Company registration number 02610251 (England and Wales)
NORTH HERTS FARMERS GRAIN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
NORTH HERTS FARMERS GRAIN LIMITED
COMPANY INFORMATION
Directors
F L Sapsed
R K Vigus
M L Sheppard
R W Smith
D Mackay
M Firth
A Clark
R Strzelecki
A Williams
Secretary
M Firth
Company number
02610251
Registered office
Weston Barns
Hitchin Road
Weston
Hitchin
Herts
SG4 7AX
Auditor
TC Audit Limited
Suite 501
The Nexus Building
Broadway
Letchworth Garden City
Herts
SG6 9BL
NORTH HERTS FARMERS GRAIN LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
NORTH HERTS FARMERS GRAIN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The directors present the strategic report for the year ended 31 July 2024.
Fair review of the business
The UK carried a substantial surplus of wheat from harvest 2022 into the 2023 marketing season and alongside a better than expected harvest, gave the country a surplus over and above domestic requirements. The wet weather during the autumn and winter of 2023 negatively impacted plantings and the size of the harvest 2024 accordingly.
As a consequence, harvest 2024 prices rose to import levels and encouraged the surplus to be carried over into the new season. The changed dynamic, from export competitiveness to import parity, rewarded the companies focus on its long standing policy of building strong relationships with domestic consumers.
The company continued to perform strongly in a competitive market. Turnover was down due to average prices being lower during the year although the tonnage traded continued to rise.
Principal risks and uncertainties
The introduction of the Government’s Sustainable Farming Initiative gave growers alternatives to growing crops and the wet weather almost certainly increased the take up of the scheme. Government policy on planning, net zero and energy will put further pressure on land used for food production. In addition, recent Government changes to IHT have the potential to alter the structure of land ownership in the UK in the years to come.
The Directors continue to believe that the flexible business structure, sound risk management, stable ownership, and a strong emphasis on customer service to both growers and consumers will allow the company to remain competitive in the changing environment.
The management and control of risks for the company is embedded within basic operating procedures. These procedures comprise a range of measures including monthly reporting and continuous monitoring by senior management.
The directors are satisfied that the company’s exposure to risks from price volatility, credit and foreign exchange are adequately managed and mitigated. The company uses financial instruments to mitigate their foreign exchange risk and price volatility risk.
M Firth
Director
24 March 2025
NORTH HERTS FARMERS GRAIN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 July 2024.
Principal activities
The principal activity of the company continued to be that of the buying and selling of grain, oil seed, pulses and other agricultural products.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
F L Sapsed
R K Vigus
M L Sheppard
R W Smith
D Mackay
M Firth
A Clark
R Strzelecki
A Williams
Results and dividends
The results for the year are set out on page 7.
No dividends have been paid during the year and the Directors do not recommend the payment of a final dividend.
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.
On behalf of the board
M Firth
Director
24 March 2025
NORTH HERTS FARMERS GRAIN LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
NORTH HERTS FARMERS GRAIN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NORTH HERTS FARMERS GRAIN LIMITED
- 4 -
Opinion
We have audited the financial statements of North Herts Farmers Grain Limited (the 'company') for the year ended 31 July 2024 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:
give a true and fair view of the state of the company's affairs as at 31 July 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
NORTH HERTS FARMERS GRAIN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NORTH HERTS FARMERS GRAIN 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 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
Irregularities including Fraud
Based on our understanding of the company and the industry in which it operates, we identified that the principle risks of non-compliance with laws and regulations related to the acts by the company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risks of override of controls), and determined that the principal risks were related to inflated revenue & profit.
Audit procedures performed included: Review of the financial statements disclosures to underlying supporting documentation, enquiries of management, reasonableness checks (including sensitivity analysis) and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
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. Also, the risk of not deducting 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.
NORTH HERTS FARMERS GRAIN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NORTH HERTS FARMERS GRAIN LIMITED
- 6 -
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.
Peter Woodhall FCA (Senior Statutory Auditor)
For and on behalf of TC Audit Limited
25 March 2025
Suite 501
The Nexus Building
Broadway
Letchworth Garden City
Herts
SG6 9BL
NORTH HERTS FARMERS GRAIN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
95,756,989
112,373,199
Cost of sales
(94,126,860)
(109,171,544)
Gross profit
1,630,129
3,201,655
Administrative expenses
(1,233,483)
(1,771,914)
Operating profit
4
396,646
1,429,741
Interest receivable and similar income
115,648
Profit before taxation
512,294
1,429,741
Tax on profit
8
(128,361)
(295,091)
Profit for the financial year
383,933
1,134,650
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NORTH HERTS FARMERS GRAIN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 8 -
2024
2023
£
£
Profit for the year
383,933
1,134,650
Other comprehensive income
-
-
Total comprehensive income for the year
383,933
1,134,650
NORTH HERTS FARMERS GRAIN LIMITED
BALANCE SHEET
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
9
3,279
4,372
Tangible assets
10
166
220
3,445
4,592
Current assets
Stocks
11
2,676,510
1,608,049
Debtors
12
10,854,038
11,135,206
Investments
13
29,000
Cash at bank and in hand
1,705,967
4,520,495
15,265,515
17,263,750
Creditors: amounts falling due within one year
14
(7,808,584)
(10,040,949)
Net current assets
7,456,931
7,222,801
Net assets
7,460,376
7,227,393
Capital and reserves
Called up share capital
18
14,000
14,400
Capital redemption reserve
2,800
2,400
Profit and loss reserves
7,443,576
7,210,593
Total equity
7,460,376
7,227,393
The financial statements were approved by the board of directors and authorised for issue on 24 March 2025 and are signed on its behalf by:
F L Sapsed
M Firth
Director
Director
Company Registration No. 02610251
NORTH HERTS FARMERS GRAIN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 August 2022
14,600
2,200
6,132,992
6,149,792
Year ended 31 July 2023:
Profit and total comprehensive income for the year
-
-
1,134,650
1,134,650
Redemption of share capital
18
(200)
200
(57,049)
(57,049)
Balance at 31 July 2023
14,400
2,400
7,210,593
7,227,393
Year ended 31 July 2024:
Profit and total comprehensive income for the year
-
-
383,933
383,933
Redemption of share capital
18
(400)
400
(150,950)
(150,950)
Balance at 31 July 2024
14,000
2,800
7,443,576
7,460,376
NORTH HERTS FARMERS GRAIN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
23
(2,448,310)
2,731,168
Income taxes paid
(301,916)
(156,393)
Net cash (outflow)/inflow from operating activities
(2,750,226)
2,574,775
Investing activities
Acquisition of other investments
(29,000)
Interest received
115,648
Net cash generated from/(used in) investing activities
86,648
-
Financing activities
Redemption of shares
(150,950)
(57,049)
Net cash used in financing activities
(150,950)
(57,049)
Net (decrease)/increase in cash and cash equivalents
(2,814,528)
2,517,726
Cash and cash equivalents at beginning of year
4,520,495
2,002,769
Cash and cash equivalents at end of year
1,705,967
4,520,495
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
1
Accounting policies
Company information
North Herts Farmers Grain Limited is a private company limited by shares incorporated in England and Wales. The registered office is Weston Barns, Hitchin Road, Weston, Hitchin, Herts, SG4 7AX.
1.1
Accounting convention
The financial statements are prepared under the historical cost convention.
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 on the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
At 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. true
1.3
Turnover
Turnover comprises the value of sales excluding value added tax and trade discounts. Sales are recognised when goods are physically receipted to the customer, being when the risk and rewards of the goods are transferred.
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.
At the year end the company has a number of contracts to sell goods at a future date. The contract terms dictate that the risks and rewards of ownership of such goods do not pass to the customer until physical delivery of the goods has taken place. Consequently these contracts to sell are not included within turnover.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Software
25% reducing balance
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 13 -
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:
Fixtures, fittings & equipment
25% reducing balance
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
Stocks
The directors stock control system enables the accurate measurement of unsold grain at the year end. Accordingly grain stock on hand at the year end is valued on a weighted average cost basis.
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.
Commodity purchase/sale open contracts (excluding futures contracts), where the value of the underlying commodity is determined by a quoted terminal market are classified as other financial assets/liabilities and measured at fair value net of distribution costs where fair value is the market price ruling at the balance sheet date.
Commodity futures and option contracts, and foreign exchange futures and option contracts associated with open commodity contracts, are classified as other financial assets/liabilities and measured at fair value where the fair value is the market price ruling at the balance sheet date.
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
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
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
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 arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the company's accounts. Deferred tax is provided in full, where material, on timing differences that result in an obligation to pay more (or less) tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 16 -
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:
2024
2023
£
£
Turnover analysed by class of business
Sale of grain
95,756,989
112,373,199
2024
2023
£
£
Turnover analysed by geographical market
UK
95,756,989
112,373,199
2024
2023
£
£
Other revenue
Interest income
115,648
-
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange (gains)/losses
28,493
Depreciation of owned tangible fixed assets
54
72
Amortisation of intangible assets
1,093
1,457
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,700
17,500
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 17 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
3
3
Permanent staff members
4
4
Temporay staff members
-
2
Total
7
9
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
802,179
1,188,983
Social security costs
110,701
165,537
Pension costs
25,000
94,859
937,880
1,449,379
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
509,244
837,412
Company pension contributions to defined contribution schemes
10,000
85,859
519,244
923,271
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
265,326
461,682
Accrued pension at the end of the year
10,000
35,859
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 18 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
110,896
302,086
Deferred tax
Origination and reversal of timing differences
17,465
(6,995)
Total tax charge
128,361
295,091
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:
2024
2023
£
£
Profit before taxation
512,294
1,429,741
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.00%)
128,074
300,246
Tax effect of expenses that are not deductible in determining taxable profit
273
306
Depreciation on assets not qualifying for tax allowances
14
72
Amount of deferred tax relating to timing difference
(5,533)
Taxation charge for the year
128,361
295,091
9
Intangible fixed assets
Software
£
Cost
At 1 August 2023 and 31 July 2024
32,755
Amortisation and impairment
At 1 August 2023
28,383
Amortisation charged for the year
1,093
At 31 July 2024
29,476
Carrying amount
At 31 July 2024
3,279
At 31 July 2023
4,372
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
10
Tangible fixed assets
Fixtures, fittings & equipment
£
Cost
At 1 August 2023 and 31 July 2024
8,873
Depreciation and impairment
At 1 August 2023
8,653
Depreciation charged in the year
54
At 31 July 2024
8,707
Carrying amount
At 31 July 2024
166
At 31 July 2023
220
11
Stocks
2024
2023
£
£
Raw materials and consumables
2,676,510
1,608,049
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
9,335,321
10,633,450
Other debtors
142,829
148,645
Prepayments and accrued income
1,369,638
329,396
10,847,788
11,111,491
Deferred tax asset (note 16)
6,250
23,715
10,854,038
11,135,206
13
Current asset investments
2024
2023
£
£
Unlisted investments
29,000
The balance relates to the fair value of commodity futures which is based on the market price ruling at the balance sheet date.
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 20 -
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
6,549,186
8,286,567
Corporation tax
111,066
302,086
Other taxation and social security
19,773
21,041
Other creditors
171,565
Accruals and deferred income
956,994
1,431,255
7,808,584
10,040,949
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 21 -
13
Related party transactions
The directors and shareholders are able to trade with the company on normal commercial terms in that grain is sold to the company at market rates.
The value of such contracts entered into during the year ended 31 July 2024 was £2,064,186 (2023: £2,450,050 ). At the balance sheet date the company owed £98,583 (2023: £207,381 ) to the directors.
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 22 -
16
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:
Assets
Assets
2024
2023
Balances:
£
£
Retirement benefit obligations
6,250
23,715
2024
Movements in the year:
£
Asset at 1 August 2023
(23,715)
Charge to profit or loss
17,465
Asset at 31 July 2024
(6,250)
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
25,000
94,859
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.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
14,000
14,400
14,000
14,400
19
Operating lease commitments
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:
2024
2023
£
£
Within one year
10,785
10,785
Between two and five years
4,494
15,279
15,279
26,064
NORTH HERTS FARMERS GRAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 23 -
20
Related party transactions
The directors and shareholders are able to trade with the company on normal commercial terms in that grain is sold to the company at market rates.
The value of such contracts entered into during the year ended 31 July 2024 was £2,064,186 (2023: £2,450,050 ). At the balance sheet date the company owed £98,583 (2023: £207,381 ) to the directors.
21
Financial commitments to forward contracts and futures contracts
At any given time the company has outstanding contracted commitments to purchase goods at a future date. Similarly the company also has outstanding contracted commitments to sell goods at a future date. The extent of these contracts varies depending on the activity in the wider market. The net effect of these positions is closely monitored by the directors to ensure the company minimises the risk of movements in global commodity prices.
22
Ultimate controlling party
In the directors' opinion the company is controlled by all of the directors acting in concert.
23
Cash (absorbed by)/generated from operations
2024
2023
£
£
Profit for the year after tax
383,933
1,134,650
Adjustments for:
Taxation charged
128,361
295,091
Investment income
(115,648)
Amortisation and impairment of intangible assets
1,093
1,457
Depreciation and impairment of tangible fixed assets
54
72
Movements in working capital:
(Increase)/decrease in stocks
(1,068,461)
557,936
Decrease in debtors
263,703
462,447
(Decrease)/increase in creditors
(2,041,345)
279,515
Cash (absorbed by)/generated from operations
(2,448,310)
2,731,168
24
Analysis of changes in net funds
1 August 2023
Cash flows
31 July 2024
£
£
£
Cash at bank and in hand
4,520,495
(2,814,528)
1,705,967
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