Company registration number 03066352 (England and Wales)
GRAINCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
GRAINCO LIMITED
COMPANY INFORMATION
Directors
S G Gillie
G Bright
S Y Duck
P A Jackson
E Rust
C Birnie
J Hutcheson
C M Scholey
R Davison
Secretary
S Y Duck
Company number
03066352
Registered office
Tyne Dock
South Shields
Tyne & Wear
NE34 9PL
Auditor
Greaves West & Ayre
17 Walkergate
Berwick-upon-Tweed
Northumberland
TD15 1DJ
GRAINCO LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 8
Directors' responsibilities statement
9
Independent auditor's report
10 - 13
Profit and loss account
14
Statement of comprehensive income
15
Balance sheet
16
Statement of changes in equity
17
Statement of cash flows
18
Notes to the financial statements
19 - 39
GRAINCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The directors present the strategic report for the year ended 30 June 2023.

Principal Activities

The Company continues to be primarily engaged in seed production, drying, storing, logistics and trading of UK grain and remains the largest farmer owned business in the North of England and Scotland.

 

The 2022/​2023 grain marketing year continued to be challenging and volatile as a result of the impact of the Ukraine position and global supply chain uncertainty. Grain prices on the London futures market traded within a £118 range.

 

Grainco’s robust balance sheet and large banking facilities allowed Grainco to continue to trade in its normal manner. All segments of Grainco’s diverse operations enjoyed plentiful demand which all aided in delivering a record profit.

 

Combined with Grainco’s excellent financial performance it also provided excellent returns within its pool marketing facility delivering final pool prices well in excess of the farmer’s expectations.

 

The company owns and operates a large scale pelleting plant, primarily producing agri pellets for the energy sector. Trialling continues on new products to enable the company to expand its product range into the future.

 

The company continues to expand its logistical services in England and Scotland, handling imported products on behalf of a growing number of clients.

 

The company’s customer relationships remain robust due to our excellent service levels and logistical capabilities backed by our strong Balance Sheet.

 

The company continues to explore new business ventures which would add value to its farmer clients and benefit the entire food chain and energy sector. In line with this, the company has committed to a significant photovoltaic installation in order to reduce its energy price risk and reduce its carbon footprint.

 

 

GRAINCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Principal risks and uncertainties

The Company is exposed to many operational and commercial risks. It is the responsibility of the Company's directors to assess these risks and ensure appropriate controls are in place to mitigate their effect. The directors consider that the principal risks and mitigating controls are as follows:

 

 

Directors appointed to the Finance & Risk Committee: Steve Gillie (Chair), Peter Jackson, Bob Davison, Susan Duck (Finance Officer), Gary Bright (Managing Director) and Gareth Baird.

GRAINCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
Principal risks and uncertainties continued

The directors regularly review and agree its policies for managing financial risk. The policies are implemented by the Company's financial controller. The Company's significant financial risks and relevant policies, which have not changed throughout the year, are as follows:

 

 

Key performance indicators

The directors consider that the most relevant KPl’s are as follows:

 

 

 

 

 

GRAINCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -
Statement by the directors in performance of their statutory duties under s172(1) of the Companies Act 2006

The board of directors of Grainco Limited consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 30 June 2023. In particular, by reference to the approval of our business plan and regular board meeting discussions which guide the future of the Company.

Our discussions and plans aim to secure the success of the Company in the long term for the benefit of stakeholders, employees and customers.

 

To achieve this, we have built a board with a great deal of industry experience to allow them to assess the risks facing the Company.

 

We aim to continue to secure the best deals available for farmers in the North of England and Scotland by utilising the Company's strategic assets, marketing skills and other protection against risks outwith their control.

 

Our employees are also essential to the delivery of the board's plans. We continue to seek experienced staff who can fulfil the required roles, and also aim to provide secure employment and provide fair pay, benefits and working conditions. For many of our staff health and safety poses a particular risk due to the inherent dangers of the sites and a great deal of time, thought and finance is provided to ensure that all necessary PPE and training is provided to allow employees to work safely. The Company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Company. This is achieved through informal meetings, newsletters and annual performance reviews.

 

The Company gives full and fair consideration to applications for employment from disabled persons where the candidate’s particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion.

 

Where existing employees become disabled, it is the Company’s policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.

 

As the board of directors, our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating with the highest standards of business conduct and good governance. This contributes to the delivery of our plans for the Company's future. The intention is to continue to grow the Company's reputation and ensure that the actions of management and employees reflect the board's responsible behaviour.

 

In turn, this allows stakeholders to also benefit from the Company's success.

 

By order of the board

S Y Duck
Secretary
2 October 2023
GRAINCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 5 -

The directors present their annual report and financial statements for the year ended 30 June 2023.

Principal activities

The Company is a general trading company whose principal activity continued to be that of the trading and marketing of grain. The Company is registered in England under the company number 03066352.

Results and dividends

The results for the year are set out on page 14.

 

Ordinary interim dividends were paid of £500,000 (2022: £500,000).

The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

S G Gillie
G Baird
(Resigned 30 September 2022)
G Bright
S Y Duck
P A Jackson
E Rust
C Birnie
J Hutcheson
C M Scholey
R Davison
Business relationships

The directors are aware of the need to consider fostering the Company’s business relationships with suppliers, customers and others. The directors aim to maintain good relationships with both customers, suppliers and employees to ensure the smooth running of the business and the efficient and effective execution of the board's plans for the business.

Auditor

The auditors, Greaves West and Ayre, will be proposed for reappointment in accordance with Section 485 of the Companies Act 2006.

Energy and carbon report

As the Company has consumed more than 40,000 kWh of energy in this reporting period, it does not qualify as a low energy user and is required to report on its emissions, energy consumption and energy efficiency activities.

 

Under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon) Regulations 2018, the company is mandated to disclose its UK energy use and associated greenhouse gas (GHG) emissions. As a minimum, it is required to report the GHG emissions from fuel combustion, purchased energy and transport vehicles. Additionally, the use of an intensity ratio and an outline of implemented efficiency measures are required under the Streamlined Energy and Carbon Reporting (SECR) regulations.

To ensure a high level of transparency is achieved, robust and recognised reporting methods are implemented. The reporting methodology involves usage of the 2023 DEFRA (Department for Environment, Food and Rural Affairs) emissions factors to calculate and assess our UK operational emissions.

GRAINCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 6 -

The SECR reporting period covers GrainCo Limited’s UK operations from the 1st July 2022 to the 30th June 2023 and our calculations are for the following scopes:

 

Calculation methodology

GrainCo Limited’s emissions have been assessed by sustainability consultancy McGrady Clarke, in accordance with the ‘GHG Protocol Corporate Accounting and Reporting Standard’ and in line with Defra’s ‘Environmental reporting guidelines: including Streamlined Energy and Carbon Reporting Requirements’. The DEFRA 2023 emissions conversion factors were used to quantify the emissions associated with GrainCo Limited’s UK operations for the specified reporting period.

Organisational Boundary

We have used the operational control approach. This SECR includes all emissions under Grainco Limited, and includes emissions from Meldon Village Storage and Drying Limited.

GRAINCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 7 -

Energy efficiency measures

There were no notable energy efficiency measures implemented during the reporting period.

 

GRAINCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
Statement of disclosure to auditor

So far as the directors are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.

Strategic Report

Information on risks and uncertainties is not shown in the Directors' Report as it is included in the Strategic Report under s414C(11) of the Act. For details of the fair review of the business, principal risks and uncertainties facing the company as well as trading performance and future developments, please see the Strategic Report on page 1.

By order of the board
S Y Duck
Secretary
2 October 2023
GRAINCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.

GRAINCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GRAINCO LIMITED
- 10 -
Opinion

We have audited the financial statements of Grainco Limited (the 'company') for the year ended 30 June 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, 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.

Conclusions relating to going concern

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.

 

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 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.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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.

 

In connection with our audit of the financial statements, 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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

GRAINCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GRAINCO LIMITED
- 11 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 the directors 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 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 the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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 (UK) 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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:

GRAINCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GRAINCO LIMITED
- 12 -
The extent to which the audit was considered capable of detecting irregularities, including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

To address the risk of fraud through management bias and override of controls, including any fraud associated with revenue recognition, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

The laws and regulations which are considered to be significant to the entity relate to health and safety. Discussions are held with management to determine whether any breaches have occurred as well as legal expenditure being scrutinised for any evidence on non-compliance.

GRAINCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GRAINCO LIMITED
- 13 -

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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.

Craig Little CA
Senior Statutory Auditor
For and on behalf of Greaves West & Ayre
2 October 2023
Chartered Accountants
Statutory Auditor
17 Walkergate
Berwick-upon-Tweed
Northumberland
TD15 1DJ
GRAINCO LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2023
- 14 -
2023
2022
Notes
£
£
Turnover
3
257,984,695
214,252,848
Cost of sales
(246,788,216)
(203,509,576)
Gross profit
11,196,479
10,743,272
Administrative expenses
(7,215,179)
(7,373,885)
Operating profit
4
3,981,300
3,369,387
Interest receivable and similar income
7
500,000
-
Interest payable and similar expenses
8
(1,137,058)
(460,702)
Other gains and losses
9
1,982,389
2,697,514
Profit before taxation
5,326,631
5,606,199
Tax on profit
10
(1,280,625)
(1,081,536)
Profit for the financial year
4,046,006
4,524,663

The profit and loss account has been prepared on the basis that all operations are continuing operations.

GRAINCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 15 -
2023
2022
£
£
Profit for the year
4,046,006
4,524,663
Other comprehensive income
-
-
Total comprehensive income for the year
4,046,006
4,524,663
GRAINCO LIMITED
BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 16 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
5,417,320
6,533,360
Investment properties
14
779,970
779,970
Investments
15
362,594
362,594
6,559,884
7,675,924
Current assets
Stocks
18
20,567,444
19,862,285
Debtors
19
49,299,528
43,540,121
Cash at bank and in hand
2,882,507
2,491,361
72,749,479
65,893,767
Creditors: amounts falling due within one year
20
(50,675,509)
(48,468,586)
Net current assets
22,073,970
17,425,181
Total assets less current liabilities
28,633,854
25,101,105
Provisions for liabilities
Deferred tax liability
22
28,666
-
0
(28,666)
-
Deferred grants
23
(423,807)
(465,730)
Net assets
28,181,381
24,635,375
Capital and reserves
Called up share capital
25
500,000
500,000
Profit and loss reserves
27,681,381
24,135,375
Total equity
28,181,381
24,635,375
The financial statements were approved by the board of directors and authorised for issue on 2 October 2023 and are signed on its behalf by:
S G Gillie
G Bright
Director
Director
Company Registration No. 03066352
GRAINCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2021
500,000
20,110,712
20,610,712
Year ended 30 June 2022:
Profit and total comprehensive income
-
4,524,663
4,524,663
Dividends
11
-
(500,000)
(500,000)
Balance at 30 June 2022
500,000
24,135,375
24,635,375
Year ended 30 June 2023:
Profit and total comprehensive income
-
4,046,006
4,046,006
Dividends
11
-
(500,000)
(500,000)
Balance at 30 June 2023
500,000
27,681,381
28,181,381
GRAINCO LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
32
8,606,450
(10,359,411)
Interest paid
(1,137,058)
(460,702)
Income taxes paid
(1,285,294)
(36,486)
Net cash inflow/(outflow) from operating activities
6,184,098
(10,856,599)
Investing activities
Purchase of tangible fixed assets
(380,554)
(498,483)
Proceeds from disposal of tangible fixed assets
380,650
140,969
Proceeds from disposal of investments
1,982,389
2,697,514
Dividends received
500,000
-
0
Net cash generated from investing activities
2,482,485
2,340,000
Financing activities
Repayment of bank loans
(62,500)
(150,000)
Repayment of derivatives
337,258
(1,941,762)
Dividends paid
(500,000)
(500,000)
Net cash used in financing activities
(225,242)
(2,591,762)
Net increase/(decrease) in cash and cash equivalents
8,441,341
(11,108,361)
Cash and cash equivalents at beginning of year
(24,808,834)
(13,700,473)
Cash and cash equivalents at end of year
(16,367,493)
(24,808,834)
Relating to:
Cash at bank and in hand
2,882,507
2,491,361
Bank overdrafts included in creditors payable within one year
(19,250,000)
(27,300,195)
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
1
Accounting policies
Company information

Grainco Limited is a private company limited by shares incorporated in England and Wales. The registered office is Tyne Dock, South Shields, Tyne & Wear, NE34 9PL.

1.1
Accounting convention

The financial statements are prepared on the going concern basis and in accordance with the Companies Act 2006 and FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”).

 

The principal accounting policies, which have been applied consistently throughout the financial year, are set out below.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 20 -

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life using the straight line method, as below.

Land and buildings leasehold
4 - 10% Straight Line
Plant and machinery
5 - 50% Straight Line
Fixtures, fittings & equipment
14 - 33% Straight Line
Computer equipment
14 - 33.33% Straight Line
Motor vehicles
14 - 50% Straight Line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 21 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.

 

The company has elected to use hedge accounting to account for stock.

 

As a result of the fact that stock is part of a wider hedge, the hedge adjustments are included through the financial instruments rather than as an adjustment to stock values.

 

Stock is accounted for at the lower of cost or net realisable value at each reporting date, as such there is no requirement to have a separate impairment review.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 22 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 23 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.13
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.14
Hedge accounting

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 24 -
1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.

1.18
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.19
Government grants

Government grants are recognised under the accrual method at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

 

Grant income currently recognised in the accounts relates to grants relating to capital expenditure. The amount of grant income recognised in the accounts is disclosed in note 4 to the accounts.

1.20
Foreign exchange

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

1.21

Consolidated accounts

The financial statements present information about the company as an individual undertaking and not about its group. The company has not prepared group accounts as it is exempt from the requirement to do so by section 400 of the Companies Act 2006 as it is a subsidiary undertaking of Tynegrain Limited, a company incorporated in England and Wales, and is included in the consolidated accounts of that company.

1.22

Profit Incentive Scheme

The company operates a profit incentive scheme which is open to all selected employees who accept written invitations to participate. The scheme is a four year incentive scheme and terminates on 30 June 2023. No bonus will be payable under the scheme unless pre-tax profits equal or exceed the target set.

 

Liabilities accruing through this scheme are estimated at fair value and recognised in the profit and loss account as salary costs.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 25 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Grain trading, storage and related activities
257,942,997
214,190,468
Grant income
41,698
62,380
257,984,695
214,252,848
2023
2022
£
£
Other significant revenue
Dividends received
500,000
-
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
249,492,353
206,785,950
Other European countries
8,492,342
7,466,898
257,984,695
214,252,848
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
41,923
62,380
Fees payable to the company's auditor for the audit of the company's financial statements
50,000
39,500
Depreciation of owned tangible fixed assets
1,039,043
1,501,241
Loss/(profit) on disposal of tangible fixed assets
76,899
(77,293)
Operating lease charges
60,900
34,200
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
4
Operating profit
(Continued)
- 26 -

Auditor's remuneration

Fees payable to the company's auditor for the audit of the company were £50,000. The auditor provided audit services for all associate companies of Grainco Limited. Fees payable in respect of these services amounted to £42,880.

 

During the year the auditor received £24,158 for the supply of IT services. The auditor also received £10,803 which related to recharged equipment and software subscription costs. Other assurance work was provided, for which the auditor received £11,290.

 

For the purposes of this note, associated companies means other members of the Tynegrain group and Tynegrain Agriculture Limited.

5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Directors
(including non executive directors)
9
10
Operational
45
50
Administration
5
5
59
65

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,566,272
3,380,070
Social security costs
344,425
312,558
Pension costs
318,570
278,027
4,229,267
3,970,655
6
Directors' remuneration
Restated
2023
2022
£
£
Remuneration for qualifying services
1,061,956
967,088
Amounts receivable under long term incentive schemes
444,015
448,094
Company pension contributions to defined contribution schemes
68,251
44,764
1,574,222
1,459,946

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
6
Directors' remuneration
(Continued)
- 27 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
533,382
420,415
Company pension contributions to defined contribution schemes
32,138
18,386

This figure represents amounts paid to the highest paid director during the year and does not include amounts accruing in relation to the company's long term incentive scheme. These additional amounts are calculated and paid on an agreed basis which relates to the value added to the group over the previous four year period and do not form part of the directors annual remuneration package.

 

Included in remuneration for qualifying services are directors' benefits receivable in respect of use of and fuel for vehicles and medical care.

 

No directors were paid any shares in respect of qualifying services under a long term incentive scheme.

7
Interest receivable and similar income
2023
2022
£
£
Income from fixed asset investments
Income from shares in group undertakings
500,000
-
0
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,137,058
460,702
9
Other gains and losses
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
1,982,389
2,697,514
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
759,183
1,285,295
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
10
Taxation
2023
2022
£
£
(Continued)
- 28 -
Deferred tax
Origination and reversal of timing differences
521,442
(203,759)
Total tax charge
1,280,625
1,081,536

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
5,326,631
5,606,199
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
1,331,658
1,065,178
Tax effect of expenses that are not deductible in determining taxable profit
1,201
1,525
Effect of change in corporation tax rate
(166,836)
-
0
Group relief
(11,917)
(3,717)
Dividend income
(125,000)
-
0
Capital allowances in excess (deficit) of depreciation
85,599
69,406
Settlement of provisions for previous years
(331,558)
152,903
Deferred tax relating to origination and reversal of timing differences
521,442
(203,759)
Capital loss
(23,964)
-
0
Taxation charge for the year
1,280,625
1,081,536
11
Dividends
2023
2022
£
£
Interim paid
500,000
500,000
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 29 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 July 2022 and 30 June 2023
100,000
Amortisation and impairment
At 1 July 2022 and 30 June 2023
100,000
Carrying amount
At 30 June 2023
-
0
At 30 June 2022
-
0
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 30 -
13
Tangible fixed assets
Land and buildings leasehold
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 July 2022
6,052,526
-
0
5,436,286
6,764
194,962
1,549,670
13,240,208
Additions
-
0
49,664
86,598
-
0
-
0
244,292
380,554
Disposals
(95,854)
-
0
(887,751)
-
0
-
0
(355,749)
(1,339,354)
At 30 June 2023
5,956,672
49,664
4,635,133
6,764
194,962
1,438,213
12,281,408
Depreciation and impairment
At 1 July 2022
1,783,142
-
0
3,609,536
6,764
180,594
1,126,814
6,706,850
Depreciation charged in the year
267,182
-
0
536,845
-
0
13,386
221,630
1,039,043
Eliminated in respect of disposals
(13,177)
-
0
(530,507)
-
0
-
0
(338,121)
(881,805)
At 30 June 2023
2,037,147
-
0
3,615,874
6,764
193,980
1,010,323
6,864,088
Carrying amount
At 30 June 2023
3,919,525
49,664
1,019,259
-
0
982
427,890
5,417,320
At 30 June 2022
4,269,385
-
0
1,826,747
-
0
14,371
422,857
6,533,360
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 31 -
14
Investment property
2023
£
Fair value
At 1 July 2022 and 30 June 2023
779,970

Investment property comprises the Piercebridge shop, quarry and houses. The fair value of the investment property is based on the directors' knowledge and understanding of the local market and comparable properties. The fair value is considered to be equal to the cost of purchasing the properties in 2017. The directors' consider the fair value to be reflective of the market value at the year end.

15
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
16
362,593
362,593
Unlisted investments
1
1
362,594
362,594

Market value for the investments is not readily ascertainable but it is the directors belief that the market value of the investments is not less than their carrying value in the accounts.

 

Grainco Scotland Limited was dormant throughout the year to 30 June 2023. For this reason the company has not consolidated its subsidiary on the basis that the results of consolidation would not present a materially different position. These accounts only present information about Grainco Limited itself.

Movements in fixed asset investments
Shares in group undertakings
Other investments other than loans
Total
£
£
£
Cost or valuation
At 1 July 2022 & 30 June 2023
362,593
1
362,594
Carrying amount
At 30 June 2023
362,593
1
362,594
At 30 June 2022
362,593
1
362,594
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 32 -
16
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered
Nature of
Class of
% Held
office key
business
shares held
Direct
Indirect
Grainco Scotland Limited
1
Dormant
Ordinary
100
-
Maritime Shipping and Logistics Ltd
1
Dormant
Ordinary
100
-
Forestco Limited
1
Forestry activities
Ordinary
100
-
Pelletco Limited
1
Biomass pellets
Ordinary
100
-
Registered Office address:
1
Tyne Dock, South Shields, Tyne & Wear, NE34 9PL
The aggregate capital and reserves and the results for the year of the subsidiaries noted above were as follows:
Name of undertaking
Profit/(Loss)
Capital and Reserves
£
£
Grainco Scotland Limited
-
90
Maritime Shipping and Logistics Ltd
-
1
Forestco Limited
(1,724)
7,208
Pelletco Limited
505,487
652,249

Maritime Shipping and Logistics Ltd's last year end before the parent company's year end was 31 August 2022. All other subsidiaries have coterminous year ends.

17
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
13,527,834
7,436,854
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
11,545,444
5,117,206
18
Stocks
2023
2022
£
£
Grain and oilseeds
20,567,444
19,862,285
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 33 -
19
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
26,867,640
22,972,537
Amounts owed by group undertakings
63,571
930,659
Derivative financial instruments
13,527,834
7,436,854
Other debtors
683,820
740,644
Prepayments and accrued income
8,156,663
10,966,650
49,299,528
43,047,344
Deferred tax asset (note 22)
-
161,219
49,299,528
43,208,563
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 22)
-
331,558
Total debtors
49,299,528
43,540,121
20
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
21
19,250,000
27,362,695
Trade creditors
14,023,278
10,647,864
Amounts due to group undertakings
91,439
96,277
Corporation tax
759,183
1,285,295
Other taxation and social security
78,338
74,757
Derivative financial instruments
11,545,444
5,117,206
Accruals and deferred income
4,927,827
3,884,492
50,675,509
48,468,586

The bank overdraft is secured by way of:-

 

- a first legal charge over the leasehold property know as Plot 9, Wilton International Site, Middlesbrough,

 

- a debenture including a fixed charge over all present freehold and leasehold property, a first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future, and a first floating charge over all assets and undertakings both present and future,

 

- a charge over contract monies dated 31 January 2014, and

 

- a fixed charge over book debts and other debts, goodwill, uncalled capital and intellectual property and a floating charge over all other assets.

 

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 34 -
21
Loans and overdrafts
2023
2022
£
£
Bank loans
-
0
62,500
Bank overdrafts
19,250,000
27,300,195
19,250,000
27,362,695
Payable within one year
19,250,000
27,362,695
22
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Other timing differences
28,666
-
-
492,777
2023
Movements in the year:
£
Asset at 1 July 2022
(492,777)
Charge to profit or loss
521,443
Liability at 30 June 2023
28,666

The deferred tax liability set out above is in relation to the timing of capital allowances. The effect is expected to reverse over the life of the assets.

 

Following the enactment of the Finance Act 2021 the deferred tax provision at the year end has been calculated using a rate of 25% (2022: 25%).

23
Government grants
2023
2022
£
£
Arising from government grants
423,807
465,730
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 35 -
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
318,570
278,027

The company contributes towards a number of defined contribution pension schemes on behalf of certain employees, including four directors. The assets of the scheme are held separately from those of the company in independently administered funds. There are no amounts due at the year end.

25
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
500,000
500,000
500,000
500,000

The shares carry full voting rights but no fixed entitlement to income.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 36 -
26
Related party transactions
Trading with shareholders
2023
2022
£
£
Purchases
Tynegrain Limited
2,486,481
1,792,876
Sales
Tynegrain Limited
832,213
732,704
The company also paid management fees in the sum of £350,000 (2022 £350,000) to Tynegrain Limited. These amounts are included in the above amounts on an invoice basis.
Trading with other related parties
2023
2022
£
£
Purchases
Tynegrain Agriculture Limited
-
-
Meldon Village Storage and Drying Limited
77,631
36,081
PelletCo Limited
21,038
19,524
Forestco Limited
-
-
98,669
55,605
Sales
Tynegrain Agriculture Limited
739,823
587,188
Meldon Village Storage and Drying Limited
222,457
113,569
PelletCo Limited
233,900
206,350
Forestco Limited
-
1,050
1,196,180
908,157
Meldon Village Storage and Drying Limited and Tynegrain Agriculture Limited are subject to common control with Tynegrain Limited. Amounts owed to and by shareholders and other related parties at 30 June 2023 were:
Amounts owed by shareholders and other related parties
2023
2022
£
£
Tynegrain Limited
1,489
-
Tynegrain Agriculture Limited
14,236
90,578
Meldon Village Storage and Drying Limited
-
752,927
PelletCo Limited
47,846
37,155
Forestco Limited
-
50,000
63,571
930,660
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
26
Related party transactions
(Continued)
- 37 -
Amounts owed to shareholders and related parties
2023
2022
£
£
Tynegrain Limited
90,629
96,187
Tynegrain Agriculture Limited
-
-
Grainco Scotland Limited
90
90
Meldon Village Storage and Drying Limited
-
-
Forestco Limited
-
-
PelletCo Limited
720
-
91,439
96,277
These amounts are unsecured, interest free and are expected to be paid and recovered in full.
27
Transactions with directors
2023
2022
£
£
Purchases
4,649,473
3,882,695
Included in trade creditors is £209,474 (2022 £248,521) which is owed by Grainco to the above related parties.
2023
2022
£
£
Sales
136,457
308,849
Included in trade debtors is £23,977 (2022 £201,748) which is amounts owing from the above related parties.
These figures represent amounts either with the individual or with businesses that they influence.
2023
2022
£
£
Pool advances
185,958
454,356
The pool advances have been made under the provisions of a pool marketing contract and are secured against grain held in store. At 30 June 2023 the balances of the pool advances due from directors was £Nil (2022 £Nil). The above balance represents the maximum balance advanced to directors or businesses connected to them, during the year. All transactions were in the normal course of business.
GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 38 -
28
Financial commitments, guarantees and contingent liabilities

In May 2007 the company entered into arrangements with The Rural Payments Agency in which the company provided a guarantee for the sum of £275,000.

 

The company has entered into a group security arrangement whereby the company provides a security for bank loans and overdrafts for other group members.

29
Operating lease commitments
Lessor

The operating leases represent leases of Piercebridge to third parties. The leases are negotiated over terms of 3 to 5 years, the leases for the Office, Quarry and Shop have 12 months break notice clauses, therefore, the amounts receivable have only been disclosed for the period of the break notice clauses.

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
79,618
72,380
30
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
1,064,504
980,452

No guarantees have been given by the company to the directors or received by the directors from the company.

31
Ultimate controlling party

Grainco Limited is controlled by Tynegrain Limited, which owns 100% of the company's share capital. Tynegrain Limited is incorporated in England under the Co-operative and Community Benefit Societies Act 2014. The company number is:

 

Tynegrain Limited            23873R

 

For the year to 30 June 2023 group accounts have been drawn up for the Tynegrain Limited group.

 

Copies of the audited accounts can be viewed on the FCA's website.

GRAINCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 39 -
32
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
4,046,006
4,524,663
Adjustments for:
Taxation charged
1,280,625
1,081,536
Finance costs
1,137,058
460,702
Investment income
(500,000)
-
0
Loss/(gain) on disposal of tangible fixed assets
76,899
(77,293)
Depreciation and impairment of tangible fixed assets
1,039,043
1,501,241
Other gains and losses
(1,982,389)
(2,697,514)
Decrease in deferred income
(41,923)
(61,728)
Movements in working capital:
Increase in stocks
(705,159)
(8,374,174)
Increase in debtors
(161,202)
(8,815,189)
Increase in creditors
4,417,492
2,098,345
Cash generated from/(absorbed by) operations
8,606,450
(10,359,411)
33
Analysis of changes in net debt
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
2,491,361
391,146
2,882,507
Bank overdrafts
(27,300,195)
8,050,195
(19,250,000)
(24,808,834)
8,441,341
(16,367,493)
Borrowings excluding overdrafts
(62,500)
62,500
-
(24,871,334)
8,503,841
(16,367,493)
2023-06-302022-07-01falseCCH SoftwareCCH Accounts Production 2023.300S G GillieG BairdG BrightP A JacksonE RustC BirnieJ HutchesonC M ScholeyR DavisonR DavisonS Y Duckfalse030663522022-07-012023-06-3003066352bus:Director12022-07-012023-06-3003066352bus:Director32022-07-012023-06-3003066352bus:CompanySecretaryDirector12022-07-012023-06-3003066352bus:Director42022-07-012023-06-3003066352bus:Director52022-07-012023-06-3003066352bus:Director62022-07-012023-06-3003066352bus:Director72022-07-012023-06-3003066352bus:Director82022-07-012023-06-3003066352bus:Director92022-07-012023-06-3003066352bus:Director22022-07-012023-06-3003066352bus:Director102022-07-012023-06-3003066352bus:CompanySecretary12022-07-012023-06-3003066352bus:RegisteredOffice2022-07-012023-06-30030663522023-06-30030663522021-07-012022-06-3003066352core:RetainedEarningsAccumulatedLosses2021-07-012022-06-3003066352core:RetainedEarningsAccumulatedLosses2022-07-012023-06-30030663522022-06-3003066352core:LandBuildingscore:OwnedOrFreeholdAssets2023-06-3003066352core:ConstructionInProgressAssetsUnderConstruction2023-06-3003066352core:PlantMachinery2023-06-3003066352core:FurnitureFittings2023-06-3003066352core:ComputerEquipment2023-06-3003066352core:MotorVehicles2023-06-3003066352core:LandBuildingscore:OwnedOrFreeholdAssets2022-06-3003066352core:ConstructionInProgressAssetsUnderConstruction2022-06-3003066352core:PlantMachinery2022-06-3003066352core:FurnitureFittings2022-06-3003066352core:ComputerEquipment2022-06-3003066352core:MotorVehicles2022-06-3003066352core:CurrentFinancialInstrumentscore:WithinOneYear2023-06-3003066352core:CurrentFinancialInstrumentscore:WithinOneYear2022-06-3003066352core:CurrentFinancialInstruments2023-06-3003066352core:CurrentFinancialInstruments2022-06-3003066352core:ShareCapital2023-06-3003066352core:ShareCapital2022-06-3003066352core:RetainedEarningsAccumulatedLosses2023-06-3003066352core:RetainedEarningsAccumulatedLosses2022-06-3003066352core:ShareCapital2021-06-3003066352core:RetainedEarningsAccumulatedLosses2021-06-300306635212022-07-012023-06-300306635212021-07-012022-06-300306635222022-07-012023-06-300306635222021-07-012022-06-30030663522022-06-30030663522021-06-3003066352core:WithinOneYear2023-06-3003066352core:WithinOneYear2022-06-3003066352core:Goodwill2022-07-012023-06-3003066352core:LandBuildingscore:OwnedOrFreeholdAssets2022-07-012023-06-3003066352core:PlantMachinery2022-07-012023-06-3003066352core:FurnitureFittings2022-07-012023-06-3003066352core:ComputerEquipment2022-07-012023-06-3003066352core:MotorVehicles2022-07-012023-06-3003066352core:UKTax2022-07-012023-06-3003066352core:UKTax2021-07-012022-06-300306635232022-07-012023-06-300306635232021-07-012022-06-300306635242022-07-012023-06-300306635242021-07-012022-06-3003066352core:Goodwill2022-06-3003066352core:Goodwill2023-06-3003066352core:Goodwill2022-06-3003066352core:LandBuildingscore:OwnedOrFreeholdAssets2022-06-3003066352core:ConstructionInProgressAssetsUnderConstruction2022-06-3003066352core:PlantMachinery2022-06-3003066352core:FurnitureFittings2022-06-3003066352core:ComputerEquipment2022-06-3003066352core:MotorVehicles2022-06-3003066352core:ConstructionInProgressAssetsUnderConstruction2022-07-012023-06-3003066352core:Non-currentFinancialInstruments2023-06-3003066352core:Non-currentFinancialInstruments2022-06-3003066352core:Non-currentFinancialInstrumentscore:UnlistedNon-exchangeTraded2023-06-3003066352core:Non-currentFinancialInstrumentscore:UnlistedNon-exchangeTraded2022-06-3003066352bus:PrivateLimitedCompanyLtd2022-07-012023-06-3003066352bus:FRS1022022-07-012023-06-3003066352bus:Audited2022-07-012023-06-3003066352bus:FullAccounts2022-07-012023-06-30xbrli:purexbrli:sharesiso4217:GBP