Rackham Group Ltd - Limited company accounts 16.3

REGISTERED NUMBER: 05388109 (England and Wales)

Directors' Report and

Audited Consolidated Financial Statements

for the Year Ended 31 December 2016

for

Rackham Group Ltd

Page

Company Information

1

Directors' Report

2

Report of the Independent Auditors

4

Consolidated Income Statement

6

Consolidated Balance Sheet

7

Company Balance Sheet

8

Consolidated Statement of Changes in Equity

9

Company Statement of Changes in Equity

10

Notes to the Consolidated Financial Statements

11

DIRECTORS:

S A Rackham

P A Rackham

S R Stuteley

P A Rackham Jnr

SECRETARY:

S R Stuteley

REGISTERED OFFICE:

Manor Farm

122 The Street

Bridgham

Norwich

Norfolk

NR16 2RX

REGISTERED NUMBER:

05388109 (England and Wales)

INDEPENDENT AUDITORS:

Knights Lowe Limited

Eldo House

Kempson Way

Suffolk Business Park

Bury St Edmunds

Suffolk

IP32 7AR

The directors present their report with the financial statements of the company and the group for the year ended

31 December 2016.

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of agriculture, property investment and

property dealing and development.

DIVIDENDS

Interim dividends were paid during the year on each class of share at different rates as follows:

Share class

Amount per share

"A"

£26.849

"B"

£16.775

"C"

£5.118

"D"

£4.192

In aggregate the amount paid during the year was £1,641,217 (2015: £463,068).

The directors do not propose a final dividend is paid (2015: nil).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2016 to the date of this

report.

S A Rackham

P A Rackham

S R Stuteley

P A Rackham Jnr

DIRECTORS' RESPONSIBILITIES STATEMENT

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), including Financial Reporting Standard

102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 group and of the profit or loss of the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group 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 the group and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies

Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to

have taken as a director in order to make himself or herself aware of any relevant audit information and to establish

that the group's auditors are aware of that information.

AUDITORS

The auditors, Knights Lowe Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

P A Rackham - Director

25 July 2017

We have audited the financial statements of Rackham Group Ltd for the year ended 31 December 2016 on pages six to

twenty four. The financial reporting framework that has been applied in their preparation is applicable law and United

Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial

Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

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 a Report of the Auditors 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.

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out on page two, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent

company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of

significant accounting estimates made by the directors; and the overall presentation of the financial statements. In

addition, we read all the financial and non-financial information in the Directors' Report to identify material

inconsistencies with the audited financial statements and to identify any information that is apparently materially

incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the

audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for

our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2016 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter 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 Directors' Report

for the financial year for which the financial statements are prepared is consistent with the financial statements, and

has been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding

of the group and the parent company and its environment, we have not identified any material misstatements in the

Directors' Report.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to

you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and 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 prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Group Strategic Report.

James Knights ACA BSc (Senior Statutory Auditor)

for and on behalf of Knights Lowe Limited

Eldo House

Kempson Way

Suffolk Business Park

Bury St Edmunds

Suffolk

IP32 7AR

1 August 2017

TURNOVER

3

7,479,160

8,234,020

Cost of sales

2,779,409

3,700,841

GROSS PROFIT

4,699,751

4,533,179

Administrative expenses

1,788,054

2,560,030

2,911,697

1,973,149

Other operating income

45

-

OPERATING PROFIT

5

2,911,742

1,973,149

Income from fixed asset investments

5,654

3,855

Interest receivable and similar income

6

68,244

21,269

73,898

25,124

2,985,640

1,998,273

Fair value adjustments to investments and investment property

7

17,768

(1,010,528

)

2,967,872

3,008,801

Interest payable and similar charges

8

425,447

374,718

PROFIT BEFORE TAXATION

2,542,425

2,634,083

Tax on profit

9

455,321

218,576

PROFIT FOR THE FINANCIAL YEAR

2,087,104

2,415,507

FIXED ASSETS

Intangible assets

12

(5,581,833

)

(5,424,385

)

Tangible assets

13

14,967,781

14,834,613

Investments

14

-

-

Investment property

15

9,202,350

9,251,664

18,588,298

18,661,892

CURRENT ASSETS

Stocks

16

9,905,148

10,801,416

Debtors

17

1,523,977

2,407,145

Investments

18

194,851

163,793

Cash at bank

1,470,297

544,881

13,094,273

13,917,235

CREDITORS

Amounts falling due within one year

19

1,636,526

1,819,622

NET CURRENT ASSETS

11,457,747

12,097,613

TOTAL ASSETS LESS CURRENT LIABILITIES

30,046,045

30,759,505

CREDITORS

Amounts falling due after more than one year

20

(7,110,945

)

(7,896,386

)

PROVISIONS FOR LIABILITIES

22

(558,344

)

(595,456

)

NET ASSETS

22,376,756

22,267,663

CAPITAL AND RESERVES

Called up share capital

23

113,776

113,776

Share premium

24

2,338,021

2,338,021

Fair value reserve

24

3,682,307

3,615,240

Retained earnings

24

15,202,379

14,919,380

SHAREHOLDERS' FUNDS

21,336,483

20,986,417

NON-CONTROLLING INTERESTS

1,040,273

1,281,246

TOTAL EQUITY

22,376,756

22,267,663

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006

relating to small companies.

The financial statements were approved by the Board of Directors on 25 July 2017 and were signed on its behalf by:

P A Rackham - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

2,463,567

2,463,567

Investment property

15

-

-

2,463,567

2,463,567

CREDITORS

Amounts falling due within one year

19

21,891

16,894

NET CURRENT LIABILITIES

(21,891

)

(16,894

)

TOTAL ASSETS LESS CURRENT LIABILITIES

2,441,676

2,446,673

CAPITAL AND RESERVES

Called up share capital

23

113,776

113,776

Share premium

2,338,021

2,338,021

Retained earnings

(10,121

)

(5,124

)

SHAREHOLDERS' FUNDS

2,441,676

2,446,673

Company's profit for the financial year

1,636,220

462,131

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

The financial statements were approved by the Board of Directors on 25 July 2017 and were signed on its behalf by:

P A Rackham - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2015

113,776

16,688,245

2,338,021

Changes in equity

Dividends

-

(498,262

)

-

Total comprehensive income

-

(1,270,603

)

-

Balance at 31 December 2015

113,776

14,919,380

2,338,021

As restated

113,776

14,919,380

2,338,021

Changes in equity

Dividends

-

(1,673,309

)

-

Total comprehensive income

-

1,956,308

-

Balance at 31 December 2016

113,776

15,202,379

2,338,021

Fair

value

Non-controlling

Total

reserve

Total

interests

equity

£

£

£

£

Balance at 1 January 2015

-

19,140,042

1,210,376

20,350,418

Changes in equity

Dividends

-

(498,262

)

-

(498,262

)

Total comprehensive income

3,615,240

2,344,637

70,870

2,415,507

Balance at 31 December 2015

3,615,240

20,986,417

1,281,246

22,267,663

Prior year adjustment

-

-

(304,702

)

(304,702

)

As restated

3,615,240

20,986,417

976,544

21,962,961

Changes in equity

Dividends

-

(1,673,309

)

-

(1,673,309

)

Total comprehensive income

67,067

2,023,375

63,729

2,087,104

Balance at 31 December 2016

3,682,307

21,336,483

1,040,273

22,376,756

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2015

113,776

(4,187

)

2,338,021

2,447,610

Changes in equity

Dividends

-

(463,068

)

-

(463,068

)

Total comprehensive income

-

462,131

-

462,131

Balance at 31 December 2015

113,776

(5,124

)

2,338,021

2,446,673

Changes in equity

Dividends

-

(1,641,217

)

-

(1,641,217

)

Total comprehensive income

-

1,636,220

-

1,636,220

Balance at 31 December 2016

113,776

(10,121

)

2,338,021

2,441,676

1.	STATUTORY INFORMATION

Rackham Group Ltd is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with the provisions of Section 1A "Small Entities"

of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of

Ireland" and the Companies Act 2006. There were no material departures from those standards. The financial

statements have been prepared under the historical cost convention as modified by the revaluation of certain

fixed assets.

Basis of consolidation

The consolidated financial statements incorporate the results of the Company and entities controlled by the

Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the

power to govern the financial and operating policies of the investee entity. Minority interest are accounted for

in accordance with section 9 of Financial Reporting Standard 102 whereby the results and net assets of an

investee are wholly consolidated and minority interests are disclosed on the profit and loss account and

balance sheet in proportion to the share of the equity held in the investee.

Upon acquisition, adjustments are made as required to subsidiaries financial statements so as to align

accounting policies with those of the Group. Goodwill is recognised and treated as stated below.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the

financial statements.

Significant judgements and estimates

In the application of the Group's accounting policies, which are described below, 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 estimated and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates

are recognised in the period in which the estimate is revised if revision affects only that and future periods.

The following are critical judgements including those involving estimations, that the directors have made in the

process of applying the Group's accounting policies and that have the most significant effect on the amounts

recognised in the financial statements.

Depreciation of tangible fixed assets - property, plant and machinery

Tangible fixed assets are recognised at cost and depreciated on the basis appropriate to charge to the profit

and loss the economic consumption of those assets during the accounting period. The charge is calculated as

described below and is based on the directors knowledge of the reduction in the residual value of trading assets

and estate property on average over the investment cycle of each class of asset. The rates of depreciation are

kept under review such that assets are written down to residual value at the end of the economic lives of the

assets.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be

measured based on quoted prices in active markets, their fair value is measured using valuation techniques

including the discounted cash flow model. The inputs to these models are taken from observable markets

where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.

Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

Revaluation of investment properties

The Group carries investment properties at fair value, with changes in fair value being recognised in the profit

or loss. The Directors have determined fair values on a property by property basis at open market value based

on assumptions on expected yield given the location and nature of the property comparable to other known

sales or potential sales in the region. Where considered appropriate, the directors seek formal or informal

valuations by land and estate agents.

Turnover

Turnover represents amounts receivable derived from the Group's ordinary activities, net of discounts and

excluding value added tax. Revenue is recognised as follows:

Rental and similar income is accrued on a time basis in the period to which it relates by reference to underlying

contracts.

Income from the sale of land and buildings is recognised at the date of unconditional exchange of contract.

Livestock and produce revenue is recognised at the point legal title to stock passes to the customer, normally at

collection or delivery.

Interest income is accrued on a time basis by reference to the underlying capital sum and applicable interest

rate.

Dividend income from investments is recognised at the date of receipt.

Goodwill

Goodwill arising on consolidation is included in the accounts based on the fair value of net assets of the

subsidiary acquired at the date of acquisition. Amortisation is charged over the estimated life of goodwill.

Negative goodwill is written back to the profit and loss account upon disposal of the underlying investment in

the subsidiary.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Publication rights are being amortised evenly over their estimated useful life of nil years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% straight line on buildings

Plant and machinery

-

5 years straight line

Fixtures and fittings

-

5 years straight line

Motor vehicles

-

4 years straight line

The directors estimate residual values on an asset by asset basis and apply depreciation accordingly. During the

year a full review has been made of estimated residual values of non-investment freehold property and the

directors consider that such values for all properties are likely to be at, or above, book value. Accordingly, no

depreciation has been charged during the year on freehold property. The position will be reviewed annually.

Investment property

Investment property held to earn rental income and/or capital appreciation is included in the balance sheet at

fair value where such value can be measured reliably without undue cost or effort on an ongoing basis. Fair

value adjustments are taken to the profit and loss account.The property is not depreciated which is a treatment

contrary to the Companies Act 2006 however in the opinion of the Directors the policy adopted by the

Company provides a true and fair view.

The majority of such properties are on the main farming estate and are thus difficult to independently value. In

accordance with Section 16 of FRS 102 such properties are accounted for under the principles applying to

property plant and equipment as described above.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and

slow moving items.

For stock properties, cost comprises the cost of acquisition of property, professional and planning fees and

construction and infrastructure costs, but excludes overheads. Net realisable value represents the estimated

selling price less all estimated costs of completion and costs to be incurred in marketing and selling the

properties.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income

Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal

of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that

they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those

held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance

leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital

element of the future payments is treated as a liability.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension

scheme are charged to profit or loss in the period to which they relate.

Derivative financial instruments

The company uses derivative financial instruments to reduce exposure to interest rate movements. The

company does not hold or issue derivative financial instruments for speculative reasons.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are

subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in

the profit and loss immediately unless the derivative is designated and effective as a hedging instrument, in

which event the timing of the recognition in the profit or loss depends on the nature of the hedge relationship.

The best evidence of fair value is quoted price for an identical asset in an active market. When quoted prices

are unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as

there has not been a significant change in economic circumstances or a significant lapse of time since the

transaction took place. If the market is not active and recent transactions of an identical asset on their own are

not a good estimate of fair value, the fair value is estimated by using a valuation technique.

Current asset investments

Investments comprise current asset investments which are originally recognised at cost. Where the fair value

can be reliably determined, the investments are subsequently stated at fair value at each balance sheet date

with change to values being recognised in the profit and loss account. Those current investments where fair

values cannot be reliably determined are stated at cost.

3.

TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the group.

An analysis of turnover by class of business is given below:

2016

2015

£

£

Farming income

2,462,092

1,864,626

Property development and sales

1,800,000

1,155,500

Other stock sales & work done

-

2,044,752

Letting and lease income

3,039,810

2,610,529

Other operating income

177,258

558,613

7,479,160

8,234,020

4.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 14 (2015 - 14 ) .

The average number of employees by undertakings that are proportionately consolidated during the year was 3

(2015 - 3 ) .

5.	OPERATING PROFIT

The operating profit is stated after charging:

2016

2015

£

£

Depreciation - owned assets

297,788

240,874

Depreciation - assets on hire purchase contracts

-

62,200

Publication rights amortisation

-

5,012

Audit fees for group companies

31,730

25,008

Taxation compliance services

2,000

-

Other non- audit services

9,874

12,014

6.

INTEREST RECEIVABLE AND SIMILAR INCOME

2016

2015

£

£

Deposit account interest

3,152

1,482

Bank account interest

55,388

-

Other interest receivable

9,704

19,787

68,244

21,269

7.

FAIR VALUE ADJUSTMENTS TO INVESTMENTS AND INVESTMENT PROPERTY

2016

2015

£

£

Fair value adjustments to investments and investment property

17,768

(1,010,528

)