the Group had committed bank facilities of €8.4m (31 August 2022: €8.4m), including a Group overdraft facility of €8.4m (31 August 2022: €8.4m) for working capital requirements.
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices and the United Kingdom leaving the EU ('Brexit') will affect the Group's income and expenses or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
At times, the Group buys forward contracts in order to manage market risks although the use of such instruments is limited.
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of Group entities, primarily the Euro (€) and Sterling (GBP). The principal exposure relates to transactions denominated in GBP from entities with Euro functional currencies.
Overdrafts and borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily Euro and GBP. This provides an economic hedge. In 2023 and 2022, the group entered into a foreign exchange hedge to further mitigate foreign currency exposure.
The Group considers that its capital comprises share capital, share premium, retained earnings and other reserves (excluding the translation, non-controlling interest and share options reserves) which amounted to €18.1m, at 31 August 2023 (2022: €16.7m).
The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital, which the Group defines as net operating income divided by total shareholders' equity, excluding non-controlling interests. The Board of Directors also monitor the level of dividends to ordinary shareholders.
From time to time the Company purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily the shares are intended to be used for awarding shares under the Group's share option programme.
The Group purchased no treasury shares during the year (2022: Nil).
As approved by shareholders at the Extraordinary General Meeting held on 11 February 2022, the Company was authorised to redeem up to 1,307,190 Redeemable Ordinary Shares. 1,306,497 Ordinary Shares (approximately 46.21 per cent of each Shareholder's total holding of Ordinary Shares) as at the conversion date of 14 February 2022 were converted into Redeemable Ordinary Shares and redeemed at €15.30 per share. On redemption, these shares were cancelled from the issued share capital of the Company with €170k being credited to the Company's Other Undenominated Capital. €19,989,000 was paid during the period in relation to the redemption of Redeemable Ordinary shares.
This surplus capital returned to shareholders was generated following the sale of the Group's shareholding in Nomadic Dairy Limited business on 5 November 2021 and is a strong endorsement of the Group's strategy in respect of its non-core assets which was first set out in 2012.
There were no changes in the Group's approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the chief operating decision maker (CODM) which the Group has identified to the Board of Directors in order to allocate resources to the segments and to assess their performance.
Produce: The growing, sales and distribution of seed potatoes and rental and sale of related property assets.
Dairy: The manufacture, sale and distribution of dairy products. Information relevant to this segment, the activities of which are classified as a discontinued operation, is included in note 33.
The main factors employed in the identification of the single segment include:
| Produce | Total – Group | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| €'000 | €'000 | €'000 | €'000 | |
| Group | ||||
| Revenue – continuing operations | 29,719 | 25,220 | 29,719 | 25,220 |
| Segmental result from continuing operations before exceptional items |
1,811 | 605 | 1,811 | 605 |
| Exceptional items, net of tax | - | (779) | ||
| Change in fair value of investment property | (55) | (22) | ||
| Net finance income/expense | (375) | 42 | ||
| Income tax (expense)/credit | (86) | (66) | ||
| (Loss)/profit for the year– continuing operations | 1,295 | (220) |
| Produce | Total – Group | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| €'000 | €'000 | €'000 | €'000 | |
| Segment assets | 12,704 | 11,582 | 12,704 | 11,582 |
| Contingent consideration receivable | - | 2,400 | ||
| Deferred tax asset | 8 | 9 | ||
| Cash at bank (unallocated) | 6,942 | 7,899 | ||
| Total assets as reported in Group Balance Sheet | 19,654 | 21,890 | ||
| Segment liabilities | 3,140 | 3,634 | 3,140 | 3,634 |
| Bank overdraft (unallocated) | - | 4,123 | ||
| Loans and borrowings (unallocated) | 802 | 833 | ||
| Total liabilities as reported in Group Balance Sheet | 3,942 | 8,590 | ||
| Other segment information | ||||
| Capital expenditure | 127 | 632 | 127 | 632 |
| Depreciation and amortisation | 455 | 522 | 455 | 522 |
| Change in fair value of investment property and other assets | (55) | 128 | (55) | 128 |
| Ireland Europe |
Rest of world | Total – Group | ||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Total revenue from external customers | ||||||||
| (by origin) | 28,666 | 24,290 | 1,011 | 929 | 43 | 1 | 29,719 | 25,220 |
| Segment assets as reported in Group Balance Sheet |
15,617 | 17,287 | 3,003 | 3,080 | 1,034 | 1,523 | 19,654 | 21,890 |
| Capital expenditure | 87 | 254 | 224 | 356 | 98 | 22 | 409 | 632 |
Information about products and service
The Group determines that the categories used in investor presentations can be used to meet the objective of the disaggregation disclosure requirement in paragraph 114 of IFRS 15, which is to disaggregate revenue from contracts with customers into categories that depicts how the nature, amount, timing and uncertainty of revenue and cashflows are affected by economic factors.
The following table illustrates the disaggregation disclosure by principal products and services to external customers.
| Produce | |||
|---|---|---|---|
| 2023 | 2022 | ||
| €'000 | €'000 | ||
| Seed potatoes | 29,719 | 25,220 | |
| 29,719 | 25,220 |
The Group had one customer that comprised greater than 10% of its total revenue in the year ended 31 August 2023 (2022: One)
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Income from investment property rentals | 49 | 64 |
| Release of provision against loan to associate | - | 150 |
| Reversal of investment asset impairment* | 224 | - |
| Profit on disposal of other investments | - | 6 |
| Government grant | - | 57 |
| Gain on disposal of property, plant and equipment | 42 | 1 |
| 315 | 278 |
*The Group's 22.4% equity investment in North Western Livestock Holdings Limited (NWLH) which was previously fully impaired was revalued to €224,000 which represents 83.4% of its original carrying value of €268,426. This revaluation follows NWLH successful completion of an asset realisation programme and the decision of NWLH board to liquidate the company. This investment is now classified as an Investment in associates.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Change in fair value of investment property | (55) | (22) |
| Loss on disposal of investment property | (2) | (12) |
| (57) | (34) |
Exceptional items are those that, in the Director's judgement, should be separately disclosed by virtue of their nature or amount. Such items are included in the Statement of profit or loss and comprehensive income caption to which they relate and are separately disclosed in the notes to the Group Financial Statements.
The Group reports the following exceptional items:
| 2023 | 2022 | ||
|---|---|---|---|
| €'000 | €'000 | ||
| Redundancy costs | a | - | (713) |
| Other legal costs | b | - | (66) |
| Exceptional costs before tax – continuing operations | - | (779) | |
| Income tax expense in respect of exceptional items | - | - | |
| Exceptional costs after tax – continuing operations | - | (779) | |
| Profit on disposal of Nomadic Dairy Limited | c | 843 | 13,120 |
| Exceptional profit from discontinued operations | 843 | 13,120 | |
| Total exceptional income for the year | 843 | 12,341 |
a) Redundancy costs were incurred in the year in respect of a group restructuring, including in particular the wind up of the Group's Head Office operations
b) Other legal costs are costs in respect of the share redemption incurred during 2022.
c) Profit on disposal of Nomadic Dairy Limited, disposed on 5 November 2021 with final contingent payment being received in June 2023. (note 33).
The average number of persons employed by the Group during the year was as follows:
| 2023 | 2022 | |
|---|---|---|
| Number | Number | |
| Production | 34 | 34 |
| Administration | 15 | 18 |
| 49 | 52 |
The staff costs for the year for the above employees were:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Wages and salaries (including compensation for loss of office or other termination benefits) | 2,219 | 4,039 |
| Social welfare costs | 283 | 337 |
| Retirement benefit (note 27) | 152 | 221 |
| 2,654 | 4,597 |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Wages and salaries (including compensation for loss of office or other termination benefits) | 110 | 1,801 |
| Social welfare costs | - | 72 |
| Retirement benefit (note 27) | - | 6 |
| Fees paid for Qualifying Services to Non-Executive Directors* | 357 | 172 |
| 467 | 2,051 |
*'Qualifying services', in relation to any person, means his or her services as a director of the company and his or her services, while director of the company, as director of any of its subsidiary undertakings or otherwise in connection with the management of the affairs of the company or any of its subsidiary undertakings
The average number of persons employed by the Company during the year was as follows:
| 2023 | 2022 |
|---|---|
| Number | Number |
| Administration - |
2 |
| - | 2 |
The staff costs for the year for the above employees were:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Wages and salaries (including compensation for loss of office or other termination benefits) | 18 | 1,863 |
| Social welfare costs | 1 | 77 |
| Retirement benefit (note 27) | - | 59 |
| 1,999 | 1,999 | |
| The Director's costs for the year were: | 2023 | 2022 |
| €'000 | €'000 | |
| Wages and salaries (including compensation for loss of office or other termination benefits) | 110 | 1,801 |
| Social welfare costs | - | 72 |
| Retirement benefit (note 27) | - | 6 |
| Fees paid for Qualifying Services to Non-Executive Directors* | 357 | 172 |
| 467 | 2,051 |
*'Qualifying services', in relation to any person, means his or her services as a director of the company and his or her services, while director of the company, as director of any of its subsidiary undertakings or otherwise in connection with the management of the affairs of the company or any of its subsidiary undertakings
The profit for the year has been arrived at after charging the following amounts:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Grant income | - | 57 |
| Depreciation | 450 | 517 |
| Amortisation of intangible assets | 5 | 5 |
| Auditor's remuneration – Group: | ||
| – audit fees | 64 | 82 |
| – taxation services | 33 | 80 |
| – other non-audit services | 3 | 5 |
| Auditor's remuneration – Company: | ||
| – audit fees | 25 | 43 |
| – taxation services | 17 | 37 |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Recognised in profit or loss | ||
| Interest income on loan stock | 70 | 24 |
| Net foreign exchange gain | - | 95 |
| Dividends received | - | 2 |
| Finance income | 70 | 121 |
| Interest expense on bank loans and overdraft | (110) | (79) |
| Net foreign exchange loss | (335) | - |
| Finance expense | (445) | (79) |
| Net finance expense/(income) recognised in profit or loss | (375) | 42 |
| 2023 | 2022 | |
| €'000 | €'000 | |
| Recognised directly in other comprehensive income | ||
| Foreign currency translation differences for foreign operations | 186 | (40) |
| Finance (expense)/income recognised in other comprehensive income, net of tax | 186 | (40) |
| Finance (expense)/income recognised in other comprehensive income, net of tax | ||
| Recognised in: | ||
| Translation reserve | 108 | (57) |
| 186 | (40) | |
|---|---|---|
| Non-Controlling interest | 78 | 17 |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Current tax expense | ||
| Current year | 175 | 129 |
| Adjustment in respect of prior years | (90) | - |
| 85 | 129 | |
| Deferred tax credit | ||
| Origination and reversal of temporary differences | 1 | (63) |
| 1 | (63) | |
| Income tax expense/(credit) | 86 | 66 |
| 2023 | 2022 | |
| €'000 | €'000 | |
| Tax reconciliation | ||
| Profit/(loss) for year before tax – continuing activities | 1,381 | (154) |
| Tax at 12.5% (2021: 12.5%) | 173 | (19) |
| Expenses not allowable for tax purposes | 66 | 172 |
| Income not taxable | (18) | (118) |
| Income taxed at higher rate | 6 | 12 |
| Franked investment income | (28) | - |
| Impact of changes in tax rates | - | (1) |
| Management charges utilised | (6) | (12) |
| Losses forward utilised | (7) | - |
| Origination and reversal of temporary timing differences | (10) | - |
| Adjustment in respect of prior years | (90) | 32 |
| Income tax expense/(credit) | 86 | 66 |
| Land and buildings |
Plant and equipment |
Fixtures and fittings |
Motor vehicles & tanks |
Total | |
|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | |
| Group | |||||
| Cost | |||||
| Balance at 1 September 2021 | 2,047 | 4,235 | 594 | 465 | 7,341 |
| Additions | - | 438 | 18 | 176 | 632 |
| Disposals | - | (133) | (4) | (37) | (174) |
| Effect of movements in exchange rates | (5) | 105 | - | - | 100 |
| Reclassification | 5 | 3 | (29) | - | (21) |
| Assets transferred to investment property (note 16) | (67) | - | - | - | (67) |
| Balance at 31 August 2022 | 1,980 | 4,648 | 579 | 604 | 7,811 |
| Balance at 1 September 2022 | 1,980 | 4,648 | 579 | 604 | 7,811 |
| Additions | - | 294 | 3 | 110 | 407 |
| Disposals | - | (194) | (2) | (128) | (324) |
| Effect of movements in exchange rates | 6 | (372) | - | - | (366) |
| Balance at 31 August 2023 | 1,986 | 4,376 | 580 | 586 | 7,528 |
| Depreciation and impairment losses | |||||
| Balance at 1 September 2021 | 860 | 2,279 | 586 | 262 | 3,987 |
| Depreciation for the year | 132 | 255 | 22 | 108 | 517 |
| Elimination on disposal | - | (132) | (4) | (37) | (173) |
| Effect of movements in exchange rates | (2) | (4) | - | - | (6) |
| Reclassification | 11 | 2 | (35) | - | (22) |
| Balance at 31 August 2022 | 1,001 | 2,400 | 569 | 333 | 4,303 |
| Balance at 1 September 2022 | 1,001 | 2,400 | 569 | 333 | 4,303 |
| Depreciation for the year | 126 | 185 | 26 | 113 | 450 |
| Elimination on disposal | - | (95) | (2) | (100) | (197) |
| Effect of movements in exchange rates | 3 | (29) | - | - | (26) |
| Balance at 31 August 2023 | 1,130 | 2,461 | 593 | 346 | 4,530 |
| Carrying amounts | |||||
| At 1 September 2021 | 1,187 | 1,956 | 8 | 203 | 3,354 |
| At 31 August 2022 | 979 | 2,248 | 10 | 271 | 3,508 |
|---|---|---|---|---|---|
| At 1 September 2022 | 979 | 2,248 | 10 | 271 | 3,508 |
| At 31 August 2023 | 856 | 1,915 | (14) | 240 | 2,998 |
| Land and buildings |
Plant and equipment |
Fixtures and fittings |
Total | |
|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | |
| Company | ||||
| Cost | ||||
| Balance at 1 September 2021 | 67 | 34 | 41 | 142 |
| Reclassification | - | 6 | (29) | (23) |
| Assets transferred to investment property (note 16) | (67) | - | - | (67) |
| Balance at 31 August 2022 | - | 40 | 12 | 52 |
| Balance at 1 September 2022 | - | 40 | 12 | 52 |
| Additions | - | - | - | - |
| Balance at 31 August 2023 | - | 40 | 12 | 52 |
| Depreciation | ||||
| Balance at 1 September 2021 | - | 20 | 38 | 58 |
| Depreciation for the year | - | - | 1 | 1 |
| Reclassification | - | 12 | (35) | (23) |
| Balance at 31 August 2022 | - | 32 | 4 | 36 |
| Balance at 1 September 2022 | - | 32 | 4 | 36 |
| Depreciation for the year | - | (32) | (4) | (36) |
| Balance at 31 August 2023 | - | - | - | - |
| Carrying amounts | ||||
| At 1 September 2021 | 67 | 14 | 3 | 84 |
| At 31 August 2022 | - | 8 | 8 | 16 |
| At 1 September 2022 | - | 8 | 8 | 16 |
| At 31 August 2023 | - | - | - | - |
The Company holds no leases (2022: None).
The Group presents right-of-use assets in 'property, plant and equipment', in the same line item as it presents underlying assets of the same nature that it owns. The movement in the Group's right-of-use assets is as follows:
| Land and buildings |
Plant and equipment |
Fixtures and fittings |
Motor vehicles | Total | |
|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | |
| Group | |||||
| At 1 September 2021, net carrying amount | 354 | 350 | 11 | 155 | 870 |
| Additions during the year | - | 250 | 8 | 136 | 394 |
| Depreciation charge during the year | (82) | (102) | (5) | (96) | (285) |
| Translation adjustment | - | (1) | - | - | (1) |
| At 31 August 2022, net carrying amount | 272 | 497 | 14 | 195 | 978 |
| At 1 September 2022, net carrying amount | 272 | 497 | 14 | 195 | 978 |
| Additions during the year | - | 197 | - | 82 | 279 |
| Depreciation charge during the year | (82) | (63) | (5) | (96) | (246) |
| Translation adjustment | - | (4) | - | - | (4) |
| At 31 August 2023, net carrying amount | 190 | 627 | 9 | 181 | 1,007 |
| Acquisition related |
||||
|---|---|---|---|---|
| Goodwill | Software | intangibles | Total | |
| €'000 | €'000 | €'000 | €'000 | |
| Group | ||||
| Cost | ||||
| Balance at 1 September 2021 | 500 | 270 | 86 | 856 |
| Additions | - | - | - | - |
| Balance at 31 August 2022 | 500 | 270 | 86 | 856 |
| Balance at 1 September 2022 | 500 | 270 | 86 | 856 |
| Additions | - | 2 | - | 2 |
| Balance at 31 August 2023 | 500 | 272 | 86 | 858 |
| Amortisation and impairment losses | ||||
| Balance at 1 September 2021 | - | 169 | 60 | 229 |
| Amortisation for year | - | 5 | - | 5 |
| Balance at 31 August 2022 | - | 174 | 60 | 234 |
| Balance at 31 August 2023 | - | 179 | 60 | 239 |
|---|---|---|---|---|
| Amortisation for year | - | 5 | - | 5 |
| Balance at 1 September 2022 | - | 174 | 60 | 234 |
| At 1 September 2021 | 500 | 101 | 26 | 627 |
|---|---|---|---|---|
| At 31 August 2022 | 500 | 96 | 26 | 622 |
| At 1 September 2022 | 500 | 96 | 26 | 622 |
| At 31 August 2023 | 500 | 93 | 26 | 619 |
Intangible assets are amortised to the profit or loss over their estimated useful lives as follows: Software – 4 years; Acquisition related intangibles – 3 to 10 years.
Acquisition related intangibles include licenses and customer and brand related intangibles.
For the purposes of impairment testing, goodwill is allocated to the Group's specific business to which the goodwill originally derived, which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.
| 2023 | 2023 | 2022 | 2022 | |
|---|---|---|---|---|
| Seed Potatoes | Total | Seed Potatoes | Total | |
| €'000 | €'000 | €'000 | €'000 | |
| Goodwill at the end of the year | 500 | 500 | 500 | 500 |
Goodwill acquired through business combinations has been allocated to the above CGU for the purpose of impairment testing. The Group tests goodwill for impairment annually or more frequently if there are indicators that goodwill may be impaired. The recoverable amounts of the CGU are based on value in use calculations.
The key assumptions used to assess the recoverable amount of cash generating units and related impairment are as per below.
The cash flows are based on management approved budgets for FY2024 projected forward for an additional four years. The growth within the projections assumes an annual increase of 2% (2022: 2%), reflecting inflation and no other growth. For the purpose of calculating the terminal value, a terminal growth rate of 0% has been used.
The cashflow forecasts are discounted using appropriate risk adjusted discount rates averaging 6.0% (2022: 6.0%) reflecting the risk associated with the individual future cash flows and the risk-free rate.
The Group assesses the uncertainty of the above estimates by performing a sensitivity analysis. Management believes, therefore, that any reasonable change in any of the key assumptions would not cause the carrying value of the goodwill to exceed the recoverable amount.
No impairment of goodwill was identified in 2023 as a result of this review (2022: €Nil).
| Software |
|---|
| €'000 |
| 56 |
| - |
| Balance at 31 August 2022 | 56 |
|---|---|
| Balance at 1 September 2022 | 56 |
| Additions | - |
| Balance at 31 August 2023 | 56 |
| Amortisation and impairment losses | |
| Balance at 1 September 2021 | 55 |
| Amortisation for the year | - |
| Balance at 31 August 2022 | 55 |
| Balance at 1 September 2022 | 55 |
| Amortisation for the year | 1 |
| Balance at 31 August 2023 | 56 |
| Carrying amounts | |
| At 1 September 2021 | 1 |
| At 31 August 2022 | 1 |
| At 1 September 2022 | 1 |
| At 31 August 2023 | 0 |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Balance at start of year | 595 | 1,500 |
| Reclassification from property plant and equipment | - | 67 |
| Disposal | - | (950) |
| Change in fair value | (55) | (22) |
| Balance at end of year | 540 | 595 |
Investment property, comprising land and buildings, is held for capital appreciation and/or rental income and is not occupied by the Group. This also includes parts of properties owned by the Group which are sublet to third parties. The Group's investment properties at 31 August 2023 are located in Ireland. Investment property previously included the Oatfield site in Letterkenny which was sold during 2022. The Group holds an interest in an office building along with one other property asset. €67,000, which was held as Land and Buildings at 31 August 2021, was reclassified as investment property during 2022.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Company | ||
| Balance at start of year | 70 | 200 |
| Reclassification from property plant and equipment | - | 67 |
| Disposal | - | (200) |
| Change in fair value | - | 3 |
| Balance at end of year | 70 | 70 |
The fair value of investment property within the Group is determined by external registered independent appraisers having an appropriate recognised professional qualification and with recent experience in the location and category being valued. In general, valuations have been undertaken having regard to comparable market transactions between informed market participants at the 'highest and best use'. All of the investment property at 31 August 2023 was valued in accordance with consultation with external experts.
The fair value measurement for investment property of €540,000 (2022: €595,000) has been categorised as a Level 3 fair value based on the input to the valuation technique used (see Note 4).
The table above reflects the reconciliation from opening balance to closing balance for Level 3 fair values.
A fair value movement of (€55,000) was identified in 2023 (2022: €22,000) in relation to Group investment property.
A fair value movement of €Nil was identified in 2023 (2022: €3,000) in relation to Company investment property.
The following table shows the valuation techniques used in measuring the fair value of investment property, as well as the significant unobservable inputs used. The comparable market transaction method is used for land held for sale or capital appreciation. The discounted cash flow approach is used for buildings that are sublet to third parties.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Comparable market transactions | 540 | 595 |
| Valuation Technique | Significant unobservable inputs |
Inter-relationship between key unobservable inputs and fair value measurement |
|---|---|---|
| Comparable market transactions: This method of valuation is used for land held for sale or capital appreciation. The value is based on comparable market transactions after discussion with independent registered property appraisers. |
Ireland Comparable market price |
The estimated fair value would increase/(decrease) if: Comparable market prices were higher/(lower) |
The Group's share of after tax profits in its associates for the year was €Nil (2022: €Nil).
| 2023 Investment in associate |
2023 Loans to associate |
2033 Total |
2022 Investment in associate |
2022 Loans to associate |
2022 Total |
|
|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Balance at start of year | - | - | - | - | 261 | 261 |
| Release of provision previously | ||||||
| recognised against loan to associate | - | - | - | - | 150 | 150 |
| Reversal of impairment of investment | 224 | - | 224 | |||
| Repayment of loan & interest in | ||||||
| associate | - | - | - | - | (412) | (412) |
| Interest charged | - | - | - | - | 1 | 1 |
| Balance at end of year | 224 | - | 224 | - | - | - |
Investments in associates comprise of North Western Livestock Holdings Limited (NWLH). The impairment of the original equity investment in NWLH has been reversed with repayment of the investment expected in 2024.
| 2023 Investment in Associate |
2023 Loans to Associate |
2023 Total |
2022 Investment in Associate |
2022 Loans to Associate |
2022 Total |
|
|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Company | ||||||
| Balance at start of year | - | - | - | - | 261 | 261 |
| Release of provision against loan to associate |
- | - | - | - | 150 | 150 |
| Reversal of impairment of investment | 224 | - | 224 | |||
| Repayment of loan stock & interest in associate |
- | - | - | - | (412) | (412) |
| Interest charged | - | - | - | - | 1 | 1 |
|---|---|---|---|---|---|---|
| Balance at end of year | 224 | - | 224 | - | - | - |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Non-current investments | ||
| Other investments | 737 | 736 |
The fair value of unquoted shares with a carrying value of €737,000 (2022: €736,000) is based on the original cost of the investment in Utkal Seeds Limited. There is no indication of impairment of the investment based on progress to date and given the absence of any recent transactions and high level of uncertainty associated with future cashflows, the directors consider the original cost to be the best reflection of the fair value of the investment.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Movement during the year | ||
| Balance at start of year | 736 | 745 |
| Fair value movement of equity investments | 1 | - |
| Disposals | - | (9) |
| Balance at end of year | 737 | 736 |
The Group acquired 17.12% shareholding in Utkal Seeds Limited, a produce company based in India, on 8 March 2019. During the course of the financial year ended 31 August 2020, the Group increased its shareholding in Utkal Seeds Limited to 19.85 %.
Equity investments included €9,000 quoted shares in 2021 which were sold for €15,000 in 2022.
The Group's exposure to credit, currency and interest rate risks related to other investments is disclosed in note 29.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Company | ||
| Non-current investments | ||
| Investments in subsidiaries | 233 | 233 |
| Impairment of investment in subsidiaries | (110) | - |
| 133 | 233 | |
| 2023 Equity investments |
2023 Investments in subsidiaries |
2023 Total |
2022 Equity investments |
2022 Investments in subsidiaries |
2022 Total |
|
|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Movement during the year | ||||||
| Balance at start of year | - | 233 | 233 | 9 | 233 | 242 |
| Sale of equity investment | - | - | - | (9) | - | (9) |
| Impairment of investment in subsidiaries | - (110) |
(110) | - | - | ||
| Balance at end of year | - | 123 | 123 | - | 233 | 233 |
Other equity investments included €9,000 quoted shares in 2021, which were sold for €15,000 in 2022. Quoted shares have been stated at market value in the manner stated in Note 4 and Note 29. Carrying value of company investment in non-trading subsidiary Zopitar Limited written down by €110,000 at year end.
Deferred tax assets and liabilities are attributable to the following:
| Assets | Liabilities | Net | ||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Property, plant and equipment | - | - | (67) | (68) | (67) | (68) |
| Other investments | - | - | - | - | - | - |
| Tax losses forward | 73 | 74 | - | - | 73 | 74 |
| Other adjustments | 4 | 3 | (2) | - | 2 | 3 |
| Deferred tax assets/(liabilities) | 77 | 77 | (69) | (68) | 8 | 9 |
| Set off of tax | (69) | (68) | 69 | 68 | - | - |
| Net deferred tax assets/(liabilities) | 8 | 9 | - | - | 8 | 9 |
Deferred tax assets have not been recognised in respect of the following items:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Tax losses | 66 | - |
| Investment property | 745 | 745 |
Investment property tax losses for which no deferred tax asset has been recognised have no expiry date. It not anticipated that the unrecognised deferred tax assets will be utilised by the Group.
Deferred tax assets and liabilities are attributable to the following:
| Assets | Liabilities | Net | ||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Property, plant and equipment | - | 1 | - | - | - | 1 |
| Other investments | - | - | - | - | - | - |
| Tax losses forward | - | 47 | - | - | - | 47 |
| Deferred tax assets/(liabilities) | - | 48 | - | - | - | 48 |
| Set off of tax | - | - | - | - | - | - |
| Net deferred tax assets | - | 48 | - | - | - | 48 |
The Company has an unrecognised deferred tax assets of €66,000 at 31 August 2023 (2022: €Nil).
Deferred tax assets and liabilities are attributable to the following:
| Balance at 1 Sep 2021 |
Recognised in profit or loss (1) |
Recognised in other comprehensive income |
Balance at 31 Aug 2022 |
Recognised in profit or loss (1) |
Recognised in other comprehensiv e income |
Balance at 31 Aug 2023 |
|
|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Group | |||||||
| Property, plant and equipment |
(6) | (62) | - | (68) | 1 | - | (67) |
| Investment property | (100) | 100 | - | - - |
- | - | |
| Other investments | (3) | 3 | - | - - |
- | - | |
| Share based payments | - | - | - | - | - | - | - |
| Other deferred tax asset | 55 | 22 | - | 77 | (2) | - | 75 |
| (54) | 63 | - | 9 | (1) | - | 9 |
| Recognised in other |
Recognised in other |
||||||
|---|---|---|---|---|---|---|---|
| Balance at 1 Sep 2021 |
Recognised in profit or loss |
comprehensive income |
Balance at 31 Aug 2022 |
Recognised in profit or loss |
comprehensiv e income |
Balance at 31 Aug 2023 |
|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Company | |||||||
| Property, plant and equipment |
1 | - | - | 1 | (1) | - | - |
| Investment property | - | - | - | - | - | - | - |
| Other investments | (3) | 3 | - | - | - | - | - |
| Tax losses forward | 47 | - | - | 47 | (47) | - | - |
| Share based payments | - | - | - | - | - - |
- | |
| 45 | 3 | - | 48 | (48) | - | - |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Packaging and other stocks | 835 | 865 |
| 835 | 865 | |
| 2023 | 2022 | |
| €'000 | €'000 | |
| Inventories impairment | ||
| Balance at start of year | 3 | 1 |
| Provision for impairment | 14 | 3 |
| Impairment reversal | (3) | (1) |
| Balance at end of year | 14 | 3 |
In 2023, an impairment charge to adjust the carrying value of inventory to net realisable value amounted to €14,000 (2022: €3,000). The charge is included in cost of sales.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Balance at start of year | 1,044 | 1,024 |
| Additions | 1,343 | 1,005 |
| Harvested stock charged to profit and loss | (1,230) | (946) |
| Movement in fair value of stock | 204 | (36) |
| Foreign exchange movement | 5 | (3) |
| Balance at end of year | 1,366 | 1,044 |
The fair value measurements for the Group's biological assets have been categorised as level 3 fair values based on the inputs to the valuation techniques used which are not based on observable market data.
The fair value of biological assets is determined by management using a discounted cashflow approach and the table below summarises the unobservable inputs used for seed potatoes.
| Product | Valuation Technique | Significant unobservable inputs | Inter-relationship between key unobservable inputs and fair value measurement |
|---|---|---|---|
| Seed potatoes | Discounted cashflows This method of valuation considers the present value of the net cashflows expected to be generated by the biological assets. The cashflow projections include estimates of yields based on test digs allowing for 5% weight loss, sales prices, production and harvest costs including storage and grading. The expected net cashflows are discounted using a risk-adjustment factor to factor in |
Inclusive of • estimated yields based on historical yields that are adjusted to reflect current growing conditions, variety of product and farm locations • estimated cash inflows based on forecast pricing • estimated production, |
The estimated fair value would increase/(decrease) if: • estimated yields were higher/(lower) • estimated potato prices were higher/(lower) • estimated production, harvesting and transportation costs were |
| volatility of weather, production and pricing and future farming costs. |
harvesting and transportation costs • risk adjusted discount rates |
lower/(higher) • the risk-adjusted discount rates were lower/(higher) |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Current trade and other receivables | ||
| Trade receivables | 3,900 | 2,134 |
| Value added tax | 84 | 252 |
| Other receivables | - | 230 |
| Loan to other investments* | 445 | 501 |
| Prepayments | 956 | 1,059 |
| 5,385 | 4,176 | |
| * Loan carries an interest rate of 12% | ||
| 2023 | 2022 | |
| €'000 | €'000 | |
| Company | ||
| Current trade and other receivables | ||
| Other receivables due from subsidiary undertakings | 3,500 | 3,500 |
| Trade receivable | 6 | - |
| Value added tax | 25 | - |
| Other receivables | - | 230 |
| Prepayments | 9 | 196 |
| 3,540 | 3,926 |
The Group and Company exposure to credit and currency risks and impairment losses related to trade and other receivables are disclosed in note 29.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Cash at bank | 6,942 | 7,899 |
| Bank overdraft | - | (4,123) |
| Bank balances net of overdrafts due within one year | 6,942 | 3,776 |
| 2023 | 2022 | |
| €'000 | €'000 | |
| Company | ||
| Cash at bank | 5,346 | 4,836 |
| Bank Overdraft | - | (2,535) |
| Bank balances including overdrafts due within one year, net | 5,346 | 2,301 |
At the year end, there was a Group facility with the bank which allows for legal offset of the Group and certain subsidiary bank balances. These amounts are presented gross on the statement of financial position as there was no intention to settle net these balances. The Company's bank overdraft is repayable on demand and used for cash management purposes. The Group's and Company's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 29.
| Ordinary Shares of €0.13 each |
Redeemable Ordinary Shares of €0.13 each |
Deferred Shares of €0.13 each |
Total | ||||
|---|---|---|---|---|---|---|---|
| Number | €'000 | Number | €'000 | Number | €'000 | €'000 | |
| Authorised | |||||||
| Balance at start of year | 50,000,000 | 6,500 | 1,307,190 | 170 | 1,307,190 | 170 | 6,840 |
| Amendment to the capital in the period |
- | - | - | - | - | - | - |
| Balance at end of year | 50,000,000 | 6,500 | 1,307,190 | 170 | 1,307,190 | 170 | 6,840 |
| Issued, called up and fully paid | |||||||
| Balance at start of year | 1,589,461 | 206 | - | - | - | - | 206 |
| Cancelled in the period | (67,168) | (9) | - | - | - | - | (9) |
| Balance at end of year | 1,522,293 | 197 | - | - | - | - | 197 |
The Ordinary Shares and the Redeemable Ordinary Shares rank pari passu. A Deferred Share has no rights other than a right to participate in any surplus arising on the winding up of the Company up to the nominal amount paid up on the Deferred Share.
During the course of the year the Group cancelled the remaining treasury shares held which amounted to 67,168 ordinary shares of 13 cent each. (2022: 67,168).
Following the cancellation of the remaining treasury shares, the Company's issued Ordinary Share Capital is 1,522,293.
Share premium represents the excess amount received above nominal value on issuance of ordinary shares.
The translation reserve comprises cumulative foreign currency differences arising from the translation of the net assets of foreign operations until the investments are derecognised.
The reserve for the Company's own shares comprised the cost of the Company's shares held by the Group. Following the cancellation of the remaining treasury shares €845,000 was transferred from the Reserve for own shares to Retained Earnings.
The Group purchased no treasury shares during the financial year ended 31 August 2023 (2022 Nil).
The revaluation reserve relates to the revaluation of property, plant and equipment and includes revaluation gains or losses upon the reclassification of property, plant and equipment to investment property. Following a review of the Revaluation Reserve carrying value (€3,382,000 at 31 August 2022) it was concluded that this balance should be transferred to Retained Earnings as the properties associated with this balance have now been fully realised.
A dividend was not declared in respect of 2023 or 2022. A minority interest dividend of €100,000 was paid during the year (2022: €Nil) by subsidiary undertakings of the Company.
The calculation of basic and diluted earnings/(loss) per share is set out below:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Profit attributable to ordinary shareholders | ||
| (Loss)/profit for the year – continuing operations | 1,295 | (220) |
| Profit for the year – discontinued operations | 843 | 13,478 |
| Profit for the year | 2,138 | 13,258 |
| Profit attributable to ordinary shareholders | 2,016 | 13,314 |
| 2023 | 2022 | |
| Number | Number | |
| Weighted average number of ordinary shares in thousands of shares | ||
| Weighted average number of ordinary shares in issue for the year | 1,589 | 2,189 |
| Weighted average number of treasury shares | (67) | (67) |
| Denominator for basic earnings per share | 1,522 | 2,122 |
| Effect of share options in issue | - | - |
| Weighted average number of ordinary shares (diluted) at end of year | 1,522 | 2,122 |
| 2023 | 2022 | |
| Earnings per share: | ||
| Basic earnings per share (euro cent): | ||
| Continuing | 88.39 | (7.83) |
| Discontinued | 55.38 | 635.25 |
| 143.77 | 627.42 | |
| Diluted earnings per share (euro cent): | ||
| Continuing | 88.39 | (7.83) |
| Discontinued | 55.38 | 635.25 |
| 143.77 | 627.42 |
This note provides information about the contractual terms of the Group's interest-bearing loans and borrowings, which are measured at amortised cost. For more information about the Group's exposure to interest rate, foreign currency and liquidity risk, see note 29.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Non-current liabilities | ||
| Lease liabilities | 548 | 561 |
| 548 | 561 | |
| Current liabilities | ||
| Lease liabilities | 254 | 272 |
| 254 | 272 | |
| Total | 802 | 833 |
| Terms and debt repayment schedule Terms and conditions of outstanding loans were as follows: |
| Currency | Nominal interest rate |
Year of maturity |
2023 Face value |
2023 Carrying amount |
2022 Face value |
2022 Carrying amount |
|
|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | ||||
| Lease liabilities | eur | 2 - 6% | 2023-2028 | 870 | 802 | 898 | 833 |
| Total interest-bearing liabilities |
870 | 802 | 898 | 833 |
Lease liabilities are payable as follows:
| Future minimum lease payments 2023 |
Interest 2023 |
Present value of minimum lease payments 2023 |
Future minimum lease payments 2022 |
Interest 2022 |
Present value of minimum lease payments 2022 |
|
|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Less than one year | 286 | 33 | 253 | 301 | 29 | 272 |
| Between one and two years | 266 | 21 | 245 | 228 | 20 | 208 |
| Between two and three years | 185 | 10 | 175 | 190 | 10 | 180 |
| Between three and four years | 110 | 4 | 106 | 124 | 5 | 119 |
| Between four and five years | 23 | - | 23 | 55 | 1 | 54 |
| 870 | 68 | 802 | 898 | 65 | 833 |
The maturity of non current borrowing is as follows:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Between 1 and 2 years | 245 | 208 |
| Between 2 and 6 years | 304 | 353 |
| 549 | 561 |
| Other adjustments |
Bank borrowings |
Lease liabilities |
Share capital and share premium |
Other res & retained earnings & NCI |
Total | |
|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| Balance at 1 September 2021 | - | - | 731 | 3,351 | 18,412 | 22,494 |
| Changes from financing cashflows | ||||||
| Loan to other investments | (501) | - | - | - | - | (501) |
| Lease repayments | - | - | (312) | - | - | (312) |
| Share redemption | - | - | - | - | (19,989) | (19,989) |
| Total changes from financing cashflows | (501) | - | (312) | - | (19,989) | (20,802) |
| Share Redemption | - | - | - | (170) | 170 | - |
| Derecognition of minority interest | - | - | - | - | (1,692) | (1,692) |
| New leases incl interest | - | - | 414 | - | - | 414 |
| Other changes | - | - | - | - | 13,218 | 13,218 |
| Total equity related and other changes | - | - | 414 | (170) | 11,696 | 11,940 |
| Balance at 31 August 2022 | (501) | - | 833 | 3,181 | 10,119 | 13,632 |
| Balance at 1 September 2022 | (501) | - | 833 | 3,181 | 10,119 | 13,632 |
| Changes from financing cashflows | ||||||
| Lease repayments | - | - | (342) | - | - | (342) |
| Dividend Paid to non-controlling interest | - | - | - | - | (83) | (83) |
| Total changes from financing cashflows | - | - | (342) | - | (83) | (425) |
| Dividends Relodged | - | - | - | - | 188 | 188 |
| Dividend Witholding Tax re non-controlling interest |
- | - | - | - | (17) | (17) |
| New leases incl interest | - | - | 311 | - | - | 311 |
| Other changes | 56 | - | - | - | 2,324 | 2,380 |
| Total equity related and other changes | 56 | - | 311 | - | 2,495 | 2,862 |
| Balance at 31 August 2023 | (445) | - | 802 | 3,181 | 12,531 | 16,069 |
The Group operates two defined contribution schemes, one of which is operated by the Company. The assets of the schemes are held separately from those of the Companies in independently administered funds. The pension charge represents contributions payable by the companies to the funds and totalled €125,000 for the year ended 31 August 2023 (2022: €221,000). At 31 August 2023, €19,000 (2022: €18,000) was included within creditors in respect of defined contribution pension liabilities.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Group | ||
| Current | ||
| Trade payables | 721 | 722 |
| PAYE | 50 | 37 |
| PRSI | 33 | 32 |
| Accrued expenses | 2,169 | 2,557 |
| Capital grant | 2 | - |
| Value added tax | - | 110 |
| 2,975 | 3,458 | |
| Non current | ||
| Capital grant | 153 | 176 |
| 153 | 176 | |
| The Group's exposure to currency and liquidity risk related to trade and other payables is disclosed in note 29. | ||
| 2023 | 2022 | |
| €'000 | €'000 | |
| Company | ||
| Payables due to subsidiary undertakings | 129 | 129 |
| Other trade payables | 108 | 154 |
| Accrued expenses | 414 | 703 |
| Value added tax | - | 110 |
| 651 | 1,096 |
The Company's exposure to currency and liquidity risk related to trade and other payables is disclosed in note 29. Payables due to subsidiary undertakings are interest free and repayable on demand.
The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy.
| Fair value through profit or loss |
Assets at amortised cost |
Liabilities at amortised cost |
Total carrying amount |
Fair value | |
|---|---|---|---|---|---|
| 2023 €'000 |
2023 €'000 |
2023 €'000 |
2023 €'000 |
2023 €'000 |
|
| Group | |||||
| Other investments | 737 | - | - | 737 | 737 |
| Investment in associates | - | 224 | - | 224 | 224 |
| Trade receivables and other receivables* | - | 4,429 | - | 4,429 | 4,429 |
| Cash at bank | - | 6,942 | - | 6,942 | 6,942 |
| Trade and other payables | - | - | (2,975) | (2,975) | (2,975) |
| Finance lease liability | - | - | (802) | (802) | (802) |
| 737 | 11,595 | (3,777) | 8,555 | 8,555 |
*For the purposes of this analysis prepayments have not been included within other receivables. Carrying value of trade receivables and other receivables are stated net of impairment provision where appropriate and consequently fair value is considered to approximate carrying value.
| Fair value through profit or loss |
Assets at amortised cost |
Liabilities at amortised cost |
Total carrying amount |
Fair value | |
|---|---|---|---|---|---|
| 2022 €'000 |
2022 €'000 |
2022 €'000 |
2022 €'000 |
2022 €'000 |
|
| Group | |||||
| Other investments | 736 | - | - | 736 | 736 |
| Trade receivables and other receivables* | - | 3,117 | - | 3,117 | 3,117 |
| Contingent consideration receivable | - | 2,400 | - | 2,400 | 2,400 |
| Cash at bank | - | 7,899 | - | 7,899 | 7,899 |
| Trade and other payables | - | - | (3,458) | (3,458) | (3,458) |
| Finance lease liability | - | - | (833) | (833) | (833) |
| Bank overdraft | - | - | (4,123) | (4,123) | (4,123) |
| 736 | 13,416 | (8,414) | 5,738 | 5,738 |
*For the purposes of this analysis prepayments have not been included within other receivables. Carrying value of trade receivables and other receivables are stated net of impairment provision where appropriate and consequently fair value is considered to approximate carrying value.
| Fair value through profit or loss |
Assets at amortised cost |
Liabilities at amortised cost |
Total carrying amount |
Fair value | |
|---|---|---|---|---|---|
| 2023 €'000 |
2023 €'000 |
2023 €'000 |
2023 €'000 |
2023 €'000 |
|
| Company | |||||
| Trade receivables due from group companies | - | 3,500 | - | 3,500 | 3,500 |
| Trade receivables and other receivables* | - | 40 | - | 40 | 40 |
| Investment in associates | - | 224 | - | 224 | 224 |
| Cash at bank | - | 5,346 | - | 5,346 | 5,346 |
| Payables due to subsidiary undertaking | - | - | (129) | (129) | (129) |
| Trade and other payables | - | - | (522) | (522) | (522) |
| - | 9,110 | (651) | 8,459 | 8,459 |
*For the purposes of this analysis prepayments have not been included within other receivables. Carrying value of trade receivables and other receivables are stated net of impairment provision where appropriate and consequently fair value is considered to approximate carrying value.
| Fair value through profit or loss |
Assets at amortised cost |
Liabilities at amortised cost |
Total carrying amount |
Fair value | |
|---|---|---|---|---|---|
| 2022 €'000 |
2022 €'000 |
2022 €'000 |
2022 €'000 |
2022 €'000 |
|
| Company | |||||
| Trade receivables due from group companies | - | 3,500 | - | 3,500 | 3,500 |
| Trade receivables and other receivables* | - | 230 | - | 230 | 230 |
| Contingent consideration receivable | - | 2,400 | - | 2,400 | 2,400 |
| Cash at bank | - | 4,836 | - | 4,836 | 4,836 |
| Payables due to subsidiary undertaking | - | - | (129) | (129) | (129) |
| Trade and other payables | - | - | (967) | (967) | (967) |
| Bank Overdraft | - | - | (2,535) | (2,535) | (2,535) |
| - | 10,966 | (3,631) | 7,335 | 7,335 |
*For the purposes of this analysis prepayments have not been included within other receivables. Carrying value of trade receivables and other receivables are stated net of impairment provision where appropriate and consequently fair value is considered to approximate carrying value.
The carrying amounts of loans and receivables, trade and other payables are deemed to be a reasonable approximation of fair value. The basis for determining fair values is disclosed in note 4. The fair value of secured loans and finance lease liabilities has been calculated using discounted cash flows. The Group has availed of the exemption in IFRS 7 'Financial instruments: Disclosure' in respect of additional disclosures where fair value closely approximates the amortised cost carrying value.
Credit risk is the risk of financial loss to the Group and Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group and Company's receivables from customers and other equity investments. The carrying amount of financial assets represents the maximum credit exposure of the Group and Company. The maximum exposure to credit risk at the reporting date was:
| 2023 | 2022 | ||
|---|---|---|---|
| €'000 | €'000 | ||
| Group | |||
| Investment in associates | 17 | 224 | - |
| Other investments | 18 | 737 | 736 |
| Trade receivables | 22 | 3,900 | 2,134 |
| Contingent consideration receivable | 33 | - | 2,400 |
| Other receivables and valued added tax | 22 | 529 | 983 |
| 5,390 | 6,253 |
| Note | Carrying amount | ||
|---|---|---|---|
| 2023 | 2022 | ||
| €'000 | €'000 | ||
| Company | |||
| Loans due from associates | 17 | - | - |
| Other investments | 18 | - | - |
| Trade receivables from subsidiary undertakings | 22 | 3,500 | 3,500 |
| Contingent consideration receivable | 33 | - | 2,400 |
| Other receivables including value added tax | 22 31 |
230 | |
| 3,531 | 6,130 |
The maximum exposure to credit risk for trade receivables of the Group at the reporting date by geographic region was:
| Carrying amount | |||
|---|---|---|---|
| 2023 | 2022 | ||
| €'000 | €'000 | ||
| Group | |||
| Ireland | 1,121 | 820 | |
| United Kingdom | 263 | 215 | |
| Other Euro-zone countries | 909 | 680 | |
| Other regions | 1,607 | 419 | |
| 3,900 | 2,134 |
All receivables from related parties arise in Ireland and are Euro denominated. Similarly, loans to associates arise in Ireland and are Euro denominated.
The maximum exposure to credit risk from trade receivables of the Company at the reporting date by geographic region was:
| Carrying amount | |||
|---|---|---|---|
| 2023 | 2022 | ||
| €'000 | €'000 | ||
| Company | |||
| Ireland | 6 | - | |
| The maximum exposure to credit risk for trade receivables of the Group at the reporting date by type of customer was: | |||
| Carrying amount | |||
| 2023 | 2022 |
| Group | ||
|---|---|---|
| Wholesale customers | 1,798 | 519 |
| Retail customers | 2,102 | 1,615 |
| 3,900 | 2,134 |
€'000 €'000
The maximum exposure to credit risk for trade receivables of the Company at the reporting date by type of customer was:
| Carrying amount | |||
|---|---|---|---|
| 2023 | 2022 | ||
| €'000 | €'000 | ||
| Company | |||
| Wholesale customers | - | - |
The following table details the ageing of gross trade receivables and the related loss allowance:
| Gross | Expected | Loss | Expected loss | Loss | ||||
|---|---|---|---|---|---|---|---|---|
| loss rate | allowance | Net | Gross | rate | allowance | Net | ||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | 2022 | |
| €'000 | % | €'000 | €'000 | €'000 | % | €'000 | €'000 | |
| Group | ||||||||
| Not past due | 907 | 0.0% | - | 907 | 532 | 0% | - | 532 |
| Past due < 30 days | 78 | 0.0% | - | 78 | 27 | 3.7% | (1) | 26 |
| Past due 30 – 365 days | 2,988 | 2.4% | (73) | 2,915 | 1,574 | 3.2% | (51) | 1,523 |
| Past due > 365 days | 656 | 100.0% | (656) | - | 716 | 92.6% | (663) | 53 |
| 4,629 | 15.4% | (729) | 3,900 | 2,849 | 25.1% | (715) | 2,134 |
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Balance at start of year | 715 | 630 |
| Remeasurement of loss allowance | 14 | 85 |
| Balance at end of year | 729 | 715 |
No significant credit risk is perceived with respect to receivables due from related parties. Loans to associates are routinely reviewed for impairment. No impairment was recognised in respect of associate loans in 2023 (2022: €Nil). The Company considers the credit risk to be low in relation to amounts owed from Group Companies and therefore the expected credit loss is immaterial.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
| Carrying amount |
Contractual cash flows |
6 mths or less |
6 – 12 mths |
1 – 2 years |
2 – 5 years |
More than 5 years |
|
|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| 31 August 2023 | |||||||
| Group | |||||||
| Lease liabilities | (802) | (870) | (143) | (143) | (266) | (318) | - |
| Trade and other payables |
(2,975) | (2,975) | (2,975) | - | - | - | - |
| (3,777) | (3,845) | (3,118) | (143) | (266) | (318) | - |
| Carrying amount |
Contractual cash flows |
6 mths or less |
6 – 12 mths |
1 – 2 years |
2 – 5 years |
More than 5 years |
|
|---|---|---|---|---|---|---|---|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| 31 August 2022 | |||||||
| Group | |||||||
| Lease liabilities | (833) | (898) | (151) | (150) | (228) | (369) | - |
| Bank overdraft | (4,123) | (4,123) | (4,123) | - | - | - | - |
| Trade and other payables |
(3,458) | (3,458) | (3,458) | - | - | - | - |
| (8,414) | (8,479) | (7,732) | (150) | (228) | (369) | - | |
| Carrying amount |
Contractual cash flows |
6 mths or less |
6 – 12 mths |
1 – 2 years |
2 – 5 years |
More than 5 years |
|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| 31 August 2023 | |||||||
| Company | |||||||
| Payables due to subsidiary undertakings |
(129) | (129) | (129) | - | - | - | - |
| Trade and other payables |
(522) | (522) | (522) | - | - | - | - |
| (651) | (651) | (651) | - | - | - | - | |
| Carrying amount |
Contractual cash flows |
6 mths or less |
6 – 12 mths |
1 – 2 years |
2 – 5 years |
More than 5 years |
|
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | |
| 31 August 2022 | |||||||
| Company | |||||||
| Payables due to subsidiary undertakings |
(129) | (129) | (129) | - | - | - | - |
| Bank overdraft | (2,535) | (2,535) | (2,535) | - | - | - | - |
| Trade and other payables |
(967) | (967) | (967) | - | - | - | - |
| (3,631) | (3,631) | (3,631) | - | - | - | - |
Exposure to currency risk
The Group's exposure to foreign currency risk on financial instruments that impact profit or loss at the balance sheet date was as follows:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Trade receivables | 1,781 | 634 |
| Bank balance | 270 | 2,067 |
| Trade payables | (488) | (449) |
| Gross balance sheet exposure | 1,563 | 2,252 |
The following significant exchange rates applied during the year:
| Average rate | Reporting date spot rate |
||||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | ||
| GBP to Euro | 1.15 | 1.18 | 1.17 | 1.16 |
A 10 percent strengthening of the euro against the following currencies at 31 August 2023 would have (decreased)/increased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2022.
| Equity | Profit or loss | |
|---|---|---|
| €'000 | €'000 | |
| GBP | ||
| 31 August 2023 | (358) | 82 |
| 31 August 2022 | (364) | 70 |
A 10 percent weakening of the euro against the above currencies at 31 August would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
| 2023 | 2023 | 2023 | 2023 | |
|---|---|---|---|---|
| Total | Level 1 | Level 2 | Level 3 | |
| €'000 | €'000 | €'000 | €'000 | |
| Equity investments | 737 | - | - | 737 |
| 2022 | 2022 | 2022 | 2022 | |
| Total | Level 1 | Level 2 | Level 3 | |
| €'000 | €'000 | €'000 | €'000 | |
| Equity investments | 736 | - | - | 736 |
| Class of financial instruments measured at fair value |
Level | Valuation technique | Significant unobservable inputs |
|---|---|---|---|
| Equity investment | Level 2 | Fair value is estimated by reference to the observable share price of the entity. |
Not applicable |
| Equity investment | Level 3 | Fair value is based on cost of investment | Not applicable |
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Quoted equity investments | ||
| Balance at start of year | - | 9 |
| Revaluation | - | - |
| Disposal of quoted equity investment | - | (9) |
| Balance at end of year | - | - |
The interest rates used to discount estimated cash flows, where applicable, are based on the government yield curve at the reporting date plus an adequate credit spread, and were as follows:
| 2023 | 2022 | |
|---|---|---|
| Leases | 2.0% – 6.0% | 2.0% – 6.0% |
The future minimum lease payments receivable under non-cancellable leases are as follows:
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Less than one year | 39 | 39 |
| Between one and five years | 69 | 111 |
| 108 | 150 |
During the year ended 31 August 2023, €49,000 was recognised as rental income in the income statement (2022: €64,000). Expense charges against this income was as follows: maintenance costs €Nil (2022: €Nil).
At the year end, there were capital commitments of €116,000 authorised by the Directors and not provided for in the financial statements (2022: €Nil). The Group currently has financial commitments in respect of the planting of seed potatoes for the 2023/2024 season totalling 1,629 hectares (2022: 1,669 hectares).
Capital grants up to a maximum of €309,000 (2022: €309,000) could become repayable in certain circumstances as set out in the agreements.
On 5 November 2021, the Group announced that it has completed the disposal of its 80 per cent owned subsidiary, Nomadic Dairy Limited (Nomadic) and therefore the trade for the period is presented as discontinued operations. The profit incurred in respect of its dairy operations in the period prior to its disposal on 5 November 2021 was €358,000.
The carrying value of net assets disposed of amounted to €11,084,000 resulting in the recognition of a profit on disposal of €13,120,000 at 31 August 2022 after accounting for the derecognition of the non-controlling interest of €1,692,000.
The overall transaction value for 100 per cent share capital of Nomadic comprises of (1) €26.1m of cash consideration (including existing Nomadic cash of €3.1m) on completion (Initial Consideration), subject to customary completion accounts adjustments, and (2) a further contingent consideration of up to a maximum of €6m dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022, inclusive. The Group held an 80 per cent interest in Nomadic with its share of the Initial Consideration being €20.9m and a further €4.8m being its potential share of the maximum contingent consideration receivable.
At 31 August 2022, the fair value of the potential contingent consideration recognised was €2.4m, representing the Directors best estimate of the amount which would be received by the Group and which would ultimately depend on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022. On 10 July 2023 the Group received €3,340,000 in full and final settlement of contingent consideration receivable resulting in a further profit on disposal of €843,000 net of costs.
| 2023 | 2022 | |
|---|---|---|
| €'000 | €'000 | |
| Results for the period after taxation | - | 358 |
| Profit on disposal of asset held for sale, net | 843 | 13,120 |
| Profit for the period on discontinued operations | 843 | 13,478 |
The Parent and ultimate controlling party of the Group is Donegal Investment Group plc.
In addition to their salaries, the Group also provided non-cash benefits to Directors and Executive officers and contributes to a postemployment defined contribution pension plan on their behalf.
| Key management personnel compensation comprised: | 2023 | 2022 |
|---|---|---|
| €'000 | €'000 | |
| Short-term employee benefits (including compensation for loss of office or other termination benefits) | - | 1,801 |
| Post-employment benefits | - | 6 |
| Share-based payments | - | - |
| - | 1,807 |
Directors of the Company control 6.33% (2022: 6.65%) of the voting shares of the Company as at 31 August 2023.
The Group continued to enter into transactions in the normal course of business with its associates and other related parties during the period. The Group has entered into consultancy agreements with Culkeen Consulting Limited, which is owned and operated by Non-Executive Director, Mr Ian Ireland, and Drumgornan Limited, which is owned and operated by Non-Executive Director, Mr Padraic Lenehan. These companies will provide management services as required to support the strategy of the board going forward. There were no other transactions with related parties in the period or changes to transactions with related parties disclosed in the 2023 Consolidated Financial Statements that had a material effect on the financial position or the performance of the Group.
The Group also entered into a loan agreement with Utkal Seeds Limited in 2022, loaning the Indian Seed Potato Company €501,000 at a coupon rate of 12%. The loan outstanding at 31st August 2023 is €445,000 (Movement in outstanding balance of €56,000 is foreign exchange translation difference) with interest accrued of €63,000 at year end.
| Transaction value | Balance outstanding | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| €'000 | €'000 | €'000 | €'000 | |
| Purchase of goods and services | ||||
| Purchase by Group from Culkeen Consulting Limited | 241 | 120 | 23 | 21 |
| Purchase by Group from Drumgornan Limited | 117 | 52 | 10 | 52 |
| Purchase by Group from Related Parties | 358 | 172 | 33 | 73 |
| Loans to related parties | ||||
| Loan to Utkal Seeds Limited | 445* | 501 | ||
| *Movement in outstanding balance of €56,000 is foreign exchange translation difference | ||||
| Other related party transactions – Company |
| Transaction value | Balance outstanding | ||
|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 |
| €'000 | €'000 | €'000 | €'000 |
| By parent to subsidiaries | - | 890 | - | - |
|---|---|---|---|---|
All outstanding balances with these related parties are priced on an arm's length basis and are to be settled in cash within six months of the reporting date. None of the balances are secured.
| Country of incorporation |
Ownership interest | ||
|---|---|---|---|
| 2023 | 2022 | ||
| % | % | ||
| Subsidiaries | |||
| Zopitar Limited Registered office: Colab, ATU, Letterkenny, Co Donegal |
Ireland | 83 | 83 |
| IPM Potato Group Limited Registered office: Unit 602, Q House, Furze Rd, Sandyford Industrial Estate, Dublin 18 |
Ireland | 100 | 100 |
| Donegal Potatoes Limited Registered office: Colab, ATU, Letterkenny, Co Donegal |
Ireland | 100 | 100 |
| IPM Holland B.V. Registered office: Marssumerdyk 1, 9033 WD Deinum, The Netherlands |
Holland | 100 | 100 |
| MPCO Limited Registered office: Colab, ATU, Letterkenny, Co Donegal |
Ireland | 100 | 100 |
| High Meadow Patents Limited Registered office: Ballyraine, Letterkenny, Co Donegal |
Ireland | 100 | 100 |
| AJ Allan (Potato Merchants) Limited Registered office: East Mill, Brechin, Angus, UK, DD9 7HJ |
UK | 100 | 100 |
| AJ Allan (Brechin) Limited Registered office: East Mill, Brechin, Angus, UK, DD9 7HJ |
UK | 100 | 100 |
| Solanex Limited Registered office: Rua Samuel Hahnemann nº17, Jardim Santo Andre, São João da Boa-SP, CEP 13872 – 029, Brazil |
Brazil | 85 | 85 |
| IPM Brasil Registered office: Avenida Dr José Bonifácio Coutinho Nogueira no. 214, Sala 232, Jardim Madalena CEP 13091 – 611, Campinas-SP, Brazil. |
Brazil | 100 | 100 |
| IPM France Registered office: 1 rue de Bellonne 62490 Noyelles Sous Bellonne, France |
France | 100 | 100 |
| IPM Portugal Batatas de Semente e Produtos Agrícolas, Unipessoal Lda Rua Domingos Sequeira no. 27 – 3rd J,1350 – 119 Lisbon Portugal |
Portugal | 100 | 100 |
| Kirinyaga Seeds Limited | |||
|---|---|---|---|
| LR No. 1065, Ngong Road, P.O. Box 25290 – 00603 – Lavington, Nairobi, Kenya | Kenya | 51 | 51 |
| IPM Kenya Limited | |||
| McKay Chambers, Westlands Street, P.O Box 29884, Westlands, Nairobi, Kenya | Kenya | 100 | 100 |
| Associates: | |||
| North Western Livestock Holdings Limited | |||
| Registered office: Finisklin Business Park, Finisklin, Co Sligo | Ireland | 22.4 | 22.4 |
The following subsidiaries will avail of the filing exemption available under Section 357 of the Companies Act 2014, whereby they will annex the financial statements of Donegal Investment Group plc to their annual returns: IPM Potato Group Limited, MPCO Limited and High Meadow Patents Limited.
There have been no significant events subsequent to the year end, which would require adjustment to, or disclosure in, the financial statements.
The financial statements were approved by the Directors on 18 December 2023.
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