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COMPANY REGISTRATION NUMBER: 09152445
FARMCARE TRADING LIMITED
FINANCIAL STATEMENTS
30 September 2024
FARMCARE TRADING LIMITED
FINANCIAL STATEMENTS
Year Ended 30 September 2024
CONTENTS
PAGE
Officers and professional advisers
1
Directors' report
2
Directors' responsibilities statement
4
Independent auditor's report to the members
5
Income statement
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13
FARMCARE TRADING LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
The board of directors
Robin Butler
Nigel Hugill
David Wood
Registered office
50 New Bond Street
London
England
W1S 1BJ
Auditor
BDO LLP
First Floor Franciscan House
51 Princes Street
Ipswich
Suffolk
United Kingdom
IP1 1UR
FARMCARE TRADING LIMITED
DIRECTORS' REPORT
Year Ended 30 September 2024
The directors present their report and the financial statements of the company for the year ended 30 September 2024 .
PRINCIPAL ACTIVITIES
The principal activity of the company is to contract cultivation of arable crops across its owned land portfolio through contract farm agreements and farm business tenancies .
DIRECTORS
The directors who served the company during the year were as follows:
Robin Butler
Nigel Hugill
David Wood
DIRECTORS' INSURANCE AND INDEMNITIES The parent undertaking has entered into qualifying third party indemnity arrangements for the benefit of the directors in a form and scope which comply with the requirements of the Companies Act 2006 and which were in force throughout the year and remain in force.
DIVIDENDS
Interim dividends of £ 100,000,000 have been paid for the year ended 30 September 2024 (2023: £5,000,000). The directors do not recommend the payment of a final dividend for the year ended 30 September 2024 (2023: £Nil). CHARITABLE DONATIONS The company made £189,000 of gift aid payments to the Wellcome Trust during the year (2023: £3,038,000).
AUDITOR
Each of the persons who is a director at the date of approval of this annual report confirms that: - so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and - the director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
SMALL COMPANY PROVISIONS
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies' exemption. The directors have taken advantage of the small company exemption from providing a strategic report under section 414B of the Companies Act 2006.
This report was approved by the board of directors on 23 May 2025 and signed on behalf of the board by:
David Wood
Director
FARMCARE TRADING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
Year Ended 30 September 2024
The directors are responsible for preparing the directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 judgments and accounting estimates that are reasonable and prudent; - 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.
FARMCARE TRADING LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FARMCARE TRADING LIMITED
Year Ended 30 September 2024
OPINION ON THE FINANCIAL STATEMENTS
In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 30 September 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 have audited the financial statements of Farmcare Trading Limited ("the company") for the year ended 30 September 2024 which comprise the income statement, the balance sheet, the statement of changes in equity and the 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. INDEPENDENCE 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.
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 financial statements, 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. 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.
OTHER COMPANIES ACT 2006 REPORTING
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Directors' report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
- the Directors' report has been prepared in accordance with applicable legal requirements.
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 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 the returns; or - certain disclosures of Directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit; or - the Directors were not entitled to take advantage of the small companies' exemptions in preparing the Directors' report and from the requirement to prepare a Strategic report.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the 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 or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Extent to which the audit was capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Non-compliance with laws and regulations Based on: - Our understanding of the Company and the industry in which it operates; - Discussion with management and those charged with governance; and - Obtaining an understanding of the Company's policies and procedures regarding compliance with laws and regulations. We considered the significant laws and regulations to be United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, the Companies Act 2006 and UK tax legislation. The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be health and safety legislation, environmental legislation and compliance with government grants. Our procedures in respect of the above included: - Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations; - Enquiry of those charged with governance for any instances of non-compliance with laws and regulations; - Review of financial statement disclosures and agreeing to supporting documentation; - Involvement of tax specialists in the audit; and - Review of legal expenditure accounts to understand the nature of expenditure incurred. Fraud We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included: - Enquiry with management and those charged with governance regarding any known or suspected instances of fraud. - Obtaining an understanding of the Company's policies and procedures relating to: - detecting and responding to the risks of fraud; and - internal controls established to mitigate risks related to fraud. AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (continued) - Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud. - Discussion amongst the engagement team as to how and where fraud might occur in the financial statements. - Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud. - Considering performance targets and the related financial statement areas impacted by these. Based on our risk assessment, we considered the areas most susceptible to fraud to be the posting of inappropriate journal entries to manipulate financial results; revenue recognition; and management bias in accounting estimates in relation to property valuations. Our procedures in respect of the above included: - Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation. - Substantive testing of revenue recognition; and - Assessing significant estimates made by management for bias including, but not limited to, property plant and equipment impairment review, investment property valuation and the estimation of intercompany debtor recoverability. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed 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 are to become aware of it. A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
USE OF OUR REPORT
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Tracey Keeble
(Senior Statutory Auditor)
For and on behalf of BDO LLP , statutory auditor
First Floor Franciscan House
51 Princes Street
Ipswich
Suffolk
United Kingdom
IP1 1UR
23 May 2025
BDO LLP is a limited liability partnership registered in England and Wales (with registered number: OC305127).
FARMCARE TRADING LIMITED
INCOME STATEMENT
Year Ended 30 September 2024
2024
2023
Note
£000
£000
REVENUE
5
3,522
9,481
Cost of sales
( 1,812)
( 8,138)
-------
-------
GROSS PROFIT
1,710
1,343
Administrative expenses
3,365
( 1,057)
Changes in fair value of investment properties
388
368
(Loss)/gain on disposal of investment property
(34)
(Loss)/gain on disposal of property, plant and equipment
( 12)
8,813
-------
-------
PROFIT BEFORE FINANCE AND TAXATION
6
5,451
9,433
Other interest receivable and similar income
35
19
-------
-------
PROFIT BEFORE TAXATION
5,486
9,452
Tax on profit
7
383
481
-------
-------
PROFIT FOR THE FINANCIAL YEAR AND TOTAL COMPREHENSIVE INCOME
5,869
9,933
-------
-------
All the activities of the company are from continuing operations.
The company has no other comprehensive income or expenses in the year or preceding year.
FARMCARE TRADING LIMITED
BALANCE SHEET
30 September 2024
2024
2023
Note
£000
£000
NON-CURRENT ASSETS
Property, plant and equipment
9
84,354
79,889
Investment Properties
10
12,603
12,150
--------
--------
96,957
92,039
CURRENT ASSETS
Stocks
11
1,055
1,533
Trade and other receivables
12
23,223
122,700
Cash at bank and in hand
314
2,646
--------
---------
24,592
126,879
CURRENT LIABILITIES
13
( 829)
( 3,495)
--------
---------
NET CURRENT ASSETS
23,763
123,384
---------
---------
TOTAL ASSETS LESS CURRENT LIABILITIES
120,720
215,423
PROVISIONS
14
( 189)
( 572)
---------
---------
NET ASSETS
120,531
214,851
---------
---------
CAPITAL AND RESERVES
Called up share capital
16
Profit and loss account
120,531
214,851
---------
---------
SHAREHOLDERS FUNDS
120,531
214,851
---------
---------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime.
These financial statements were approved by the board of directors and authorised for issue on 23 May 2025 , and are signed on behalf of the board by:
David Wood
Director
Company registration number: 09152445
FARMCARE TRADING LIMITED
STATEMENT OF CHANGES IN EQUITY
Year Ended 30 September 2024
Profit and loss account
£000
AT 1 OCTOBER 2022
212,956
Profit for the year
9,933
---------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
9,933
Dividends paid and payable
8
( 5,000)
Gift Aid
( 3,038)
---------
AT 30 SEPTEMBER 2023
214,851
---------
Profit for the year
5,869
---------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
5,869
Dividends paid and payable
8
( 100,000)
Gift Aid
( 189)
---------
AT 30 SEPTEMBER 2024
120,531
---------
FARMCARE TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Year Ended 30 September 2024
1. GENERAL INFORMATION
The Company is a private company limited by share capital incorporated and domiciled in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The nature of the Company's operations are set out on page 2. The address of the registered office is: 50 New Bond Street, London, W1S 1BJ.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006.
3. ACCOUNTING POLICIES
Basis of preparation
The functional and presentational currency of these financial statements is UK sterling. The financial statements have been prepared in accordance with Financial Reporting Standard 102 (FRS 102), the Financial Reporting Standard applicable in the United Kingdom issued by the Financial Reporting Council. Measurement convention The financial statements are prepared on the historical cost basis except for biological assets and investment properties which are stated at their fair value. The accounting policy notes give further details.
Going concern
The Company operates in the agricultural industry, which can be significantly affected by market demand and climatic factors. This can cause uncertainty over the timing of the conversion of inventory into sales, and also the quantum of inventory which is available for conversion into sales. In order to ensure that the Company can meet its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements, the board has considered cash flow forecasts for this period, ensuring that these have been appropriately prepared and based on reasonable assumptions. The directors are satisfied that the Company has sufficient resources to operate for at least 12 months from the date of signing the balance sheet. The Company had a year end cash balance of £314,000 (2023: £2,646,000) and net current assets of £23,763,000 (2023: £123,384,000) at the same date. The company had a year end receivable balance of £21,599,000 (2023: £119,469,000) due from Urban&Civic Central Funding Limited, a fellow subsidiary within the Urban&Civic plc group. This company has received a letter of support from Urban&Civic plc and therefore the directors are satisfied that this debtor is recoverable. Cash flow forecasts indicate that current cash reserves are adequate for the requirements of the Company over the course of the forthcoming year. The directors are satisfied with the continued adoption of the going concern basis for the preparation of the financial statements.
Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": - the requirements of Section 7 Statement of Cash Flows and the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); - the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); - the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; - the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Urban&Civic plc as at 30 September 2024 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
Freehold property
-
5-50 years
Plant and machinery
-
3-20 years
Motor vehicles
-
3-5 years
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date .
Investment properties
Investment properties are properties held for long-term rental income and/or for capital appreciation and are measured initially at cost, including related transaction costs, and subsequently held at fair value. Changes in fair value of an investment property at the balance sheet date and its carrying amount prior to remeasurement are recorded in the income statement.
Biological assets
Crops before the point of harvest are classified as biological assets. All biological assets are held at fair value less estimated selling costs. The estimate of net fair value of crops is based on the historical cost until sufficient biological transformation has taken place to indicate that cost is no longer equal to net fair value. Thereafter the fair value is based on a discounted cash flow model applied to expected crop yield using the estimated market values less estimated selling costs. The point at which sufficient biological transformation has taken place requires the use of estimates. Different assumptions around the growth patterns could cause the recorded net fair value of biological assets to differ. The Company is of the opinion that where little biological transformation has occurred then cost equates to net fair value. A gain or loss arising on initial recognition of a biological asset at net fair value is included in profit or loss for the period in which it arises.
Impairment
The carrying value of the Company's assets, other than biological assets and investment properties, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets' recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement within administration expenses. The recoverable amount of the Company's assets is the greater of their net selling price 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. In respect of these assets, an impairment loss is reversed if there has been a change in the estimates based on an event subsequent to the initial impairment used to determine the recoverable amount. A reversal of an impairment loss is recognised in the income statement within administrative expenses. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Inventories
Crops in store are stated at lower of deemed cost and net realisable value. The deemed cost of crops in store is measured at its fair value less estimated selling costs at point of harvest. Net realisable value represents the estimated selling price less all estimated costs of completion. Other inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price less all estimated costs of completion.
Revenue recognition
Revenue represents the amounts (excluding value added tax) derived from the provision of goods and services to customers during the period. Rental income from the rental of properties within the Company's portfolio, together with receipts of government grants, and other operating income (including income from the rental of potato boxes) are also included within revenue.
All revenue from the provision of goods or services is recognised as ownership of goods transfers or as services are performed. All revenue from the provision of goods relates to the sale of crops. All crops are sold under contract and the Company recognises revenue when it transfers risks and rewards of the goods to a customer. Transfer of risks and rewards is determined when the crops are received and accepted by the customer in fulfilment of the performance obligations.
Revenue from government grants is accrued equally over the course of the period to which the grants relate. Rental and other operating income are recognised over the period to which the letting relates, and as work is performed.
Rental and other property income arising from property is accounted for on a straight line basis over the term of the lease.
Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards of ownership. Leases not transferring substantially all the risks and rewards of ownership are classified as operating leases. Rental income paid under or received from operating leases is recognised in the consolidated statement of comprehensive income on a straight -line basis over the term of the relevant lease. All lessee arrangements have been determined as constituting operating leases.
Taxation
Tax on the profit or loss for the period comprises current and deferred tax.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the balance sheet and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
Financial assets and financial liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. The company only enters into basic financial instrument transactions, being the selling of produce or the provision of services that result in the recognition of financial assets and liabilities such as the recognition of trade and other accounts receivable and payable.
Government grants
Conditional government grants are recognised in the income statement only when the conditions have been met and there is reasonable assurance that the grant will be received.
Farmcare receives conditional government grants for two main purposes. The Basic Payment Scheme supports all farming businesses based on the area of agricultural land occupied for farming and Environmental Stewardship Schemes support specific land uses for the protection of the environment and improving habitats.
Foreign currency translation
Transactions in foreign currencies are initially recorded at the rates of exchange that are prevailing on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates prevailing at the balance sheet date. Exchange differences arising on the settlement of monetary assets and liabilities, and on the translation of monetary items at the balance sheet date are included in the income statement for the period.
Fair value measurement
'Fair value' is the amount for which an asset could be exchanged, a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing parties in an arm’s length transaction.
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
- A: the best evidence of fair value is a quoted price for an identical asset (or similar asset) in an active market. This is usually the current bid price.
- B: When quoted prices are unavailable, the price in a binding sale agreement or a recent transaction for an identical asset (or similar asset) in an arm’s length transaction between knowledgeable, willing parties provides evidence of fair value. However, this price may not be a good estimate of fair value if there has been a significant change in economic circumstances or a significant period of time between the date of the binding sale agreement or the transaction, and the measurement date. If the entity can demonstrate that the last transaction price is not a good estimate of fair value (eg because it reflects the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distress sale), that price is adjusted.
- C: If the market for the asset is not active and any binding sale agreements or recent transactions for an identical asset (or similar asset) on their own are not a good estimate of fair value, an entity estimates the fair value by using another valuation technique. The objective of using another valuation technique is to estimate what the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal business considerations.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the company's accounting policies, which are described in note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical accounting judgements
Distinction between investment properties and property, plant and equipment
Where there is a strategic decision taken to develop any element of an investment property for sale rather than hold for investment purposes, then that element is remeasured to fair value at the decision date and transferred to property, plant and equipment. Where there is a strategic decision taken to hold any element of property, plant and equipment for long-term capital growth or income, then that element is transferred to investment properties at cost and subsequently held at fair value.
Key sources of estimation uncertainty
Impairment of non-current assets to include property, plant and equipment and valuation of investment property
Management review the valuation of the Company's land portfolio by way of regular market valuations that are carried out by a third party advisor. The best evidence of market value is normally given by current prices or an active market for similar property in the same location and condition subject to a similar lease and other contracts. Market value is defined as the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
During the year the directors instructed Strutt & Parker to carry out a valuation of the Company's property in accordance with the RICS guidelines. One of the Estates was marketed for sale during the year, and whilst offers were received, the estate was withdrawn from sale in September 2024. With the offers received forming the basis of the valuation for this site, other factors including the rural investment estate market as a whole and the strategic development potential are also considered when determining the market value. In respect of land included within property, plant and equipment (freehold property), the valuations identified a reversal of previous impairment charges of £4,730,000 (2023-nil), along with an impairment charge arising on land of £118,000 (2023-£48,000). The valuation of the Company's property is inherently subjective and other valuations could lead to a materially different charge. Please refer to note 9 in relation to the carrying amount of fixed assets and note 10 in in relation to investment property valuations.
Debtor recoverability
In order to determine whether debtors are recoverable, including determining whether intercompany debtors balances are recoverable, consideration is made of any objective evidence of impairment of any financial assets that are measured at cost or amortised cost. This includes observable data that come to the attention of the Company or other factors which may also be evidence of impairment, including significant
changes with an adverse effect that have taken place in the technological, market, economic or legal environment in respect of that financial asset. Consideration is also made taking into account of factors such as payment history, and management's knowledge of their customer base and their financial position. Please refer to note 12 in relation to the carrying amount of debtors.
Tangible property, plant and equipment
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Please refer to note 9 in relation to the carrying amount of fixed assets.
5. REVENUE
Revenue arises from:
2024
2023
£000
£000
Sale of crops
1,346
7,428
Grants
568
285
Rental income
1,530
1,750
Other operating income
78
18
-------
-------
3,522
9,481
-------
-------
The Company has two (2023: three) key customers that account for in excess of 10% of the revenue of the Company. Revenue from these customers amounts to 38% (2023: 77%) of the revenue for the year. Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received. The Company receives conditional government grants for two main purposes. Delinked payments (previously the Basic Payment Scheme) supports all farming businesses based on the area of agricultural land occupied for farming and Environmental Stewardship Schemes support specific land uses for the protection of the environment and improving habitats. The Basic Payment Scheme ended in 2023 and delinked payments will be received each year from 2024 to 2027 when the scheme will end.
The whole of the revenue is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
6. PROFIT BEFORE FINANCE AND TAXATION
Profit before finance and taxation is stated after charging/(crediting):
2024
2023
£000
£000
Depreciation of property, plant and equipment
218
213
Impairment of property, plant and equipment recognised in:
Administrative expenses
118
48
Reversal of impairment of property, plant and equipment recognised in:
Administrative expenses
(4,730)
Loss on disposal of investment property
34
Fair value adjustments to investment property
( 388)
( 368)
Operating lease rentals
2
14
Government grants in turnover
(568)
(285)
Loss/(gain) on disposal of property, plant and equipment
12
(8,813)
Cost of stocks expensed
432
767
Impairment of receivables
(49)
(164)
-------
-------
Auditor's remuneration consisted of £75,000 (2023: £81,000) in respect of the audit of the financial statements in the year. There were no non-audit services.
7. TAX ON PROFIT
Major components of tax income
2024
2023
£000
£000
Deferred tax:
Origination and reversal of timing differences
( 383)
( 481)
----
----
Tax on profit
( 383)
( 481)
----
----
No provision for tax has been made in respect of those profits where there is an intention to Gift Aid such profits to the Wellcome Trust. In respect of the year to 30 September 2024 anticipated Gift Aid payments amount to £nil (2023: £189,000).
Reconciliation of tax income
The tax assessed on the profit on ordinary activities for the year varies from the standard rate of corporation tax in the UK of 25 % (2023: 22 %).
2024
2023
£000
£000
Profit on ordinary activities before taxation
5,486
9,452
-------
-------
Profit on ordinary activities multiplied by rate of tax
1,372
2,079
Effect of items not deductible for tax purposes
45
( 23)
Group relief
(235)
(125)
Deferred tax
(383)
(481)
Fixed asset differences and investment property gains not taxable
(1,182)
(2,295)
Losses brought forward utilised
364
-------
-------
Tax on profit
( 383)
( 481)
-------
-------
No reversal of deferred tax assets is expected during the year beginning after this reporting period. Deferred tax liabilities are dependent on year end investment property valuations. There is no expiry date in respect of timing differences, unused tax loss and unused tax credits.
8. DIVIDENDS
2024
2023
£000
£000
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
100,000
5,000
---------
-------
Interim dividends of £100,000,000 have been paid for the year ended 30 September 2024 (2023: £5,000,000). The directors do not recommend the payment of a final dividend for the year ended 30 September 2024 (2023: £Nil).
9. PROPERTY, PLANT AND EQUIPMENT
Freehold property
Plant and machinery
Total
£000
£000
£000
Cost
At 1 October 2023
85,931
2,053
87,984
Additions
294
24
318
Disposals
( 363)
( 1,247)
( 1,610)
--------
-------
--------
At 30 September 2024
85,862
830
86,692
--------
-------
--------
Depreciation
At 1 October 2023
6,168
1,927
8,095
Charge for the year
183
35
218
Disposals
( 91)
( 1,247)
( 1,338)
Transfers
(26)
(26)
Reversal of impairment losses
(4,611)
(4,611)
--------
-------
--------
At 30 September 2024
1,623
715
2,338
--------
-------
--------
Carrying amount
At 30 September 2024
84,239
115
84,354
--------
-------
--------
At 30 September 2023
79,763
126
79,889
--------
-------
--------
10. INVESTMENT PROPERTIES
£000
Valuation
At 1 October 2023
12,150
Additions at cost
65
Revaluations
388
--------
At 30 September 2024
12,603
--------
Impairment
At 1 October 2023 and 30 September 2024
--------
Carrying amount
At 30 September 2024
12,603
--------
At 30 September 2023
12,150
--------
Investment property comprises a number of commercial and residential properties that are leased to third parties. Property rental income for the year amounted to £503,986 (2023: £455,128). Direct operating expenses arising on investment property amounted to £311,795 (2023: £186,036).
For all investment properties in the current year, a valuation at year end was carried out by Strutt and Parker, an independent firm of chartered surveyors. Valuations are carried out in accordance with guidance issued by the Royal Institution of Chartered Surveyors. Properties have been valued at fair value. The fair value measurement for all of the investment properties uses significant inputs which were based on the observable market data. The best evidence of fair value is normally given by current prices or an active market for similar property in the same location and condition subject to a similar lease and other contracts. Comparable transactions are analysed to determine the value of agricultural and residential elements of the property and the discount rate at which income commercial and renewable energy lettings is capitalised. The key significant unobservable inputs in relation to these valuations are the agricultural land value which amounted to £7,500 - £11,000 per acre. The fair value of investment property at the year end amounted to £12,602,950 (2023: £12,149,950).
The historical cost of investment properties as at 30 September 2024 was £8,895,778 (2023: £8,831,019).
11. STOCKS
2024
2023
£000
£000
Raw materials and consumables
208
210
Crops in store
680
1,076
Biological assets
167
247
-------
-------
1,055
1,533
-------
-------
Current biological assets relates to growing crops.
2024
2023
£000
£000
At 1 October 2023
247
805
Purchases
432
1,206
Gain/(loss) arising from changes in fair value
431
(198)
Decrease due to harvest
(943)
(1,566)
----
-------
As at 30 September 2024
167
247
----
-------
Measurement of fair values
The fair value measurements for the crops are based on the observable market prices at year end in accordance with HMRC's Business Income Manual 55410 - Farming: stock valuation: General Principles Helpsheet 232 (BIM 55410) and the Central Association of Agricultural Valuers "Guidance Notes on Agricultural Stock Valuations for Tax Purposes".
12. TRADE AND OTHER RECEIVABLES
2024
2023
£000
£000
Trade receivables
120
58
Amounts owed by group undertakings
21,599
119,469
Prepayments and accrued income
330
635
Other debtors
1,174
2,538
--------
---------
23,223
122,700
--------
---------
Trade receivables are stated net of a bad debt provision of £114,639 (2023: £163,578). Any adjustment to the level of provision is recognised within the income statement in operating profit.
13. CURRENT LIABILITIES
2024
2023
£000
£000
Trade creditors
208
3,045
Accruals and deferred income
621
450
----
-------
829
3,495
----
-------
14. PROVISIONS
Deferred tax (note 15)
£000
At 1 October 2023
572
Charge against provision
( 383)
----
At 30 September 2024
189
----
15. DEFERRED TAX
The deferred tax included in the balance sheet is as follows:
2024
2023
£000
£000
Included in provisions (note 14)
189
572
----
----
The deferred tax liability in the current and prior year relates to latent gains on investment property and freehold land and buildings of £4,329,583 and is dependent on year end valuations. These are offset against capital losses of £3,574,432, which are available to carry forward indefinitely, and are expected to be utilised as profits are realised on the disposal of properties mentioned above. No disposals are anticipated in the next 12 months, and the liability is therefore not expected to reverse in the short term.
16. CALLED UP SHARE CAPITAL
Issued, called up and fully paid
2024
2023
No.
£000
No.
£000
Ordinary shares of £ 1 each
1
1
----
----
----
----
The holder of the ordinary share is entitled to receive dividends as declared from time to time and is entitled to one vote per share at meetings of the Company (2023: 1 Ordinary share of £1). The ordinary share holder has full rights to participate in any distribution (including on a dividend and on winding up). The ordinary share is not redeemable.
17. OPERATING LEASES
As lessor
The total future minimum lease payments receivable under non-cancellable operating leases are as follows:
2024
2023
£000
£000
Not later than 1 year
1,252
1,086
Later than 1 year and not later than 5 years
1,605
2,501
Later than 5 years
895
667
-------
-------
3,752
4,254
-------
-------
The Company leases out its investment property. The Company has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Within the above lease income there is an element that is variable. This relates to mineral extraction leases and the income is dependent on the amount of minerals extracted in tonnes. During the year £ 59,435 (2023: £ 109,666 ) was earned as rental income in relation to this variable element. The total future variable lease payments receivable in relation to the leases mentioned above are as follows:
2024 2023
£000 £000
Not later than 1 year 429 101
Later than 1 year and not later than 5 years 741 1,113
Later than 5 years 21
------- -------
1,170 1,236
------- -------
18. CONTINGENCIES
Capital commitments contracted but not provided for in the financial statements are £Nil (2023 : £99,000).
19. RELATED PARTY TRANSACTIONS
Gift aid of £189,000 (2023: £3,038,000) was paid to the Wellcome Trust in the year.
20. ULTIMATE PARENT UNDERTAKING
The company's immediate controlling undertaking is Urban&Civic Group Limited, a company incorporated in England and Wales . The ultimate parent undertaking of the company is the Wellcome Trust, exercising control through its corporate trustee, The Wellcome Trust Limited. The largest Group which consolidate the results of the Company are those of the Urban&Civic plc. The results of Urban&Civic plc are not consolidated at a higher level. The Wellcome Trust holds a portfolio of investments, which are accounted for at fair value through profit or loss in its financial statements. Copies of the Wellcome Trust Annual Report and Financial Statements are available from Wellcome Trust's website (www.wellcome.org/news-and-reports/reports).
21. RESERVES
The Company's reserves are as follows:
Share capital - This reserve represents the nominal value of shares issued.
Profit and loss account - This reserve represents the accumulated profits and losses, less dividends and other adjustments.