Company registration number 09912298 (England and Wales)
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
COMPANY INFORMATION
Directors
Mr R J Lee
Mr S Ripley
Mr A Haste
Company number
09912298
Registered office
Padro House Chear Fen
Ely Road
Chittering
Cambridge
CB25 9GE
Auditor
Ensors Accountants LLP
Victory House
Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 22
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The company is a wholly owned subsidiary of Pretoria Energy Group Limited and as a farming business growing feedstock for use by other group companies in their anaerobic digester plants which generate green energy.

The results for the year continued to be impacted by difficult growing conditions and increases in underlying input costs throughout 2023. Despite this, the company made a small profit. The directors therefore consider the overall result of the company as a whole to be acceptable.

The company’s net current liabilities are £3.4m (2022: liabilities £2.4m).

Principal risks and uncertainties

The directors have considered the key risks facing the business and have mitigated these in various ways. Each of the digester businesses has a contract to supply a majority of their output as green energy to the National Grid. These contracts give a guaranteed price to the Group in return for this energy. The current contracts expire in 2037.

To ensure continued supply of raw materials, the company has been increasing its stock holding over the past few years to support the other companies in the Pretoria Energy group (in which the company is a member).

Development and performance

The company has net liabilities at the year end however the directors consider the financial position of the group overall to be strong. The year ended 31 December 2023 was the fifth full year of trading as part of the Pretoria Energy group, and the expectation is that the future results will follow the business plan.

Key performance indicators

The directors manage and monitor the business using various key performance indicators. The financial indictors are turnover, overall gross profit and earnings before interest, depreciation and amortisation (EBITDA).

In the period:

- Turnover was £23.9m (2022: £19.6m)

- Gross profit was £6.8m (2022: loss £2.6m)

- EBITDA was £5.4m (2022: (£3.8m))

The Directors also regularly review their cash flow position and working capital requirements.

On behalf of the board

Mr S Ripley
Director
19 July 2024
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company is the production of crops for use in green gas and electricity production.

Results and dividends

The results for the year are set out on page 7.

No ordinary dividends were paid. 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 R J Lee
Mr S Ripley
Mr A Shaw
(Resigned 7 April 2023)
Mr A Haste
Auditor

In accordance with the company's articles, a resolution proposing that Ensors Accountants LLP 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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr S Ripley
Director
19 July 2024
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PRETORIA ENERGY COMPANY (ARABLE) LIMITED
- 4 -
Opinion

We have audited the financial statements of Pretoria Energy Company (Arable) Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

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:

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PRETORIA ENERGY COMPANY (ARABLE) LIMITED
- 5 -
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 and the Directors' Report.

 

We have nothing to report in respect of the following matters where 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of 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.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PRETORIA ENERGY COMPANY (ARABLE) LIMITED
- 6 -

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.

Jayson Lawson
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
19 July 2024
Chartered Accountants
Statutory Auditor
Victory House
Vision Park
Chivers Way, Histon
Cambridge
CB24 9ZR
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
as restated
Notes
£
£
Turnover
3
23,935,724
19,581,736
Cost of sales
(17,356,104)
(22,228,471)
Gross profit/(loss)
6,579,620
(2,646,735)
Administrative expenses
(4,235,772)
(2,581,634)
Other operating income
222,428
-
0
Operating profit/(loss)
4
2,566,276
(5,228,369)
Interest payable and similar expenses
7
(1,542,780)
(1,714,033)
Profit/(loss) before taxation
1,023,496
(6,942,402)
Tax on profit/(loss)
8
(456,778)
(1,020,833)
Profit/(loss) for the financial year
566,718
(7,963,235)

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

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
9
12,449,242
9,374,288
Investments
10
-
0
60
12,449,242
9,374,348
Current assets
Stocks
11
43,116,039
34,633,364
Debtors
12
3,488,440
5,248,467
Cash at bank and in hand
138,386
108,865
46,742,865
39,990,696
Creditors: amounts falling due within one year
13
(49,394,981)
(42,376,393)
Net current liabilities
(2,652,116)
(2,385,697)
Total assets less current liabilities
9,797,126
6,988,651
Creditors: amounts falling due after more than one year
15
(18,637,425)
(16,852,446)
Provisions for liabilities
Deferred tax liability
17
2,082,607
1,625,829
(2,082,607)
(1,625,829)
Net liabilities
(10,922,906)
(11,489,624)
Capital and reserves
Called up share capital
19
10,000
10,000
Profit and loss reserves
(10,932,906)
(11,499,624)
Total equity
(10,922,906)
(11,489,624)

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 19 July 2024 and are signed on its behalf by:
Mr S  Ripley
Director
Company registration number 09912298 (England and Wales)
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
10,000
(3,536,389)
(3,526,389)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(7,963,235)
(7,963,235)
Balance at 31 December 2022
10,000
(11,499,624)
(11,489,624)
Year ended 31 December 2023:
Profit and total comprehensive income
-
566,718
566,718
Balance at 31 December 2023
10,000
(10,932,906)
(10,922,906)
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information

Pretoria Energy Company (Arable) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Padro House Chear Fen, Ely Road, Chittering, Cambridge, CB25 9GE.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Pretoria Energy Group Limited. These consolidated financial statements are available from its registered office, Padro House, Chear Fen, Ely Road, Chittering, Cambs, CB25 9GE.

1.2
Going concern

The directors have considered the current trading position and future forecasts upon the basis of preparation of the financial statements. Having considered all of these factors and considering future forecasts, relationships with customers and suppliers the directors continue to adopt the going concern basis of preparation.true

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 trade discounts.

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
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.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -

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:

Leasehold improvements
5% straight line
Plant and equipment
20% 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.

During the year, the residual value of plant and machinery within tangible fixed assets was reassessed to reflect usage being higher than anticipated. The useful economic lives remain the same. As a result of the change, the depreciation charged to the Profit and Loss Account for the year is £1,095,000 higher than it would otherwise have been.

1.5
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.

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.

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.

1.6
Stocks

Stocks are stated at the lower of cost and net realisable value. The cost of stock includes the input costs to grow the relevant feedstock.

 

Feedstock purchased is recorded at the costs incurred in bringing the stocks to their present location and condition.

 

Work in progress relates to feedstock transferred into the aerobic digesters at cost.

At each reporting date, an assessment is made for impairment based upon the lower of cost or net realisable value.

 

Reversals of impairment losses are also recognised in profit or loss.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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.

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.

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.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 and loans from fellow group companies, 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.

 

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.

Derecognition of financial liabilities

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

1.9
Equity instruments

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

1.10
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.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

1.11
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.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

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.

1.12
Retirement benefits

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

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

1.14
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.

 

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Tax

The company recognises tax assets and liabilities based upon estimates and assessments of many factors including past experience, advice received and judgements about the outcome of future events. To the extent that the final outcome of these matters is different from the amounts recorded, such differences will impact on the taxation charge made in income statement in the period in which such determination is made.

3
Turnover

The company's turnover is all derived from its principle activity and is all generated within the UK.

 

4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
-
0
83
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
9,255
Depreciation of owned tangible fixed assets
687,426
468,824
Depreciation of tangible fixed assets held under finance leases
2,152,586
952,295
Loss/(profit) on disposal of tangible fixed assets
101,111
(4,155)
Operating lease charges
21,630
24,249
5
Employees

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

2023
2022
Number
Number
3
3
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 16 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,935,605
1,445,004
Social security costs
194,711
161,500
Pension costs
31,312
27,793
2,161,628
1,634,297

The company does not directly employ any individuals. All labour and staff costs were recharged from the related company, Pretoria Energy Company (Services) Limited. Costs above relate to recharges.

 

6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
99,463
93,333
Company pension contributions to defined contribution schemes
319
404
99,782
93,737

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

7
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
1,098,581
1,286,066
Interest on finance leases and hire purchase contracts
444,199
427,967
1,542,780
1,714,033
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
456,778
1,020,833

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

2023
2022
£
£
Profit/(loss) before taxation
1,023,496
(6,942,402)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
240,522
(1,319,056)
Tax effect of expenses that are not deductible in determining taxable profit
308,915
7,404
Tax effect of income not taxable in determining taxable profit
(259)
-
0
Group relief
(20,331)
1,196,304
Fixed asset differences
(8,423)
(100,194)
Adjustments to tax charge in respect of previous periods - deferred tax
973,590
429,842
Remeasurement of deferred tax for changes in tax rates
32,735
(68,066)
Movement in deferred tax not recognised
(1,069,971)
874,599
Taxation charge for the year
456,778
1,020,833
9
Tangible fixed assets
Leasehold improvements
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023
72,012
13,149,667
13,221,679
Additions
-
0
6,515,899
6,515,899
Disposals
-
0
(1,204,998)
(1,204,998)
At 31 December 2023
72,012
18,460,568
18,532,580
Depreciation and impairment
At 1 January 2023
39,606
3,807,785
3,847,391
Depreciation charged in the year
7,202
2,832,810
2,840,012
Eliminated in respect of disposals
-
0
(604,065)
(604,065)
At 31 December 2023
46,808
6,036,530
6,083,338
Carrying amount
At 31 December 2023
25,204
12,424,038
12,449,242
At 31 December 2022
32,406
9,341,882
9,374,288
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Tangible fixed assets
(Continued)
- 18 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Plant and equipment
9,898,701
6,818,903
10
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
-
0
60
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
60
Disposals
(60)
At 31 December 2023
-
Carrying amount
At 31 December 2023
-
At 31 December 2022
60

On 18 July 2023, Pretoria Energy Company (Arable) transferred its shareholding in Genesis Biomass Limited to Pretoria Energy Group Limited at cost, equal to the nominal value of the shareholding.

11
Stocks
2023
2022
£
£
Raw materials and consumables
39,245,068
32,808,724
Work in progress
3,870,971
1,824,640
43,116,039
34,633,364
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,117,173
1,398,703
Amounts owed by group undertakings
1,293,167
3,299,212
Other debtors
562,527
307,938
Prepayments and accrued income
515,573
242,614
3,488,440
5,248,467
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
2,981,572
2,537,592
Trade creditors
9,634,849
6,434,305
Amounts owed to group undertakings
35,587,802
30,205,328
Taxation and social security
-
0
110,222
Other creditors
68,182
2,332,545
Accruals and deferred income
1,122,576
756,401
49,394,981
42,376,393
14
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
11,383,962
12,283,962
Payable after one year
11,383,962
12,283,962

The loan from group undertakings, is unsecured, carries interest at a market rate and is not repayable on demand by the lender.

 

15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
7,253,463
4,568,484
Other borrowings
14
11,383,962
12,283,962
18,637,425
16,852,446
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
2,981,572
2,537,592
In two to five years
7,253,463
4,568,484
10,235,035
7,106,076

Borrowings under hire purchase arrangements are secured on the assets acquired.

 

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,283,008
1,625,829
Tax losses
(200,401)
-
2,082,607
1,625,829
2023
Movements in the year:
£
Liability at 1 January 2023
1,625,829
Charge to profit or loss
456,778
Liability at 31 December 2023
2,082,607

The deferred tax liability set out above is expected to reverse within 3 years and relates to accelerated capital.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
31,312
27,793

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.

PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
20
Financial commitments, guarantees and contingent liabilities

The company has registered a debenture in favour of its parent company's lender in relation to a fixed charge over certain freehold land and a floating charge over other property.

21
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
-
0
331
22
Related party transactions
Transactions with related parties

The company has taken the exemption afforded by FRS102 not to disclose transactions with entities within the Pretoria Energy Group Limited group.

 

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

 

The company purchased £2,491,765 (2022 - £2,172,405) of goods and services from companies under common control. At the year end the company owed £964,134 (2022 - £1,171,330) to these companies.

 

The company made sales of £136,988 (2022 - £118,646) of goods and services to companies under common control. At the year end the company was due £440,508 (2022 - £287,039) from these companies.

 

An amount of £22,474 was owed to the directors (2022: £22,474).

23
Ultimate controlling party

At the year end the company was under the immediate control of Pretoria Energy Company Holdings Limited, a company registered in England and Wales. The company's ultimate parent undertaking is Pretoria Energy Group Limited a company registered in England and Wales whose financial statements are the only consolidation in which the results of Pretoria Energy Company (Arable) Limited are consolidated. Copies of the accounts of Pretoria Energy Group Limited can be obtained from Companies House.

 

The company's ultimate controlling party is Mr S Ripley by virtue of his majority shareholding in Pretoria Energy Group Limited.

24
Prior period adjustment
PRETORIA ENERGY COMPANY (ARABLE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Prior period adjustment
(Continued)
- 22 -
Reconciliation of changes in equity
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Understatement of cost of sales
-
(109,276)
Equity as previously reported
(3,526,389)
(11,380,348)
Equity as adjusted
(3,526,389)
(11,489,624)
Analysis of the effect upon equity
Profit and loss reserves
-
(109,276)
Reconciliation of changes in loss for the previous financial period
2022
£
Adjustments to prior year
Understatement of cost of sales
(109,276)
Loss as previously reported
(7,853,959)
Loss as adjusted
(7,963,235)
Notes to reconciliation
Understatement of cost of sales

During the year, it was identified that prior year cost of sales were understated by £109,276 relating to an understatement of equipment hire costs. This led to an increase in cost of sales being recognised in the prior year within the Income Statement. Subsequently, a corresponding adjustment to debtors, and thus the Balance Sheet was also adjusted.

2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100Mr R J LeeMr S RipleyMr A ShawMr A Hastefalsefalse099122982023-01-012023-12-3109912298bus:Director12023-01-012023-12-3109912298bus:Director22023-01-012023-12-3109912298bus:Director42023-01-012023-12-3109912298bus:Director32023-01-012023-12-3109912298bus:RegisteredOffice2023-01-012023-12-31099122982023-12-31099122982022-01-012022-12-3109912298core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3109912298core:RetainedEarningsAccumulatedLosses2023-01-012023-12-31099122982022-12-3109912298core:LeaseholdImprovements2023-12-3109912298core:PlantMachinery2023-12-3109912298core:LeaseholdImprovements2022-12-3109912298core:PlantMachinery2022-12-3109912298core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3109912298core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3109912298core:Non-currentFinancialInstrumentscore:AfterOneYear2023-12-3109912298core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3109912298core:CurrentFinancialInstruments2023-12-3109912298core:CurrentFinancialInstruments2022-12-3109912298core:Non-currentFinancialInstruments2023-12-3109912298core:Non-currentFinancialInstruments2022-12-3109912298core:ShareCapital2023-12-3109912298core:ShareCapital2022-12-3109912298core:RetainedEarningsAccumulatedLosses2023-12-3109912298core:RetainedEarningsAccumulatedLosses2022-12-3109912298core:ShareCapital2021-12-3109912298core:RetainedEarningsAccumulatedLosses2021-12-3109912298core:LeaseholdImprovements2023-01-012023-12-3109912298core:PlantMachinery2023-01-012023-12-3109912298dpl:Item12023-01-012023-12-3109912298dpl:Item12022-01-012022-12-3109912298core:UKTax2023-01-012023-12-3109912298core:UKTax2022-01-012022-12-310991229812023-01-012023-12-310991229812022-01-012022-12-310991229822023-01-012023-12-310991229822022-01-012022-12-310991229832023-01-012023-12-310991229832022-01-012022-12-310991229842023-01-012023-12-310991229842022-01-012022-12-3109912298core:LeaseholdImprovements2022-12-3109912298core:PlantMachinery2022-12-31099122982022-12-3109912298core:WithinOneYear2023-12-3109912298core:WithinOneYear2022-12-3109912298core:BetweenTwoFiveYears2023-12-3109912298core:BetweenTwoFiveYears2022-12-3109912298bus:PrivateLimitedCompanyLtd2023-01-012023-12-3109912298bus:FRS1022023-01-012023-12-3109912298bus:Audited2023-01-012023-12-3109912298bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP