annual report 2009

LOCAL ROOTS,GLOBAL REACH

ANNUAL REPORT 2009

1

LOCAL ROOTS, GLOBAL REACHFrom its humble roots in the Windward Islands, Winfresh is diversifying and branching out into the global marketplace.

Following its re-branding last year, the Winfresh Group is on the verge of launching a range of new products. This will not take the Group away from its traditional banana base but, instead, will strengthen its product base to allow it to grow with confidence.

As a supplier and manufacturer of food products, the Group has deliberately chosen products that appeal to consumers growing awareness of the wholesomeness of the food and food products they consume. The aim of the Group is to bring all natural healthful food and food products to consumers in the Caribbean and globally.

This year’s annual report projects the “new” outlook of the company as it sets out on a Global path while maintaining its Local Roots.

Our Values, Our Promise....• Allnatural,freshandwholesomeproductstotheconsumer;• Efficientcompetitiveservicesandproductstoourcustomers;• Fairdealstoalloursuppliersandsensitivity;• Carefortheneedsofouremployees;• Sensitivityfortheconcernsofallstakeholders;• Sustainablegrowthinvalueforourshareholders;• Promotionofadiversified,dynamicandsustainableagriculturalsector for the Windward Islands.

2

CONTENTS

Corporate Profile 03

Chairman’s Statement 05

Board of Directors 06

Directors Report07

Management Team 10

Financial Highlights11

Winfresh Family14

Financial Report 19

33

CORPORATE PROFILE

MISSION STATEMENT To serve our customers with high quality differentiated products and services at a just price and to return fair prices to our suppliers and fair value to our shareholders. We aim to do so by working in partnership with our suppliers in a manner that is socially and morally responsible and commands respect for our integrity and the positive contributions we make to the societies we serve in providing products and services to our customers.

INCORPORATION These financial statements include the financial statements of Winfresh Limited (“Winfresh”) and its wholly-owned subsidiary, Winfresh (UK) Limited, (“Winfresh UK”). Both companies were incorporated in 1994. Winfresh was incorporated under the laws of Saint Lucia and continued under the Company’s Act, 1996, while Winfresh UK was incorporated under the Companies Act, 1985 of England and Wales.

THE WINFRESH GROUP The Winfresh Group comprises Winfresh, Winfresh UK and associated companies: Windward Isles Banana Company (UK) Limited, Windward Isles Banana Company Holdings (Jersey) Limited, Winfruit Limited and Lauders Agro Processors Inc.

SHAREHOLDERS The shareholders of Winfresh are the Governments of the four Windward Islands, St. Lucia, Dominica, St. Vincent and the Grenadines and Grenada; Saint Lucia Banana Corporation (“SLBC”), Dominica Banana Holding Company (“DBHC”); St Vincent Banana Growers’ Association (“SVBGA”) and the Grenada Banana Co-operative Society (“GBCS”). SVBGA and GBCS have been dissolved and the shares held by them are to be transferred in accordance with the provisions of the Shareholders’ Agreement.

GROUP DIRECTORS Montgomery Daniel - Chairman Cecil Ryan Vanoulst Jno Charles Deles Warrington Peter Josie Elias Amorsingh—February 2010 Ferron Lowe Gemma Bain-Thomas Bernard Cornibert (Winfresh UK only) Martina Edwin (Winfresh UK only)

GROUP EXECUTIVES Bernard Cornibert Chief Executive Martina Edwin Company Secretary Trelford A E Douglas Finance Director Roy Hugh Sales & Marketing Director Phil Collins Procurement Director Ashley James Operations Director Errol Reid Technical Director Eardley Barrett Caribbean Business Development Director

LOCAL ROOTS, GLOBAL REACH

4 4

CORPORATE PROFILE (cont’d)

REGISTERED ADDRESSES Winfresh Limited Reg. No. 47 of 1994 99ChausseeRoad•Castries•SaintLuciaWI Winfresh (UK) Limited Reg. No: 2929097 3rdFloor•24OldBondStreet•London•W1S4AP•UnitedKingdom BUSINESS ADDRESSES Winfresh 1stFloor•M&CBuilding•BridgeStreet•POBox115•Castries •SaintLuciaWI Telephone +1 758 457-8600 Fax +1 758 453-1638 Winfresh UK 3700Parkway•Whiteley•Fareham•P0157A•UnitedKingdom Telephone +44 (0) 1489 587 570 Fax +44 (0) 1489 587 588 E-Mail [email protected] Web www.winfresh.net

AUDITORS PriceWaterhouseCoopers PointeSeraphine•POBox195•Castries•SaintLuciaWI

J M Shah & Company 3rdFloor•24OldBondStreet•London•W1S4AP•UnitedKingdom

BANKERS Bank of St Lucia BridgeStreet•POBox1031•Castries•SaintLuciaWI

Allied Irish Bank (AIB) 12OldJewry•London•EC2R8DP•UnitedKingdom

Barclays Bank Plc 50PallMall•London•SW1Y5AX•UnitedKingdom

Crown Agents Bank St.NicholasHouse•Sutton•Surrey•SM11EL•UnitedKingdom SOLICITORS Caribbean Law offices 99ChausseeRoad•POBox835•Castries•SaintLuciaWI

Bond Pearce LLP OceanaHouse•39-49CommercialRoad•Southampton•SO151GA •UnitedKingdom


5

CHAIRMAN’S STATEMENT

5

The last three years have been difficult for the Winfresh Group for a number of reasons and the period under review was no different. Indeed,

the banana business, which remains as the Group’s core business, is becoming increasingly challenging. However, notwithstanding the relentless difficulties, the Group’s result for the period has shown a significant improvement over that of the previous period. While it is by no means an unqualified success in absolute terms, judging from where the Group had come in the previous year, we are pleased with the turnaround.

The earnings of the Group remain exposed to the risks associated with the movements in the GBP-USD exchange rate, in fuel costs and the high cost and unreliability of supplies from the Windward Islands. However, the Group will do everything necessary and possible to limit the exposure and mitigate the impact of those risks.

The performance of the Group will continue to fluctuate from one period to the next and the period immediately ahead is already proving difficult for certain key members of the Group and to a less extent for the Group’s core banana business. However, we are undaunted by these swings in fortunes and the Group will forge ahead with its business development and diversification plans. Indeed, the long term objective of the Group is to smooth these fluctuations by spreading the risks across a wider range of business activities and products.

The continuing decline of banana production in the Windward Islands is a matter of serious concern to the Winfresh Group because the Windwards product remains a significant part of the Group’s banana offer. However, we recognise that the Windwards banana industry needs an urgent makeover if the decline is to be halted and the industry itself were to survive the challenging years ahead. Winfresh is ready to play its part in that overhaul provided that the changes are driven by the commercial realities of the market. The reduction in the EU import tariff on Dollar banana is undoubtedly damaging for the banana industry of the Windward Islands. Notwithstanding that, Winfresh is confident that a streamlined banana industry, along the lines it has proposed to the stakeholders, can survive and will continue to have a place in the market.

We are particularly disappointed that while banana production in the Windward Islands has been declining, there has been no significant increase in the production of other crops, despite very clear signals from Winfresh of its interest in a range of non-banana crops. While the Winfresh Group will not limit its sources of supplies to the Windward Islands, the Group will continue to provide support and give priority to supplies from the Windward Islands based on commercial realism. The Group has made and continues to make some strategic investments in food processing in the Windward Islands not only to assist in the diversification of the agricultural sector but also to bring home the commercial realities of agricultural production.

We will not look backwards except to avoid the mistakes of the past. Instead, we will continually look forward, anticipating the difficulties ahead and planning decidedly for a successful future for the Winfresh Group, its shareholders and other stakeholders. We are confident that the Group is on a path to sustainable growth and we hope that all will join Winfresh on its journey and share in the benefits of its success.

Montgomery DanielCHAIRMAN


6

BOARD OF DIRECTORS

66

MONTGOMERy DANIELChairman

St Vincent & The Grenadines

PETER JOSIEDirectorSaint Lucia

CECIL RyANDirector

St Vincent & The Grenadines

FERRON LOWE DirectorGrenada

GEMMA BAIN-THOMASDirectorGrenada

DELES WARRINGTON DirectorDominica

ELIAS AMORSINGH DirectorSaint Lucia

VANOULST JNO CHARLESDirectorDominica


7

The Directors present their report and consolidated financial statements, in Eastern Caribbean Dollars (XCD), for theWinfresh Group for the period ended 2 January 2010. The Eastern Caribbean Dollar is fixed to the US Dollar (USD) at therateofUSD1=XCD2.70.

DIRECTORS WHO SERVED DURING THE yEAR

Montgomery Daniel - ChairmanCecil Ryan Vanoulst Jno CharlesDeles WarringtonPeter JosieGregory Avril Ferron LoweGemma Bain-ThomasBernard Cornibert—Winfresh UK onlyMartina Edwin—Winfresh UK onlyResignationsduringtheYearGregory Avril —December 2009

PRINCIPAL ACTIVITIES

The principal activities of the Winfresh Group for the period under review were the importation, marketing and distribution of bananas and fresh produce.

RESULTS AND DIVIDENDS

The Group’s results for the period are set out in the Income Statement. The result after taxation was a profit of $11.2 million, compared to a loss of $19.0 million in the previous year. The factors that contributed to the $30.0 million turnaround were: (a) slightly better results from banana trading ($2.4 million), (b) gains in foreign exchange ($20.3 million) and (c) dividend and other income ($12.0 million). However, the overall improvement of $34.7 million in those areas was moderated by the drop in the Group’s share of profit in joint ventures.

The movement in the results again demonstrates the different and fluctuating circumstances facing the companies within the Group, particularly their exposure to fluctuations in the Sterling/Dollar exchange rate.

The Directors do not recommend payment of a dividend for the period.

REVIEW OF BUSINESS

During the period under review, the Group was faced with most of the same challenges of the immediate past periods; erratic movement in supplies, continuing cost inflation and instability in the value of the Pound Sterling and deflationary market prices. Above all, the global economic slowdown engendered by the banking crisis undermined consumer confidence. This had a negative impact on the market which saw consumers trading down and purchasing low quality “value” products at discounted prices.

However, notwithstanding the predictable difficulties of the first half of the trading calendar, the Group recovered to a relatively comfortable position by the end of the year. This was due largely to the improvement in the Sterling/Dollar exchange, which resulted in some recovery in the cost of sales as well as recovery of some of the 2008 foreign exchange losses on the value of the Company’s investments.

The total volume of bananas purchased by the Group was marginally (3.5%) higher in the period under review compared to the previous period. However, average product cost in Pound Sterling was 20% higher compared to the previous period, the result of the fall in the Sterling/Dollar for the period as a whole. Sales revenue increased by 7.0% compared to the previous period, but this was more or less offset by the 6.9 % increase in the goods cost of sales. The increases in to total and average sales revenue were the result of changes in product mix rather than any significant upward movement in market prices, which still lagged behind the increase in the Sterling product costs.

In the period under review, the volume of bananas imported from the Windward Islands accounted for 54% of the Group’s total purchase, compared to 60% in the previous period. Overall, the Windwards volume fell by 8% and there was a significant shift to the Dominican Republic and other sources.

DIRECTORS’ REPORT


88

The volume of imports from non-Caribbean ACP sources fell in the period under review to 4% from 6% in the previous period. The reduction in imports by the Group from non-ACP sources also resulted in a reduction in the total value of import duty paid by the Group. Banana imports from the ACP countries enjoy unlimited duty-free entry into the EU market.

The Group remained one of the largest suppliers of Fairtrade bananas in the UK market. The volume and value of Fairtrade sales grew by 4.0% and 23.8 % respectively and accounted for 89.5% of total sales in the period under review (84.7% in the previous period). The amount paid by the Group in Fairtrade licence and Social premium increased by 20.8%.

The Group continued with its programmes aimed at costs control and improving operational efficiency. While success has been achieved in some areas, others have proved more difficult, particularly those that involve high fuel energy usage. For example average distribution (transportation) cost increased by 31% in the period under review compared to the previous period.

Once again, the performance of the Group in the period under review demonstrated the risk to the business of the heavy reliance on supplies from the Caribbean sources and in particularly the Windward Islands, and the exposure to fluctuations in the Sterling/Dollar exchange rate and fuel prices.

During the period under review, the Group registered and successfully launched its new brand. The new Winfresh brand was intended to launch the Group into a new era of product development and diversification. However, there was the undeniable realism that this was not going to happen overnight and that it would take time before any new product wwas rolled out. Therefore, notwithstanding the re-branding and the promotion of the Group as a multi-product distributor, bananas still accounted for virtually 100% of the Group’s total turnover in the period under review.

The Group acquired a fruit processing plant in La Sagesse, Grenada. The plant has the capacity to pulp a variety of tropical fruits and to process them into premium juices and jams.

REVIEW OF FUTURE DEVELOPMENTS

The issue of the tariff on banana imports into the EU from the Most Favoured Nations (MFN) suppliers has now been resolved but the solution is a matter of concern to the Directors. The initial reduction from the €176 to €148 per tonne took effect from 15 December 2009 but has not been implemented. The directors remain deeply concerned about the likely negative impact of the initial cut on the competitiveness of supplies from the Group’s principal Caribbean sources.

The EU Commission has proposed an adjustment package of €190 million to assist the ACP suppliers in adopting measures to improve their competitiveness and adapt to the changing market conditions. However, the Directors are concerned that the timing of the delivery of this assistance may not permit the necessary adjustments to be made in the banana industry in the Windward Islands to mitigate the impact of the initial tariff cut.

More worryingly, the tariff reduction is taking place against the backdrop of a widening of the gap between the cost price of the Windward Islands product and those of the other supplying countries that are currently subjected to the import tariff.

Following a comprehensive price review in 2009, the Fairtrade labelling Organisation (FLO) announced across-the-board increases in the minimum prices to be paid for Fairtrade bananas. The new prices, which came into effect in January 2010, were intended to cover increases in the cost of production. However, the increase in the Windward Islands price was the largest, thereby widening the price gap between the Windwards product and those of their competitor suppliers.

Given that the market does not discriminate with respect to the price of Fairtrade bananas, the Directors are particularly concerned that the new prices will place the Windwards product and the Group at a cost disadvantage in the market. The Group will seek to address this concern with all involved, including the customers and Windwards suppliers, but also FLO which is embarking on another review in 2010.

The Group will continue to develop and expand its production facility at Stansted. This will include the extension of the

DIRECTORS’ REPORT


9

DIRECTORS’ REPORT

floor space to allow the Group to install new banana ripening chambers, if necessary but also to add new food processing and manufacturing units. The extension will also provide for more office space to allow the Group to consolidate its general administration and operations on a single site, at Stansted, early in 2011. It will enable the Group to achieve some efficiency savings in administration and overheads.

The Group, through Winfresh UK, will increase its shareholding in Winfruit Limited, (formerly Hummingbird International Limited) from 50% to 75%. Winfruit will be manufacturing a fruit based alternative to premium ice cream.

While product development by Winfruit is ongoing, some products are market ready and will be rolled out in 2010 from batch production. Full large scale production is expected to commence at a purpose built production facility at Stansted once the expansion development is completed there.

The Group is advanced negotiations National Properties Limited, the Joint Venture partner in Lauders Agro-processors Inc. to acquire more shares in the company. The plan is for the Group to hold at least 60% of the shares in the company and to integrate the management of the company within that of the Winfresh Group. A decision has already been taken to rename the company Vincyfresh Limited and to market all its products under the Winfresh brand.

The Group has also acquired a 65% stake in a St Lucia based water and beverage production company, Sunfresh Limited. The other 35% of the shares is held by Sunsmart Beverages Inc. As with the Vincyfresh products, the Sunfresh products will be marketed with Winfresh as the primary brand.

Sunfresh, Winfruit and the Group’s La Sagesse fruit processing plant will complement each other both in product development and production and sourcing of raw materials for finished products. The Group will exploit all areas of synergy and rationalization that can be realized within the Group to maximize cost savings and efficiency. While Vincyfresh will produce a range of products, initially, in the long term it will concentrate on the processing of root crops and vegetables.

The Group will start launching those products in 2010-2011, as production come on stream.

DIRECTORS AND THEIR INTERESTS

None of the Directors who served during the period had any beneficial interests in shares in the company.

EMPLOYEES

The Winfresh Group operates a policy of non-discrimination and equal opportunity for all of its employees. The Group is committed to ensuring that all matters of significant interest to the employees are communicated to them through regular management meetings and briefings at departmental levels, where they are consulted.

AUDIT INFORMATION

The Directors have taken all steps they ought to have taken, as directors, in order to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of such information.

So far as they are aware, there is no relevant audit information of which the Group’s auditors are unaware

By the Order of the Board

MARTINA EDWINCOMPANy SECRETARyApproved by the Directors on 16 September 2010


10

MANAGEMENT TEAM

01

05

02

06

03

07

04

08

01 02 03 04

05 06 07 08

BERNARD CORNIBERT Group Chief Executive

MARTINA EDWINGroup Secretary & Personnel Director

TRELFORD A E DOUGLA

Group Finance DirectorROy HUGH Sales & Marketing Director

ASHLEy JAMESOperations Director (UK)

PHILIP COLLINSProcurement & UK Business Development Director

EARDLEy BARRETTCaribbean Business Development Director

DR ERROL REIDTechnical Director & Officer in Charge (WI)


11

FINANCIAL HIGHLIGHTS

200.0

150.0

100.0

50.0

0.0

200.0

150.0

100.0

50.0

0.0

Financial Highlights

Year-on-year increase: $23.287 (15.8%)

Year-on-year increase: $11.218 (7.6%)

Changes in Shareholders’ Equity

$ M

illio

ns$

Mill

ions

Changes in Retained Earnings

00 01 02 03 04 05 06 07 08 09

00 01 02 03 04 05 06 07 08 09


12


12

60.0

40.0

20.0

0.0

(20.0)

(40.0)

30.0

25.0

20.0

15.0

10.0

5.0

0.0

Year-on-year increase:$0.00 (0.0%)

Year-on-year increase: $2.885 (-6.9%)

Changes In Long Term Debt

Changes In Working Capital

00 01 02 03 04 05 06 07 08 09

00 01 02 03 04 05 06 07 08 09

$Mill

ion

$Mill

ion

60.0

40.0

20.0

0.0

(20.0)

(40.0)

30.0

25.0

20.0

15.0

10.0

5.0

0.0



Changes In Long Term Debt

Changes In Working Capital

00 01 02 03 04 05 06 07 08 09

00 01 02 03 04 05 06 07 08 09

$Mill

ion

$Mill

ion


13


40.0

30.0

20.0

10.0

0.0

(10.0)



Changes in Year-end Cash Balance

$ M

illio

n$

Mill

ion

00 01 02 03 04 05 06 07 08 09

00 01 02 03 04 05 06 07 08 09

Profit & Loss

80.0

60.0

40.0

20.0

0.0

(20.0)

(40.0)


14

THE WINFRESH FAMILy


simply fruit in every scoop

15

A St Vincent based member of the Winfresh family, Vincyfresh, aims to be a premier food processing company specialising in Caribbean root crops and vegetables. Vincyfresh will be rolling out its products, which will include a number of convenient (frozen) food packs but, in particular, it is developing a range crisps (chips) such as the Caribbean consumer has never experienced before.

These crisps will be produced home-style from well-known Caribbean root crops and vegetables with all natural ingredients delivered in a variety of mouth-watering flavours.

Vincyfresh understands that time is precious but being time-poor need not determine what one eats or affect the quality of the food one eats. That is why Vincyfresh has developed its

range of wholesome convenience food packs comprising crops grown under the Caribbean sunlight and specially packaged to lock in their natural goodness, allowing anyone to save on preparation time without compromising on the goodness of the food.

Vincyfresh sources and processes the best fresh produce through its network of producers. These are prepared and packaged - while still fresh - in innovative ways so that preparation of healthful, nutritious and delicious meals can be as fast as a call for delivery or a trip to the nearest fast food restaurant.

Fresh, natural and easy! That’s the Winfresh Family way.


16

Sunfresh, formerly Sunsmart Beverages is now part of Winfresh. It will maintain the family tradition of delivery natural freshness to the consumer through a variety of fruit juices and drinks using only natural ingredients.

The aim of Sunfresh is to source all of its supplies locally, through the Winfresh family network of producers. At Sunfresh we believe that what local is more that what we grew up on and learnt to enjoy but local also mean fresh and nutritious . That is why Sunfresh

will deliver the juices and drinks from the fruits that you know well and love so much.

Natural and fresh—that’s Sunfresh! Another proud member of the Winfresh family

Naturally Fresh


17

Another member of the Winfresh family, Winfruit, has developed an innovative and unique food product which we name, “fruitful”.

Fruitful is a dairy-free, low fat frozen dessert produced from careful blending of fruit. It offers a healthy alternative to frozen desserts for a variety of health conditions and life-style choices and it is delicious.

As a “guilt-free” alternative to ice cream for the health conscious, fruitful has the following attributes:

• Minimumof75%fruitcontent;• Nodairyorlactose;

• No gluten, soya, rice, oats or anygrain products;

• Lessthan1%fatcontent;• No added fat, colouring, or

sodium;• Lowincholesterol;• All ingredients are naturally

sourced;

Fruitful has the texture and appearance of ice cream but is suitable for:

• Theweightconscious;• GlutenandLactoseintolerances;• Vegans and Vegetarians ... And

everyone who enjoys a fresh fruit taste.

Fruitful is now manufactured in the United Kingdom but, eventually, the

aim of Winfruit is to manufacture the product as close as possible to the fruit source. This will be both cost-effective and create opportunities and jobs for farmers and others in the farming communities where the fruits are produced. This will not only ensure freshness, it will save farmers money through reduction in the high level of wastage that is often associated with the cosmetic quality requirements of exporting fresh produce.

Another great natural and healthful product from the Winfresh Family!

simply fruit in every scoop


18

Winfresh will soon be rolling out its brand of snack foods, including cassava products. The Winfresh family is investing in technology and processes to create wholesome and tasteful snacks from fresh Caribbean produce.

At Winfresh, we believe that snack foods can be healthy and so it is our aim to deliver healthful snacks utilising local suppliers of the kind of foods you trust and love.

If it’s fresh, all natural and tasty, then it must be from the Winfresh family!

Look out for the Winfresh label - the symbol of wholesome quality.

WINFRESH SNACKS


FINANCIALS

19

LOCAL ROOTS, GLOBAL REACH20

PriceWaterhouseCoopersPointe Seraphine

P.O.Box 195Castries

St. Lucia, West IndiesTelephone (758) 456-2600

Facsimile (758) 452-1061

September 16, 2010

Independent Auditor’s Report

To the Shareholders ofWinfresh Limited

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Winfresh Limited (the Company) and its subsidiary (together, the Group), which comprise the consolidated balance sheet as of January 2, 2010 and the consolidated statements of income, consolidated changes equity and consolidated cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of January 2, 2010 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Chartered Accountants

21

January 22010

$

December 272008

$

Assets

Current assetsCash and cash equivalents (Note 5) 19,805,777 21,064,684Held-to-maturity financial assets (Note 6) 1,184,919 1,147,023Trade and other receivables (Note 7) 29,988,247 23,525,702Inventories 12,936,103 14,087,022Due from related parties (Note 9) 5,790,183 6,660,603Deferred tax asset (Note 13) 256,179 116,034

69,961,408 66,601,068Due from related parties (Note 9) 890,307 1,082,557Loan to related party (Note 9) – 10,620,524Property, plant and equipment (Note 10) 29,774,475 4,656,461Investments in joint ventures and associate (Note 11) 100,994,537 89,127,690

Total assets 201,620,727 172,088,300

Liabilities

Current liabilitiesBank overdraft (Note 5) 1,636,338 1,378,218Income tax payable 213,938 248,144Trade and other payables (Note 12) 29,116,484 21,095,371Dividend payable – 2,000,000

Total liabilities 30,966,760 24,721,733

Equity

Share capital (Note 14) 20,000,000 20,000,000Contributed capital and reserves 336,908 363,486Currency translation reserve (8,107,077) (20,202,543)Retained earnings 158,424,136 147,205,624

Total equity 170,653,967 147,366,567

Total liabilities and equity 201,620,727 172,088,300

Consolidated Balance Sheetas of January 2, 2010(expressed in Eastern Caribbean dollars)

Director Director

Approved by the Board of Directors on September 16, 2010


Consolidated Statement of IncomeFor the year ended January 2, 2010

(expressed in Eastern Caribbean dollars)

January 22010

$

December 272008

$

Banana tradingSales 270,508,073 252,775,404Cost of goods sold (252,436,494) (236,071,680)

Profit from banana trading 18,071,579 16,703,724

Distribution and selling (11,848,298) (13,907,088)Administrative and establishment (14,381,888) (13,215,420)

(8,158,607) (10,418,784)

Other gains/(losses), net (Note 15) 4,432,857 (15,870,118)

Other income (Note 16) 13,075,516 1,132,691

Profit/(loss) before share of profit in joint ventures associates and income tax 9,349,766 (25,156,211)

Share of profit in joint ventures and associate (Note 11) 1,930,486 6,344,284

Profit/(loss) before income tax 11,280,252 (18,811,927)

Income tax expense (Note 19) (82,718) (226,978)

Profit/(loss) for the year 11,197,534 (19,038,905)

23

Consolidated Statement of Comprehensive IncomeFor the year ended January 2, 2010(expressed in Eastern Caribbean dollars)

January 22010

$

December 272008

$

Profit/(loss) for the year 11,197,534 (19,038,905)

Other comprehensive incomeCurrency movement for the year 12,095,466 (20,644,815)

Total comprehensive income 23,293,000 (39,683,720)


Consolidated Statement of Changes in EquityFor the year ended January 2, 2010


Sharecapital

(Note 14)$

Contributedcapital and

reserves$

Currencytranslation

reserve$

Retainedearnings

$Total

$

At December 29, 2007 20,000,000 395,888 442,272 168,212,127 189,050,287

Total comprehensive income:Profit for the year – – – (19,038,905) (19,038,905)

Other comprehensive income:Currency translation movement – – (20,644,815) – (20,644,815)

Total comprehensive income – – (20,644,815) (19,038,905) (39,683,720)

Transactions with ownerDividends – – – (2,000,000) (2,000,000)Transfer to reserves – 32,402 – (32,402) –

At December 27, 2008 20,000,000 363,486 (20,202,543) 147,205,624 147,366,567

At December 27, 2008 20,000,000 363,486 (20,202,543) 147,205,624 147,366,567

Total comprehensive income:Profit for the year – – – 11,191,934 11,191,934

Other comprehensive income:Currency translation movement – – 12,095,466 – 12,095,466

Total comprehensive income – – 12,095,466 11,191,934 23,287,400

Dividends – – – (2,000,000) (2,000,000)Transfer to reserves – 26,578 – (26,578) –

At January 2, 2010 20,000,000 336,908 (8,107,077) 158,424,136 170,653,967

25

Consolidated Statement of Cash FlowsFor the year ended January 2, 2010(expressed in Eastern Caribbean dollars)

January 22010

$

December 272008

$

Cash flows from operating activitiesProfit /(loss) before income tax 11,280,252 (18,811,927)Adjustments for:

Depreciation (Note 10) 2,484,388 1,953,099Unrealised exchange (gains)/losses (1,878,616) 12,939,007Gain on disposal of property, plant and equipment (46,711) (5,826)Interest income (75,237) (591,325)Share of profit in joint ventures and associate (Note 11) (1,930,485) (6,344,284)Dividend Income (10,896,025) –Finance costs 17,407 2,721

Operating profit/(loss) before working capital changes 1,045,027 (10,858,535)

Increase in trade and other receivables (4,505,814) (2,912,760)Decrease/(increase) in inventories 2,188,939 (6,263,225)Increase in trade and other payables 10,168,512 630,345Decrease in balance with related parties, net 1,062,670 5,622,449

Cash generated from/(used in) operating activities 7,869,280 (13,781,726)Income tax paid (272,452) (735,705)Interest paid (17,407) (2,721)

Net cash generated from/(used in) operating activities 7,579,421 (14,520,152)

Cash flows from investing activitiesPurchase of property, plant and equipment (Note 10) (27,356,459) (1,084,936)Investment in joint venture (1,079,630) –Interest received 37,341 555,418Dividend received 10,896,025Proceeds from disposal of property, plant and equipment 91,166 28,282

Net cash used in investing activities (17,411,557) (501,236)

Cash used in financing activitiesDividends paid (2,000,000) –Loan for related party 10,315,109 –

Net cash generated from financing activities 8,315,109 –

Net decrease in cash and cash equivalents (1,517,027) (15,021,388)Cash and cash equivalents, beginning of year 19,686,466 34,707,854

Cash and cash equivalents, end of year (Note 5) 18,169,439 19,686,466

26

Notes to Consolidated Financial StatementsJanuary 2, 2010



1 General information

IncorporationThese consolidated financial statements include the financial statements of Winfresh Limited (formerly Windward Islands Banana Development and Exporting Company Limited), (the Company) and its wholly-owned subsidiary, Winfresh UK Limited (formerly Windward Islands Banana Development & Exporting Company (UK) Limited).

Both companies are private companies incorporated in 1994. WIBDECO was incorporated under the laws of Saint Lucia and continued under the Company’s Act, 1996. The Company commenced trading effective January 1, 1995 with the takeover of the operations formerly undertaken by Windward Islands Banana Growers’ Association (“WINBAN”). On July 16, 2009 the registered name of the Company was changed to Winfresh Limited.

WIBDECO (UK) was incorporated under the Companies Act, 1985 of the United Kingdom. The Company commenced trading in May 1994. On May 22, 2009 the registered name of the subsidiary company was changed to Winfresh (UK) Limited

The Company’s registered office is located at 99 Chaussee Road, Castries, Saint Lucia.

Principal activityThe principal activity of the Group is the importation, marketing and distribution of bananas and fresh produce.

ShareholdingsThe shareholders of the Company are the Governments of the four Windward Islands, Saint Lucia, Dominica, Saint Vincent and the Grenadines and Grenada and the banana grower associations (“BGAs”) of the four Windward Islands, St. Lucia Banana Growers’ Association (“SLBGA”), Dominica Banana Marketing Corporation (“DBMC”), St. Vincent Banana Growers’ Association (“SVBGA”) and Grenada Banana Co-operative Society (“GBCS”). The SLBGA was dissolved on October 1, 1998 and its operations taken over by the St. Lucia Banana Corporation (“SLBC”).

The Company’s financial year represents a 52 week period ending January 2, 2010 (2008 – December 28, 2008).

27

Notes to Consolidated Financial StatementsJanuary 2, 2010(expressed in Eastern Caribbean dollars)

27

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparationWinfresh Limited’s (formerly Windward Islands Banana Development and Exporting Company Limited) financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements have been prepared under the historical cost convention except for the revaluation of certain property, plant and equipment.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

(a) Standard, amendment and interpretations effective and relevant to the GroupThe following standards, amendments to existing standards are mandatory for accounting periods beginning on or after January 1, 2009 and are relevant to the Group’s operations:

• IAS1(Revised), ‘Presentation of financial statements’, The revised standard prohibits the presentation of items of income and expenses (that is, ‘non-owner changes in equity’) in the statement of changes in equity, requiring ‘non-owner changes in equity’ are to be presented separately from owner changes in equity. All non-owner changes in equity is required to be shown in a performance statement, but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they are required to present a restated balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the end of the current period and comparative period. The company has selected the option to present two statements (the statement of income and statement of comprehensive income).

• IAS36 (Amendment), ‘Impairment of assets’ (effective from January 1, 2009). Where fair value less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value-in-use calculation should be made. The Group will apply the IAS 28 (Amendment) and provide the required disclosure where applicable for impairment tests from January 1, 2009.

• IAS37, ‘Provisions, contingent liabilities and contingent assets’, requires contingent liabilities to be disclosed, not recognised. IAS 19 has been amended to be consistent. The Group will apply the IAS 19 (Amendment) from January 1, 2009.

• IFRS3 (Revised), ‘Business combinations’ (effective from July 1, 2009). The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair vale or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. The Group will apply IFRS 3 (Revised) prospectively to all business combinations from January 1, 2010.

28




2 Summary of significant accounting policies…continued

Consolidation

(a) SubsidiariesSubsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the consolidated statement of income. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries are consistent with the policies adopted by the Group.

(b) AssociatesAssociates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investment in associate is accounted for by the equity method of accounting and initially recognised at cost.

The Group’s share of its associate’s post-acquisition profits or losses is recognised in the consolidated statement of income, and its share of post-acquisition movements in reserves recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

(c) Joint venturesA joint venture exists where the Group has a contractual arrangement with one or more parties to undertake activities typically, however not necessarily, through entities that are subject to joint control. The Group recognises interests in a jointly controlled entity using the equity method. The Group’s share of the results of joint ventures is based on financial statements made up to a date not earlier than three months before the date of the balance sheet. Intragroup gains on transactions are eliminated to the extent of the Group’s interest in the investee. Intragroup losses are also eliminated unless the transaction provides evidence of impairment in the asset transferred.

29



Cash and cash equivalentsCash and cash equivalents include cash in hand, deposits held with banks and bank overdrafts. Bank overdrafts are in current liabilities on the consolidated balance sheet.

InvestmentsThe Group classifies its investments as loans and receivables. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of loans and receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to their original terms.

Regular way purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus, in the case of all financial assets not carried at fair value through profit and loss, transaction costs that are directly attributable to their acquisition. Investments are derecognised when the rights to receive cash flows from the investment have expired or where they have been transferred and the Group has also transferred substantially all risks and rewards of ownership.

Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at fair value less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the consolidated statement of income.

InventoriesInventories, which are comprised of shipments of bananas in transit, bananas held in storage in ripening centres and packaging materials, are stated at the lower of cost and net realisable value. Cost for bananas is determined by reference to the invoiced price together with the delivery costs incurred in shipping the bananas to the United Kingdom and ripening centres. Cost for packaging materials is determined using the weighted average basis. Net realisable value for bananas represents the estimated sale proceeds net of any additional marketing and distribution costs in the United Kingdom.

30





Property, plant and equipmentLand and building comprise mainly warehouses and offices. All assets are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of income during the financial period in which they are incurred. Increases in the carrying amount arising on revaluation of land and buildings are credited to other reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against other reserves directly in equity; all other decreases are charged to the consolidated statement of income. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to the consolidated statement of income and depreciation based on the asset’s original cost is transferred from ‘other reserves’ to ‘retained earnings’.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line and reducing balance methods to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the consolidated statement of income.

Impairment of non-financial assetsAssets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

Buildings - (straight-line) 2%Plant and machinery - (straight-line) 15% - 20%Office furniture and equipment - (straight line and reducing balance) 25% - 33%Computer equipment - (straight-line) 25% - 33%Motor vehicles - (straight-line) 25%

31



BorrowingsBorrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of income over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Deferred income taxDeferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Share capitalOrdinary shares are classified as equity. Preference shares which have discretionary dividend obligations and are not redeemable at a specific date or at the option of the shareholders, are also classified as equity.

Dividend distributionDividend distribution to the Company’s shareholders is recognised as a liability in the Company’s consolidated financial statements in the period in which the dividends are approved by the Company’s shareholders.

Contributed capitalProperty, plant and equipment transferred and donated to the Group is included in property, plant and equipment at cost or valuation, and the corresponding credit is recorded in contributed capital. This contributed capital is amortised to retained earnings on a straight line basis using the same rates used to provide depreciation on the applicable assets.

LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating leases. Payments made under operating leases, net of any incentives received from the lessor, are charged to the consolidated statement of income on a straight-line basis over the period of the lease.

32





Employee benefits

Pension obligation The subsidiary company, Winfresh (UK) Limited (formerly Windward Island Banana Development and Exporting Company Limited (UK)) is party to a multi-employer defined benefit pension scheme. The actuaries of the scheme confirmed to the directors that the company is unable to identify its share of the underlying assets and liabilities of the scheme on a reasonably consistent basis. Accordingly, there is insufficient information to use defined benefit accounting. In accordance with IAS 19 revised, the scheme is accounted for as if it were a defined contribution pension scheme.

A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

The assets of the scheme are held in a separate independently administered fund. The subsidiary’s contributions are charged to the statement of income in the year to which they relate.

Revenue recognitionRevenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown, net of discounts. Revenue is recognised as follows:

(a) Banana tradingBanana trading income (including fees, recoveries, sales and commissions) are recognised upon delivery of products and customer acceptance.

(b) Interest incomeInterest income is recognised on a time-proportion basis using the effective interest method.

(c) Other incomeOther income is recognised on an accrual basis.

Foreign currency translation

(a) Functional and presentation currencyItems included in the consolidated financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Group’s functional currencies include Eastern Caribbean dollars and the UK pound. The consolidated financial statements are presented in Eastern Caribbean dollars, which is the Group’s presentation currency.

(b) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities

33



Foreign currency translation …continued

(c) Group companiesThe results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii) income and expenses for each statement of income are translated at the average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction

dates, in which case income and expenses are translated at the dates of the transactions); and

(iii) all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings, are taken to shareholders’ equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the consolidated statement of income as part of the gain or loss on sale.

ComparativesExcept when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with comparative information.

3 Financial risk management

Financial risk factorsThe Group’s activities expose it to a variety of financial risk: market risk (including currency risk and fair value risk), credit risk, liquidity risk and cash flow interest rate risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize the potential adverse effects on the Group’s financial performance.

Risk managementThe Directors are charged with the overall responsibility of establishing and monitoring the company’s risk management policies and processes. The group’s overall risk management policies and processes focuses on identifying, analysing and monitoring the risks such as foreign exchange risk, interest rate risk and credit risk that are faced by the Group. All treasury transactions are reported to and approved by the Directors.

34




3 Financial risk management…continued

(a) Market risk

(i) Foreign exchange riskThe Group trades internationally and is exposed to foreign exchange rate risk from various currency exposures, primarily with respect to the US dollar and Sterling/UK pound. The exchange rate of the Eastern Caribbean dollar (EC$) to the United States dollar (US$) has been formally pegged at EC$2.70 = US$1.00 since July 1976.

Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

The group purchases its bananas and fresh produce in foreign currency and forward currency contracts are used for the purchases. All costs denominated in foreign currency are settled using the spot rate. There were no outstanding forward currency contracts at the balance sheet dates.

The following table summarises the Group’s exposure to foreign currency exchange rate risk at January 2 2010.

At January 2, 2010 if the ECD had weakened/strengthened against the STG /UK pound by 10% with other variables held constant, post tax profit for the year would have been $2,558,907(December 27, 2008 - $3,776,764) higher/lower, mainly as a result of foreign exchange gains/losses on translation of STG/UK pound denominated bank balances, trade receivables, and trade payables.

(ii) Cash flow and fair value interest rate riskThe Group has interest bearing assets at fixed interest rates which expose the group to fair value interest rate risk. The group has determined that the fair value interest rate risk was not significant at the balance sheet date.

EC$

US$

STG$

EURO$

Total$

At January 2, 2010

Financial assetsCash and cash equivalents 255,583 4,303,984 15,187,395 58,815 19,805,777Investments: Loans and receivables 1,184,919 – – – 1,184,919Trade and other receivables 2,757,154 1,565,281 25,665,812 – 29,988,247Due from related parties 5,790,183 – – – 5,790,183

Total financial assets 9,987,839 5,869,265 40,853,207 58,815 56,769,126Financial liabilitiesBank overdraft 1,636,338 – – – 1,636,338Trade and other payables 1,990,935 11,861,413 15,264,136 55,645 29,172,129

Total financial liabilities 3,627,273 11,861,413 15,264,136 55,645 30,808,467

Net balance sheet financial position 6,360,566 (5,992,148) 25,589,071 3,170 25,960,659

At December 28, 2008Financial assets 13,058,418 4,896,763 45,812,875 333,037 64,101,093Financial liabilities 5,736,625 8,691,734 8,045,230 – 22,473,589

Net balance sheet financial position 7,321,793 (3,794,971) 37,767,645 333,037 41,627,504

35



(b) Credit riskThe Group manages its exposure to this risk by applying contractual terms that have been approved by the directors to the amount of credit exposure to any one counterparty. It also employs strict minimum credit worthiness criteria as to the choice of counterparty, thereby ensuring that there is no significant concentration of credit risk.

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, investments classified as loans and receivables, as well as credit exposure to customers, including trade receivables, due from related parties and committed transactions.

The Group assesses the credit quality of customers on a case by case basis taking into account their financial position, past experience and other factors. Management does not set individual credit limits. If customers are independently rated, these ratings are used. If there is no dependent rating, management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

The amount of the Group’s maximum exposure to credit risk is indicated by the carrying amount of its financial assets at the balance sheet date. Management does not expect any losses from non-performance by these counterparties as at January 2, 2010 and December 27, 2008.

The credit quality of the financial assets that are neither past due nor impaired (fully performing) can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. The independent ratings are based on publicly available ratings supplied by Standard & Poor, CRIF Decision Solutions Limited and Fitch Ratings Limited.

Cash and Cash equivalents:

The rest of the balance sheet item cash and cash equivalent is cash on hand.

Banks Ratings:

January 2

2010

$ Ratings:

December 27

2008

$

Bank 1 A- to A-2 1,718,276 A-1 8,248,344

Bank 2 AA- to A-1+ 8,060,741 A-1+ 3,298,926

Bank 3 A 8,625,221 A 9,301,760

Bank 4 A to A-1 1,096,664 – –

Unrated 301,787 Unrated 172,927

19,802,689 21,021,957

36





(b) Credit risk…continued

Trade receivables - neither past due nor impaired

Counterparties without external credit ratings:

(c) Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and the ability of funding through an adequate amount of committed credit facilities.

Bank overdrafts and trade and other payables are due within 12 months based on the remaining period at the balance sheet date to the contractual maturity date.

The contractual undiscounted cash flows of bank overdrafts and trade payables approximate the carrying amounts at the balance sheet date as the impact of discounting is not significant.

(d) Capital risk managementThe Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders.

Customers RatingsJanuary 2

2010$

RatingsDecember 27

2008$

1 A-3 11,061,906 A-3 7,542,4372 B 2,731,596 83 2,079,9723 Unrated 2,644,448 90 966,793

16,437,950 10,589,202

Unrated 4,588,561 Unrated 5,509,470

21,026,511 16,098,672

January 22010

$

December 272008

$

New customers less than 6 months 266,400 –Existing customers more than 6 months no defaults in the past 6,966,609 5,347,958Existing customers more than 6 months with defaults in the past – 161,512

7,233,009 5,509,470

37


4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Management does not consider that there are estimates and assumptions that will have a significant risk, causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

5 Cash and cash equivalents

Loans and receivables comprise of term deposits with banks. These term deposits mature within one year and bear interest at rates between 3% and 3.25% (December 27, 2008 - 3% and 3.25%) per annum.

January 2

2010

$

December 27

2008

$

Cash at bank and in hand 19,805,777 21,064,684

For the purposes of the cash flow statement, cash and cash equivalents comprise the following:

6 Investments: Loans and receivables

January 2

2010

$

December 27

2008

$

Debt securities at amortised cost 1,184,919 1,147,023

January 2

2010

$

December 27

2008

$

Cash at bank and in hand 19,805,777 21,064,684

Bank overdraft (1,636,338) (1,378,218)

18,169,439 19,686,466

38




7 Trade and other receivablesJanuary 2

2010

$

December 27

2008

$

Trade receivables 27,715,269 20,898,394Less: provision for impairment of trade receivables (854,543) (668,083)

Trade receivables - net 26,860,726 20,230,311

Other receivables 3,033,298 3,211,862

Prepayments 94,223 83,529

29,988,247 23,525,702

Included in trade and other receivables are amounts totalling of $1,072,042 (2008 - $346,305) due from related parties. No impairment has been recognised in respect of these balances.

The credit quality of trade receivables is summarised as follows:

January 2

2010

$

December 27

2008

$

Neither past due nor impaired 21,026,511 16,098,672Past due but not impaired 5,834,215 4,131,639Impaired 854,543 668,083

Gross 27,715,269 20,898,394

Trade receivables that are less than three months past due are not considered impaired. These relate to a number of independent customers for whom there is no recent history of default.

The aging of trade receivables that are past due and not impaired is as follows:

January 2

2010

$

December 27

2008

$

Up to 1 month 5,186,764 1,195,9801 to 2 months 168,402 460,733Over 2 months 479,049 2,474,926

5,834,215 4,131,639

39


7 Trade and other receivables…continued

The individually impaired receivables mainly relate to customers, which are in unexpectedly difficult economic situa-tions. It was assessed that a portion of the receivables is expected to be recovered.

The aging of trade receivables that are impaired is as follows:

January 2

2010

$

December 27

2008

$

Over 2 months 854,543 668,083

Other receivables and prepayments do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables mentioned above. The Group does not hold any collateral as security.

Provision for impairment of trade receivables8

The movement in the provision for impairment of receivables is as follows:January 2

2010

$

December 27

2008

$

At beginning of year 668,083 509,142Provision made during the year 186,460 158,941

At end of year 854,543 668,083

The creation and release of provision for impaired receivables have been included in general and administrative ex-penses in the statement of income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

9 Related party transactions and balancesThe Group is related to the four banana grower associations (BGAs) and the Governments of the Windward Islands (Note 1) which together own 100% of the Company’s shares. The Group owns 50% of Windward Isles Banana Company (U.K.) Limited and Windward Isles Banana Company Holdings (Jersey) Limited and 40% of Lauders Agro Processors Limited.

The following transactions were carried out with related parties:

January 2

2010

$

December 27

2008

$

Purchases of bananas from the BGAs 88,070,546 84,195,308Purchase of fresh produce 517,549 329,756

40




9 Related party transactions and balances…continued

Purchases from related parties were carried out on commercial terms and conditions and at market prices.

January 22010

$

December 272008

$Key management compensation:Salaries and other short-term benefits 2,744,626 2,823,355

Year-endbalancesarisingfromsales/purchasesofgoods/services:

January 22010

$

December 272008

$Due from related parties

CurrentSt. Vincent Banana Growers Association – 266,040St. Lucia Banana Corporation 1,357,638 1,620,063Government of Saint Lucia 4,232,545 4,774,500Lauders Agro Processors 200,000 –

5,790,183 6,660,603

Non-currentGrenada Banana Cooperative Society 768,834 796,084Dominica Banana Marketing Company 121,473 286,473

890,307 1,082,557

Balances with related parties are unsecured, non-interest bearing and have no fixed terms of repayment.

The balance due from the Government of Saint Lucia represents Management’s best estimate of the consideration due for the compulsory acquisition of land and buildings of the Company situated at Roseau. The Company is currently in negotiations with the Government of Saint Lucia on the form of consideration.

Loan to joint venture

Windward Isles Banana Company Holdings (Jersey) Limited.

January 22010

$

December 272008

$

Beginning of year 10,620,524 14,390,340Loan repayments received (10,315,109) –Foreign exchange loss (305,415) (3,769,816)

At end of year – 10,620,524

Loans due from the joint venture are interest free, unsecured and have no specific repayment terms.

10 P

roperty, plant and equipment

LeaseholdIm

provements$

Land &B

uildings$

Plant &

Machinery$

Office

Furniture &E

quipment$

Com

puterE

quipment$

Motor

Vehicle$

Total$

At D

ecember 29, 2007

Cost or valuation

147,186905,427

6,100,2314,587,251

2,210,5101,179,155

15,129,760A

ccumulated depreciation

–(88,041)

(3,104,390)(2,978,088)

(1,460,257)(714,252)

(8,345,028)

Net book am

ount147,186

817,3862,995,841

1,609,163750,253

464,9036,784,732

year ended Decem

ber 27, 2008

Opening net book am

ount147,186

817,3862,995,841

1,609,163750,253

464,9036,784,732

Currency translation adjustm

ent–

(214,049)(568,829)

(317,193)(42,526)

(95,055)(1,237,652)

Additions

99,47312,581

166,404119,949

686,529–

1,084,936D

isposals–

–(4,211)

(2,602)(15,643)

–(22,456)

Depreciation charge

(2,944)(34,041)

(804,364)(420,662)

(516,874)(174,214)

(1,953,099)

Closing net book am

ount243,715

581,8771,784,841

988,655861,739

195,6344,656,461

At D

ecember 27, 2008

Cost or valuation

246,659680,815

5,037,9073,727,125

2,613,636964,414

13,270,556A


(2,944)(98,938)

(3,253,066)(2,738,470)

(1,751,897)(768,780)

(8,614,095)

Net book am

ount243,715

581,8771,784,841

988,655861,739

195,6344,656,461

41


10 P

roperty, plant and equipment

LeaseholdIm

provements$

Land &B

uildings$

Plant &

Machinery$

Office

Furniture &E

quipment$

Com

puterE

quipment$

Motor

Vehicle$

Total$

At D

ecember 29, 2007

Cost or valuation

147,186905,427

6,100,2314,587,251

2,210,5101,179,155

15,129,760A


–(88,041)

(3,104,390)(2,978,088)

(1,460,257)(714,252)

(8,345,028)

Net book am

ount147,186

817,3862,995,841

1,609,163750,253

464,9036,784,732

year ended Decem

ber 27, 2008

Opening net book am

ount147,186

817,3862,995,841

1,609,163750,253

464,9036,784,732


ent–

(214,049)(568,829)

(317,193)(42,526)

(95,055)(1,237,652)

Additions

99,47312,581

166,404119,949

686,529–

1,084,936D

isposals–

–(4,211)

(2,602)(15,643)

–(22,456)

Depreciation charge

(2,944)(34,041)

(804,364)(420,662)

(516,874)(174,214)

(1,953,099)

Closing net book am

ount243,715

581,8771,784,841

988,655861,739

195,6344,656,461

At D

ecember 27, 2008

Cost or valuation

246,659680,815

5,037,9073,727,125

2,613,636964,414

13,270,556A


(2,944)(98,938)

(3,253,066)(2,738,470)

(1,751,897)(768,780)

(8,614,095)

Net book am

ount243,715

581,8771,784,841

988,655861,739

195,6344,656,461

42




10 P

roperty, plant and equipment…

continued

LeaseholdIm

provements$

Land &B

uildings$

Plant &

Machinery$

Office

Furniture &E

quipment$

Com

puterE

quipment$

Motor

Vehicles$

Total$

At D

ecember 27, 2008

Cost or valuation

246,659680,815

5,037,9073,727,125

2,613,636964,414

13,270,556A


(2,944)(98,938)

(3,253,066) (2,738,470)

(1,751,897)(768,780)

(8,614,095)

Net book am

ount243,715

581,8771,784,841

988,655861,739

195,6344,656,461

year ended January 2, 2010

Opening net book am

ount243,715

581,8771,784,841

988,655861,739

195,6344,656,461


ent–

56,996111,350

64,59845,986

11,470290,400

Additions

–24,162,092

1,068,404965,437

674,928485,596

27,356,457D

isposals–

–(1)

–(2,358)

(42,096)(44,455)

Depreciation charge

(4,933)(268,920)

(900,700)(617,694)

(497,052)(195,089)

(2,484,388)

Closing net book am

ount238,782

24,532,0452,063,894

1,400,9961,083,243

455,51529,774,475

At January 2, 2010

Cost or valuation

246,65924,909,595

6,422,2204,970,716

3,307,7661,144,901

41,001,857A


(7,877)(377,550)

(4,358,326)(3,569,720)

(2,224,523)(689,386)

(11,227,382)

Net book am

ount238,782

24,532,0452,063,894

1,400,9961,083,243

455,51529,774,475

43


11. Investments in joint ventures and associate

January 2

2010

$

December 27

2008

$

At beginning of year 89,127,690 112,783,006Additions during the year 1,075,270 –Share in profit net, 1,930,485 6,344,284Dividends (10,896,205) –Currency translation adjustment 19,757,297 (29,999,600)

At end of year 100,994,537 89,127,690

The Group’s share of the results of its joint ventures and its share of assets and liabilities are as follows:

Assets

$

Liabilities

$

Revenues

$

2010Windward Isles Banana Company Holdings (Jersey) Limited 36,850,230 36,174,399 201,177Windward Isles Banana Company (UK) Limited. 106,761,677 33,660744 105,075,675Lauders Agro Processors Inc 1,619,719 316,717 324,432

2008Windward Isles Banana Company Holdings (Jersey) Limited 90,894,811 43,740,782 6,936,846Windward Isles Banana Company (UK) Limited 102,319,954 62,476,904 101,109,148Lauders Agro Processors Inc. 888,493 23,909 201,587

Windward Isles Banana Company (UK) Limited (“WIBUK”) and Windward Isles Banana Company Holdings (Jersey) Limited (“WIBHJ”) are incorporated in the United Kingdom and Jersey, respectively, on a 50% joint-venture basis with Fyffes for the acquisition of the banana operating division of the Geest Group of Companies.

Lauders Agro Processors Inc (LAP) is incorporated in St. Vincent and the Grenadines, on a 40% joint venture basis with National Properties Limited (NPL) of St. Vincent. Its principal activity is the processing and exporting of fresh produce.

Associate

During the year a group entity Winfresh UK Limited purchased 1000 B ordinary shares being a holding of 33.3% in Winfruit Limited. The company is incorporated in England and Wales. The principal activity of the company is that of research and development into the production, marketing and distribution of dairy free freezer fruit desert.

The group’s share of the results of its associates and its share of assets and liabilities are as follows:

Assets

$

Liabilities

$

Revenues

$

Winfruit Limited 43,833 407,788 32

44




12 Trade and other payablesJanuary 2

2010

$

December 27

2008

$

Trade payables 18,858,287 15,745,670Other payables 10,136,084 2,300,573Accrued expenses 122,113 3,049,128

29,116,484 21,095,371

Included in trade and other payables are balances due to related parties of $9,601,866 (December 27, 2008- $5,081,841).

13 Deferred income tax asset

Deferred income taxes are calculated in full on temporary differences under the liability method using a principal tax rate of 28% (December 27, 2008 - 28%). The movement on the deferred tax (asset) account is as follows:

January 2

2010

$

December 27

2008

$

At beginning of year (116,034) (82,181)Statement of income charge (Note 19) (125,086) (65,206)Exchange differences (15,059) 31,353

At end of year (256,179) (116,034)

Deferred taxes arose from decelerated capital allowances.

45


14 Share capitalJanuary 2

2010

$

December 27

2008

$Authorised:

Unlimited ordinary sharesUnlimited non-cumulative preference shares

Subscribed:500 ordinary shares 5,000,000 5,000,0001,500 5% non-cumulative preference shares 15,000,000 15,000,000

20,000,000 20,000,00015 Other losses, net

January 2

2010

$

December 27

2008

$

Foreign exchange (losses)/gains Unrealised gain/( losses) on translation of balances 1,878,616 (12,939,007) Realised losses on transactions 2,507,530 (2,936,937)Gain on disposal of property, plant and equipment 46,711 5,826

4,432,857 (15,870,118)16 Other income

January 2

2010

$

December 27

2008

$

Dividend income 10,896,025 –Interest income 74,625 591,325Agency fees and commissions 50,456 47,340Other 2,054,410 494,026

13,075,516 1,132,691

46




17 Expenses by nature

January 2

2010

$

December 27

2008

$

Direct costs 254,526,236 238,034,447Employee benefit expenses (Note 18) 11,938,401 13,656,497Depreciation (Note10) 2,484,388 1,953,099Equipment Repairs and maintenance 1,840,947 2,139,909Bad debt expense 723,069 158,941Legal and professional fees 1,082,334 817,195Director Allowances 1,320,376 967,852Travel and subsistence 923,076 1,275,828Utilities 833,705 948,658Rent 595,388 643,039Other expenses 304,685 532,023Communication 438,555 124,319Subsistence 252,008 215,682Printing, postage and office supplies 233,943 262,514Security expenses 226,851 225,613Insurance 223,518 271,982Telephone & Fax 216,924 260,986Advertising and promotions 81,456 253,486Audit fees 291,760 303,800Bank charges 78,563 53,586Vehicle expenses 30,516 42,992Subscriptions and donations 19,981 51,740Total cost of goods sold, administrative and general expenses 278,666,680 263,194,188

18 Employee benefit expense

January 2

2010

$

December 27

2008

$

Salaries and wages 10,346,290 12,127,282Other staff costs 836,193 651,134Social security costs 755,918 878,081

11,938,401 13,656,497

47


19 Income tax expenseJanuary 2

2010

$

December 27

2008

$

Current tax 207,804 292,184Deferred tax charge (Note 13) (125,086) (65,206)

Current tax charge 82,718 226,978

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the applicable standard rate as follows:

January 2

2010

$

December 27

2008

$

Profit before tax 11,246,016 (18,811,927)

Tax calculated at standard rate of 30% 3,373,805 (5,643,578)Tax effect of consolidation adjustments (2,677,743) (1,920,257)Exempt profit (570,962) 7,790,313Expenses not deductible for tax purposes 9,882 23,417Deferred tax not recognised (13,340) 15,987Other tax adjustments (40,282) (38,904)

Tax charge 81,360 226,978

20 Pension costs

The subsidiary company Winfresh (UK) Limited (formerly Windward Island Banana Development and Exporting Company Limited (UK)) is party to a multi-employer defined benefit pension scheme. Their actuaries have confirmed to the directors that the company is unable to identify its share of the underlying assets and liabilities of the scheme on a reasonably consistent basis. Consequently, the scheme has been accounted for as if it were a defined contribution pension scheme.

The constitution of the scheme required that a triennial valuation is performed by independent actuaries and the last triennial valuation was carried out at December 31, 2009.However as at the date of approval of these financial state-ments the triennial valuation had not been completed. This was due to ongoing discussions between the scheme’s trustees and the company’s directors in relation to the valuation and manner in which future contributions to the scheme will be made. The previous triennial valuation at December 30, 2006 revealed a deficit of £4,638,000 in the scheme which represented a funding level of less that 90% as required by the minimum funding requirement rules.

With effect from April 2008 all of the participating employers in the scheme have agreed to a revised schedule of contributions and annual payments, which is designed to restore the minimum funding requirement position of the scheme to an acceptable level.

The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge to the statement of income for the year with respect to the defined contribution scheme amounted to £90,658 (December 27, 2008 - £86,190). Included in accrued liabilities is an amount of £9,343 (December 27, 2008 – £9,455) relating to pension contributions payable.

48




21 Commitments

The group leases various land and buildings and equipment under non-cancellable operating lease agreements. The leases have varying terms and renewal rights.

The future aggregate minimum lease payments under non -cancellable operating leases are as follows:

January 2

2010

$

December 27

2008

$

Within one year 210,371 174,030Between two and five years 396,181 9,034

606,552 183,064

22 Guarantees

The subsidiary company has provided a payment guarantee to HM Revenue and Customs. At the balance sheet date the maximum amount payable under this guarantee totalled £250,000 (December 27, 2008 – £ 250,000)

23 Contingent liabilities

The Group is contingently liable in respect of disputed liabilities that may be due under the banana contract sales agreements with the banana companies. These amounts are currently being negotiated, the full amount of the liability if any cannot be determined at the balance sheet date. Any settlements arising from these disputed liabilities are expected to be accounted for as a charge against income in the period in which the settlement occurs.

annual report 2009

1st Floor, M&C Building,Bridge Street,P.O. Box 115,

Castries,Saint Lucia W.I.

Telephone: + 1 758 457 8600Fax: + 1 758 453 1638

LOCAL ROOTS,GLOBAL REACH

annual report 2009

Documents

winfresh group

shareholders of winfresh

winfresh uk limited

dominica banana

manufacturer of food

windward islands

local roots

traditional banana base