MERCIAN LIMITED
Company registration number 05238329 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
MERCIAN LIMITED
COMPANY INFORMATION
Directors
Mr A Heal
Mr J L Carter
Mr M J F Read
Mr P J Kemp
Mr G T Stanier
Secretary
Mr A Heal
Company number
05238329
Registered office
Units 3 & 4 The Barns Highfield Farm
Mill Lane
Snelson
Macclesfield
Cheshire
SK11 9BN
Auditor
Dyke Yaxley Limited
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
MERCIAN LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
MERCIAN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

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

Review of the business

The company achieved its strongest financial results to date with sales and profits up by over 20%. This was achieved by having the highest potato prices we have experienced brought on by the worse drought in almost fifty years. Also, the contract price of potatoes increased by around 20%, brought on by the increased growing costs due to the war in Ukraine.

The drought had a significant impact on the tonnage that we had contracted to be delivered and we lost 22,000t of potatoes. Our customers provided financial support to allow us to deliver the contract shortfalls and subsequently meet any additional requirements that they had. This resulted in the largest open market trading season that we have had since incorporation.

Our continued investment and focus on our potato supply allowed us to correctly assess our potato position from a very early stage to help mitigate the effects of the extreme weather conditions. The effort of all the staff and our ability to respond has firmly established ourselves as the market leader with our customers.

Future developments

Negative effects of leaving the EU and of Covid, although not too disruptive, have now significantly reduced. The main impact of Brexit is the movement of seed potatoes due to phytosanitary concerns, we are managing it, but the situation is far from ideal. We do not foresee anything now to disrupt our industry, but have considered the following concerns:

Firstly, the effects of possible climate change on the weather looks very evident, which is a seasonal matter. The 20% price uplift we gave to our growers has been lost, the heat and drought reduced yields, and as a result farm’s cash position has not benefited from the price rise. We had a very late Spring, a very hot June and a very wet Aug-Nov. The risk of growing potatoes is increasing significantly.

Secondly, certainly not seasonal the massive effect of inflation is going to impact on our ability to grow and supply potatoes. This situation is very current at the time of writing this review, therefore we are still putting plans in place. The only likely solution is a significant price incentive for potato growers, which in turn will continue the spiral of inflation. The result of this situation is that we are growing far less potatoes now, which is creating shortfalls within the trade. Prices will once again increase to encourage growing of potato.

After profits significantly dipped in our 2022-2023 accounts, our strengths, mainly our cash position and no borrowings, allowed us to trade very high value potatoes with new suppliers due to our financial strengths and ability to lower the risk by delivering the potatoes to the correct markets.

Finally, we continue to strengthen our position as the market leader due to our ability to reduce the risk for our customers. We have decided to maintain our tonnage volumes and not go for growth with our contracts, this is to ensure we continue to deliver a quality premium product.

We have expanded our seed division and trading division to maximise our full procurement and sales potential. We expect significant growth in the short-term in both areas but remaining true to our contracting core. Our very strong financial position will become a major attribute within the supply-chain as the small businesses will find the “risk to reward” too great.

Key performance indicators

Our key performance indicators remain to be turnover, which has increased from £37.7m in 2022 to £48.2m in 2023, as well as gross profit margin which has remained relatively constant at 11.15% (2022: 11.17%).

MERCIAN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -

On behalf of the board

Mr P J Kemp
Director
8 February 2024
MERCIAN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -

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

Principal activities
The principal activity of the company is that of potato merchants.
Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £1,000,000. 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:

Mr A Heal
Mr J L Carter
Mr M J F Read
Mr P J Kemp
Mr G T Stanier
Auditor

In accordance with the company's articles, a resolution proposing that Dyke Yaxley Limited be reappointed as auditor of the company will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually 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 auditor is aware of that information.

Disclosure in the Strategic Report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of review of business, principal risks and uncertainties and future developments.

On behalf of the board
Mr P J Kemp
Director
8 February 2024
MERCIAN LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -

The directors are responsible for preparing the annual 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:

 

 

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.

MERCIAN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MERCIAN LIMITED
- 5 -
Opinion

We have audited the financial statements of Mercian 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 contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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:

MERCIAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MERCIAN LIMITED
- 6 -
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.

MERCIAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MERCIAN LIMITED
- 7 -
Irregularities including fraud

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:

 

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.

 

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

 

We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, General Data Protection Regulation (GDPR) and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, scrutinising legal and professional fees and enquiries with management.

 

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

 

We did not identify any key audit matters relating to irregularities, including fraud.

 

As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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.

Stacey Lea FCA
Senior Statutory Auditor
For and on behalf of Dyke Yaxley Limited
12 February 2024
Chartered Accountants
Statutory Auditor
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
MERCIAN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
48,173,900
37,720,807
Cost of sales
(42,802,569)
(33,506,323)
Gross profit
5,371,331
4,214,484
Administrative expenses
(2,224,699)
(1,451,885)
Other operating income
-
0
3,422
Operating profit
4
3,146,632
2,766,021
Interest receivable and similar income
7
35,399
341
Interest payable and similar expenses
8
(568)
(3,362)
Profit before taxation
3,181,463
2,763,000
Tax on profit
9
(656,228)
(508,553)
Profit for the financial year
2,525,235
2,254,447

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

MERCIAN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -
2023
2022
as restated
£
£
Profit for the year
2,525,235
2,254,447
Other comprehensive income
-
-
Total comprehensive income for the year
2,525,235
2,254,447
MERCIAN LIMITED
BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 10 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
11
500,871
482,517
Current assets
Debtors
12
13,991,314
8,797,008
Cash at bank and in hand
5,162,778
4,590,848
19,154,092
13,387,856
Creditors: amounts falling due within one year
13
(10,908,814)
(6,641,371)
Net current assets
8,245,278
6,746,485
Total assets less current liabilities
8,746,149
7,229,002
Provisions for liabilities
Deferred tax liability
14
20,175
28,263
(20,175)
(28,263)
Net assets
8,725,974
7,200,739
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
8,725,874
7,200,639
Total equity
8,725,974
7,200,739
The financial statements were approved by the board of directors and authorised for issue on 8 February 2024 and are signed on its behalf by:
Mr P J Kemp
Director
Company Registration No. 05238329
MERCIAN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 30 June 2022:
Balance at 1 July 2021
100
7,446,192
7,446,292
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
2,254,447
2,254,447
Dividends
10
-
(2,500,000)
(2,500,000)
Balance at 30 June 2022
100
7,200,639
7,200,739
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
2,525,235
2,525,235
Dividends
10
-
(1,000,000)
(1,000,000)
Balance at 30 June 2023
100
8,725,874
8,725,974
MERCIAN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
2,073,520
2,242,708
Interest paid
(568)
(3,362)
Income taxes paid
(480,885)
(550,047)
Net cash inflow from operating activities
1,592,067
1,689,299
Investing activities
Purchase of tangible fixed assets
(133,116)
(36,640)
Proceeds from disposal of tangible fixed assets
77,580
85,000
Repayment of loans
-
0
491,354
Interest received
35,399
341
Net cash (used in)/generated from investing activities
(20,137)
540,055
Financing activities
Dividends paid
(1,000,000)
(2,500,000)
Net cash used in financing activities
(1,000,000)
(2,500,000)
Net increase/(decrease) in cash and cash equivalents
571,930
(270,646)
Cash and cash equivalents at beginning of year
4,590,848
4,861,494
Cash and cash equivalents at end of year
5,162,778
4,590,848
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 13 -
1
Accounting policies
Company information

Mercian Limited is a private company limited by shares incorporated in England and Wales. The registered office is Units 3 & 4 The Barns Highfield Farm, Mill Lane, Snelson, Macclesfield, Cheshire, SK11 9BN.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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 £.

The financial statements have been prepared under the historical cost convention. 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 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.

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
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings Freehold
No depreciation
Plant and machinery
25% straight line
Fixtures, fittings & equipment
25% straight line
Motor vehicles
25% reducing balance

Freehold properties are not depreciated as in the opinion of the directors freehold properties are maintained in such a state of repair that their residual value is at least equal to their net book value. As a result, the corresponding depreciation would not be material and is not therefore charged to the profit and loss account. The directors perform annual impairment reviews to ensure that the carrying value is not higher than the recoverable amount.

MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -

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
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.7
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.

1.8
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.

1.9
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.

1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.12
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.

MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
1.13
Government grants

Government grants are recognised 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.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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
Potato sales
48,173,900
37,720,807
2023
2022
£
£
Turnover analysed by geographical market
UK
48,173,900
37,720,807
2023
2022
£
£
Other revenue
Interest income
35,399
341
Grants received
-
3,032
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
-
0
7,016
Research and development costs
-
1,200
Government grants
-
(3,032)
Fees payable to the company's auditor for the audit of the company's financial statements
10,950
9,000
Depreciation of owned tangible fixed assets
52,605
54,886
Profit on disposal of tangible fixed assets
(15,423)
(85,000)
Operating lease charges
38,272
41,068
5
Employees

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

2023
2022
Number
Number
Sales
6
6
Administration
3
3
Total
9
9

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,574,476
1,098,136
Social security costs
201,803
134,875
Pension costs
5,072
6,247
1,781,351
1,239,258
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
392,520
320,412
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
392,520
320,412
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
35,349
341
Other interest income
50
-
0
Total income
35,399
341
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
35,349
341
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
568
3,362
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
664,707
510,185
Adjustments in respect of prior periods
(391)
(754)
Total current tax
664,316
509,431
Deferred tax
Origination and reversal of timing differences
(8,088)
(878)
Total tax charge
656,228
508,553
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
9
Taxation
(Continued)
- 18 -

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
3,181,463
2,763,000
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
795,366
524,970
Tax effect of expenses that are not deductible in determining taxable profit
974
586
Tax effect of utilisation of tax losses not previously recognised
-
0
(206)
Effect of change in corporation tax rate
(154,162)
-
0
Permanent capital allowances in excess of depreciation
19,526
(14,868)
Research and development tax credit
-
0
(296)
Other non-reversing timing differences
(1,229)
(878)
Under/(over) provided in prior years
(391)
(755)
Loss/(profit) on disposals of assets
(3,856)
-
0
Taxation charge for the year
656,228
508,553
10
Dividends
2023
2022
£
£
Interim paid
1,000,000
2,500,000
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
11
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2022
318,070
129,866
29,266
185,268
662,470
Additions
-
0
24,403
94
108,619
133,116
Disposals
-
0
-
0
-
0
(122,926)
(122,926)
At 30 June 2023
318,070
154,269
29,360
170,961
672,660
Depreciation and impairment
At 1 July 2022
-
0
68,297
28,801
82,855
179,953
Depreciation charged in the year
-
0
25,605
203
26,797
52,605
Eliminated in respect of disposals
-
0
-
0
-
0
(60,769)
(60,769)
At 30 June 2023
-
0
93,902
29,004
48,883
171,789
Carrying amount
At 30 June 2023
318,070
60,367
356
122,078
500,871
At 30 June 2022
318,070
61,569
465
102,413
482,517
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
13,526,517
7,608,162
Unpaid share capital
100
100
Corporation tax recoverable
-
0
30,067
Other debtors
109,887
213,887
Prepayments and accrued income
354,810
916,792
13,991,314
8,769,008
2023
2022
Amounts falling due after more than one year:
£
£
Prepayments and accrued income
-
0
28,000
Total debtors
13,991,314
8,797,008
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
9,791,294
5,651,906
Corporation tax
432,846
279,482
Other taxation and social security
144,684
163,348
Other creditors
4,846
4,846
Accruals and deferred income
535,144
541,789
10,908,814
6,641,371
14
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
2023
2022
Balances:
£
£
Accelerated capital allowances
17,362
28,263
Statutory database figures differ from the trial balance:
Deferred tax balances
20,175
28,263
Difference
(2,813)
-
2023
Movements in the year:
£
Liability at 1 July 2022
28,263
Credit to profit or loss
(10,901)
Liability at 30 June 2023
17,362
Balance per TB
20,175
Warning - Difference exists; check stat db entries
2,813
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
5,072
6,247

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary shares of £1 each
100
100
100
100

The ordinary shares have a right to vote, a right to participate in dividends and the right to participate in a distribution on winding up.

17
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
35,120
39,072
Between two and five years
1,343
6,767
36,463
45,839
18
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
794,663
856,925
6,548,316
5,946,240

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
1,434,008
1,006,123
MERCIAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
18
Related party transactions
(Continued)
- 22 -

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
541,946
623,440
19
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,525,235
2,254,447
Adjustments for:
Taxation charged
656,228
508,553
Finance costs
568
3,362
Investment income
(35,399)
(341)
Gain on disposal of tangible fixed assets
(15,423)
(85,000)
Depreciation and impairment of tangible fixed assets
52,605
54,886
Movements in working capital:
Increase in debtors
(5,224,373)
(639,954)
Increase in creditors
4,114,079
146,755
Cash generated from operations
2,073,520
2,242,708
20
Analysis of changes in net funds
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
4,590,848
571,930
5,162,778
MERCIAN LIMITED
DETAILED PROFIT AND LOSS ACCOUNT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 23 -
21
Prior period adjustment

During the year turnover relating to compliance with the prior year contracts was identified. As these invoices relate to the 2022/2023 harvest year, they should have been recognised in the prior year financial statements.

Changes to the balance sheet
As previously reported
Adjustment
As restated at 30 Jun 2022
£
£
£
Current assets
Debtors due within one year
8,502,122
294,886
8,797,008
Creditors due within one year
Taxation
(386,802)
(56,028)
(442,830)
Net assets
6,961,881
238,858
7,200,739
Capital and reserves
Profit and loss reserves
6,961,781
238,858
7,200,639
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 30 June 2022
£
£
£
Turnover
37,425,921
294,886
37,720,807
Taxation
(452,525)
(56,028)
(508,553)
Profit for the financial period
2,015,589
238,858
2,254,447
2023-06-302022-07-01falseCCH SoftwareCCH Accounts Production 2023.300Mr J L CarterMr M J F ReadMr P J KempMr G T StanierMr G T StanierMr A Healfalse052383292022-07-012023-06-3005238329bus:CompanySecretaryDirector12022-07-012023-06-3005238329bus:Director12022-07-012023-06-3005238329bus:Director22022-07-012023-06-3005238329bus:Director32022-07-012023-06-3005238329bus:Director42022-07-012023-06-3005238329bus:CompanySecretary12022-07-012023-06-3005238329bus:Director52022-07-012023-06-3005238329bus:RegisteredOffice2022-07-012023-06-30052383292023-06-30052383292021-07-012022-06-3005238329core:ContinuingOperations2021-07-012022-06-3005238329core:RetainedEarningsAccumulatedLosses2021-07-012022-06-3005238329core:RetainedEarningsAccumulatedLosses2022-07-012023-06-30052383292022-06-3005238329core:LandBuildingscore:OwnedOrFreeholdAssets2023-06-3005238329core:PlantMachinery2023-06-3005238329core:FurnitureFittings2023-06-3005238329core:MotorVehicles2023-06-3005238329core:LandBuildingscore:OwnedOrFreeholdAssets2022-06-3005238329core:PlantMachinery2022-06-3005238329core:FurnitureFittings2022-06-3005238329core:MotorVehicles2022-06-3005238329core:CurrentFinancialInstrumentscore:WithinOneYear2023-06-3005238329core:CurrentFinancialInstrumentscore:WithinOneYear2022-06-3005238329core:CurrentFinancialInstruments2023-06-3005238329core:CurrentFinancialInstruments2022-06-3005238329core:ShareCapital2023-06-3005238329core:ShareCapital2022-06-3005238329core:RetainedEarningsAccumulatedLosses2023-06-3005238329core:RetainedEarningsAccumulatedLosses2022-06-3005238329core:ShareCapital2021-06-3005238329core:RetainedEarningsAccumulatedLosses2021-06-30052383292022-06-30052383292021-06-3005238329core:LandBuildingscore:OwnedOrFreeholdAssets2022-07-012023-06-3005238329core:PlantMachinery2022-07-012023-06-3005238329core:FurnitureFittings2022-07-012023-06-3005238329core:MotorVehicles2022-07-012023-06-300523832912022-07-012023-06-300523832912021-07-012022-06-3005238329core:UKTax2022-07-012023-06-3005238329core:UKTax2021-07-012022-06-300523832922022-07-012023-06-300523832922021-07-012022-06-3005238329core:LandBuildingscore:OwnedOrFreeholdAssets2022-06-3005238329core:PlantMachinery2022-06-3005238329core:FurnitureFittings2022-06-3005238329core:MotorVehicles2022-06-3005238329core:Non-currentFinancialInstruments2023-06-3005238329core:WithinOneYear2023-06-3005238329core:WithinOneYear2022-06-3005238329core:BetweenTwoFiveYears2023-06-3005238329core:BetweenTwoFiveYears2022-06-3005238329core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntitycore:SaleOrPurchaseGoods2022-07-012023-06-3005238329core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntitycore:SaleOrPurchaseGoods2021-07-012022-06-3005238329core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntity2023-06-3005238329bus:PrivateLimitedCompanyLtd2022-07-012023-06-3005238329bus:FRS1022022-07-012023-06-3005238329bus:Audited2022-07-012023-06-3005238329bus:FullAccounts2022-07-012023-06-30xbrli:purexbrli:sharesiso4217:GBP