Company Registration Number 07308930
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GRAIN COMMUNICATIONS LIMITED
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GRAIN COMMUNICATIONS LIMITED
REGISTERED NUMBER: 07308930
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Page 1
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GRAIN COMMUNICATIONS LIMITED
REGISTERED NUMBER: 07308930
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 3 to 9 form part of these financial statements.
Page 2
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Grain Communications Limited is a private company, limited by shares, incorporated in England & Wales, registered number 07308930. The registered office is Clifford House Cooper Way, Parkhouse, Carlisle, CA3 0JG.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The following principal accounting policies have been applied:
The company had net liabilities of £1,324k (2023: net assets of £2,227k) and net current liabilities of £95,116k (2023: net current liabilities of £44,104k).
The company is building network infrastructure for use by its parent company, Grain Connect Limited. Charges are being levied for the use of that network infrastructure, but because charges are only levied for completed networks, the income generated by the assets is lagging the cost of the building of those assets. The infrastructure build is being financed via loans from the parent company which is repayable on demand totalling £112,800k, causing the net current liability position. However, these amounts would not be recalled if doing so would prejudice the ability of this company to continue as a going concern.
As such, the directors consider the company to be a going concern and have prepared the accounts on that basis.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Use of network assets
Revenue includes a contractual sum due from a group company in respect of the use of Grain Communication Limited’s network assets.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Page 3
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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Intangible fixed assets and amortisation - other intangible
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Other intangible assets consist of a licence from Ofcom to operate fibre networks. It is amortised to profit and loss account over its estimated useful economic life of 10 years.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Long-term leasehold property
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3 to 25 years straight line
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Page 4
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Recognition of deferred tax asset
Deferred tax assets should only be recognised where it is probable that future taxable profits will be made against which the potential asset can be utilised.
The directors have considered the performance of the company against business plans at the group level, since these losses could be offset against the taxable profits of other companies in the group in future. Performance is tracking favourably against those plans, which forecast profitability in the medium term. The directors have determined that there is a probability that the assets will be utilised in future on the grounds that the forecast profitability is more likely than not to arise. The directors have determined that, because the company would be required to consent to any relief of losses to group companies, it is appropriate to recognise the asset as an asset of this company.
This is a significant judgement taken in the preparation of these accounts, given the magnitude of the deferred tax asset recognised. There is inherently uncertainty as to whether the forecast profitability will be realised.
Depreciation
Tangible fixed assets are depreciated over their estimated useful economic life, to a residual value at the end of that useful economic life.
Determining both the useful economic life and residual values for assets involve forecasting future events, and as such there is inherently uncertainty in these estimates. Because of the materiality of tangible fixed assets to these accounts, and the early-stage nature of the company meaning that there is limited track record against which to benchmark these estimates, the directors have identified depreciation as a key source of estimation uncertainty in these accounts.
Work has been undertaken to determine accurate estimates for both the useful economic lives and residual values, particularly by benchmarking those values against industry averages.
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The Company has no employees other than the directors, who did not receive any remuneration (2023 - £NIL).
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Page 5
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Charge for the year on owned assets
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Page 6
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Network infrastructure, plant, and machinery
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Charge for the year on owned assets
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Page 7
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Due after more than one year
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Prepayments and accrued income
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Amounts owed by group undertakings
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Page 8
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GRAIN COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Allotted, called up and fully paid
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100 (2023 - 100) Ordinary shares of £1.00 each
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Commitments under operating leases
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At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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The ultimate parent company of the entity and the parent of the largest group that consolidates these accounts is Grain Connect Topco Limited. The company's immediate parent company is Grain Connect Limited. The registered office address of both of these companies is Clifford House, Cooper Way, Parkhouse, Carlisle, United Kingdom, CA3 0JG.
There is no ultimate controlling party.
The auditors' report on the financial statements for the year ended 31 March 2024 was unqualified.
The audit report was signed on 27 September 2024 by Joanna Gray (Senior Statutory Auditor) on behalf of Armstrong Watson Audit Limited.
Page 9
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