Highland Fresh Mussels Ltd (HFM) - Financial Statement for the ...

THE HIGHLAND COUNCIL
PLANNING, ENVIRONMENT AND DEVELOPMENT COMMITTEE
16TH JANUARY 2013
Agenda
Item
Report No
16
PED
13/13
HIGHLAND FRESH MUSSELS LTD (HFM Ltd)
FINANCIAL STATEMENTS FOR THE PERIOD 1 ST APRIL 2010 – 30 TH SEPTEMBER
2011 AND PROGRESS REPORT
Report by Director of Planning & Development
SUMMARY
This report contains Financial statements for the period 1 st April 2010 to 30 th September
2011 for Highland Fresh Mussels Ltd. The report also provides a brief update of recent
activity within the fishery and confirms that a further report will make recommendations for
the future of the fishery operations. The report recommends that Committee:
note the contents of the report, and;
accept the Financial Statements for the period 1 st April 2010 to 30 th September
2011for Highland Fresh Mussels Ltd on behalf of the Highland Council.
1 Introduction
1.1 The Highland Council’s mussel fishery management company Highland Fresh
Mussels Ltd (HFM Ltd) began trading during Financial Year 1998/99. Attached, as
Appendix 1, is the “Financial Statements for the period 1 st April 2010 to 30 th
September 2011”.
2 Report of Directors and Financial Statements (1 st April 2010 – 30 th September
2011)
2.1 Committee will wish to note from Appendix 1:
During the period 1 st April 2010 to 30 th September 2011, 211.45 tonnes of
mussels were harvested, generating sales receipts of £63,435. Cost of
sales amounted to £60,200.
Taking into account the cost of sales, administrative expenses (including
payments to the Common Good), the transfer of assets to the Highland
Council and Corporation Tax credits, a loss for the financial period of
£234,366 was reported.
During the period HFM Ltd paid £6,169 to Tain Common Good Fund. This
payment was made under the terms of the lease with the Highland Council,
via which the Company exercised mussel fishing rights held by the Council.

3 Returns to the Common Good of Tain
3.1 A primary objective of HFM Ltd was to maximise returns to Tain Common Good
fund while retaining sufficient funds to support its annual activities. However as a
result of the economic downturn, declining demand and falling profitability,
Highland Council agreed to wind up Highland Fresh Mussels Ltd and to once
again run the operation internally. The Council agreed to the wind up of HFM Ltd
on 8 th September 2011, the Company ceased trading on 30 th September 2011 and
the Highland Council took over the operation with effect from 1 st October 2011.
3.2
3.3
During the life of Highland Fresh Mussels Ltd the company made a significant
contribution to the Tain Common Good fund. At the close of the financial period to
30 th September 2011 the Company had contributed £718,928.25 to the fund to the
benefit of many local projects.
At the wind up of the Company, assets transferred to the Tain Common Good
account included:
Fishing vessel (MFV Gizzen Briggs) – value £230,000
Scottish fishing licence – value £20,000
Cash balances - £9,141.71
Stock of mussel bags – value £1,750.00
4 Mussel fishery progress since 1 st October 2011
4.1
4.2
Since taking over the fishing operation on 1 st October 2011, market conditions
have remained very difficult. At the time of writing only 63.52 tonnes of mussels
have been sold and demand remains very low in the face of strong competition. A
further blow to the operation has been the 12 week closure of the fishery (May –
August) as a result of algal toxin levels within mussel stocks. The future of the
operation is now called into question.
Following discussion with Ward 8 Members a paper to the Highland Council will
make recommendations for the future of the fishery.
5 Fit with The Programme for the Highland Council
5.1 The operation and management of the Tain mussel fishery links directly to the
Programme commitments designed to empower communities.
6 Fit wit the Single Outcome Agreement
6.1 The operation and management of the Tain mussel fishery assist the Council
delivery local outcomes for communities in Highland.
7 Equalities implications
7.1 There are no equalities implications arising from this paper.
8 Legal implications
8.1 There are no additional legal implications arising from this paper. Via the Local
Government (Scotland) Act 1973 the Highland Council remains trustee of the Tain

Common Good fund, with responsibility for the assets held by the fund.
9 Climate change implications
9.1 There are no climate change implications arising from this paper.
10 Resource implications
10.1 There are no additional resource implications arising from this report. The financial
sustainability of the fishing operation will be considered prior to recommending
future options for the consideration of the Council.
RECOMMENDATION
That Committee:
note the contents of the report, and;
accept the Financial Statements for the period 1 st April 2010 to 30 th
September 2011 for Highland Fresh Mussels Ltd on behalf of the Highland
Council.
Signature:
Designation: Director of Planning and Development
Date: 17th December 2012
Author: George Hamilton (Ext: 2568)
Ref:
GH
Background Papers
1. HFMLtd Progress reports to Ross and Cromarty Area Committee since establishing
the Company
2. Offer of lease of Tain Mussel Fishings to Highland Fresh Mussels Ltd – Highland
Council, October 2001.
3. Highland Fresh Mussels Limited – Financial Statements for the period 1 st April 2010
to 30 th September 2011