MoleMole ValleyValley Farmers Annual Report and and Accounts 20152015 Farmers Annual Report Accounts

annual report and accounts

2015

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Mole Valley Farmers Annual Report and Accounts 2015

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Front cover: Exmoor views

Mole Valley Farmers Annual Report and Accounts 2015

Board of Directors and Company Advisors

Contents

REGISTERED OFFICE

AUDITOR

Board of directors and company advisors

Exmoor House Lime Way Pathfields Business Park South Molton Devon EX36 3LH

KPMG LLP 100 Temple Street Bristol BS1 6AG

COMPANY NUMBER

BANKERS

England No. 679848

Lloyds Banking Group 17 Cross Street Barnstaple North Devon EX31 1BE

DIRECTORS G M Cock, Chairman P J Delbridge S A Edmunds F B Jennings T M P Wall G E Wellwood P G Winstone S Bone

CHIEF EXECUTIVE OFFICER A Jackson

COMPANY SECRETARY

LEGAL ADVISORS Foot Anstey LLP Salt Quay House 4 North East Quay Sutton Harbour Plymouth PL4 0BN

Strategic report

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Report of the directors

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Statement of directors’ responsibilities

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Independent auditor’s report to the members of Mole Valley Farmers Ltd

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Consolidated profit and loss account

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Consolidated balance sheet

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Company balance sheet

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Group cash flow statement

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Notes to the financial statements Notice of 55th Annual General Meeting

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Michelmores LLP Woodwater House Pynes Hill Exeter EX2 5WR

A G Chapple BSc (Hons), ACA

Exmoor House, South Molton 3

Mole Valley Farmers Annual Report and Accounts 2015

Strategic report - Chairman’s review Overview The financial year ending 30th September 2015 has again been, on balance, a reasonable one for Mole Valley Farmers. I mentioned in last year’s report this year could potentially be one of the most challenging periods for a very long time and this has proved to be the case. From an agricultural perspective, it has become, and continues to be, one of the most difficult trading cycles in recent years for many farmers and farming businesses. Farm gate prices for a number of products have suffered from significant price reductions which are, in turn, featuring highly in discretionary spending habits. Cashflow and headroom in banking facilities are the main priorities for a number of people currently whilst a small percentage of dairy producers on stronger retail aligned contracts may not suffer these pressures. The view would generally be that milk prices have probably bottomed, although there are absolutely no guarantees that this is the case. However, the overriding thought is that farm gate prices may start to improve in summer/ autumn 2016, which in turn suggests the tough trading period is set to continue for most of the 2015/16 trading year. The very positive element of the 2014/15 trading result is that Mole Valley Farmers has managed to maintain a top line performance comparable to last year at £422m. This still represents like-for-like annual growth of around 8%; a good result when considering the not insignificant deflationary impact on the business, which equates to around £35m. Strong trading, strengthened by the continued support of Farmer Shareholders, members and customers, has in line with previous years, been a significant contributory factor to achieving this result. Again, Farmer Shareholder numbers have grown in the year to 8,313. The bottom line, however, shows the profit before taxation level at £1.1m whilst gearing has increased slightly to 37.8% from 31% last year. This has been impacted by the investments in a number of key business initiatives and requirements which are part way through completion; these include the implementation of the Microsoft Dynamics AX product across the whole business and

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the development of the feed business in the northern part of our trading geography now including Scotland, assisted by the opening of the new mill in the summer of 2015. This project was slightly delayed from the spring following delays due to lengthy planning considerations. Despite the lower bottom line result, a healthy EBITDA of around £6.8m has been achieved reflecting the continued investments made in the business. In the year the amalgamation of the Lillico Atlee feed business into the Mole Valley Farmers business was completed. Also a new Farm Direct site in Evercreech, Somerset opened under the long established Cox and Robinson brand.

Farmer Shareholder Farmer Shareholders are becoming increasingly aware of the benefits that the business has to offer. This year, the total savings to Farmer Shareholders are again well in excess of £1m. The greater understanding as to the value the business delivers on a daily basis has been particularly strong. Some of the Mole Valley Plus offerings, in particular fuel and vehicle purchases, have resulted in noticeable savings and member benefits. The Mole Insurance offering has grown and continues to reward members and customers; first hand examples of 10-20% in premium reductions are common. Double Discount events at branches have again benefited Farmer Shareholders. These extra savings coupled with the lower profit level, have led to the decision not to distribute additional member benefits through the voucher scheme as we have previously. This has always been a Board decision and as the Farmer Shareholder benefits package has evolved and developed, the voucher scheme has increasingly become a smaller element of the total Farmer Shareholder package. The commitment to develop areas where the business can add value back to its Farmer Shareholders and members has never been stronger, despite the challenging trading period we are encountering. Farmers and members wish to engage with the business through ongoing dialog, looking to understand the value available through the uniqueness of a farmer-owned business.

Strategy The commitment continues to building a business that evolves, competes and delivers on its core competencies. As the inevitable industry consolidation remains, the growth of Mole Valley Farmers is an essential component of being able to deliver on its objectives. The implementation of Microsoft Dynamics AX will ultimately deliver operational efficiencies, improved customer service and greater choice in how and when members and customers choose to transact business with us. This project is due to be completed in 2017. The fantastic new mill facility at Coylton near Ayr now gives the business increased coverage of the UK, in conjunction with the other partners who work with us, to help meet the strong demand for ruminant feed in the larger trading area. The business will continue to develop a number of initiatives including Molecare and Mole Insurance, whilst looking to challenge areas of the business which deliver returns below expectation. The vision to further build a genuinely farmer-owned business is ongoing. Exploring opportunities to finance growth is an area which will require careful consideration being mindful of our structure and constitution. Strategic discussions with the Board and the Executive team will help the business deliver its objectives. The ability to adapt and innovate is likely to be an important factor in conjunction with exploiting competitive advantage.

Conclusion

Again this year, we have benefited greatly from the significant support of all the stakeholders. Many team members across the business have worked hard to help facilitate continued success. A significant number of members and customers also support the business in high transactional activity and large feed volumes which enable the Board and the Management team to deliver on its objectives. Thank you to everyone for the continued support which is the lifeblood in allowing the business to grow and fulfil its objectives well into the future.

Mole Valley Farmers Annual Report and Accounts 2015

Chief Executive’s Review

Our trading result this year has been influenced by two main considerations: an agricultural industry that has been in a real state of flux attributed to plummeting farm gate prices and a retail sector that seemed unhurried to show stronger signs of recovery. Hence, endeavouring to progress our core business, agricultural requisites and rural retailing, has been extremely challenging as our farming customers have been subjected, in some cases, to extreme adversity and market uncertainty, which understandably affected confidence and subsequently purchasing behaviours. Not unsurprisingly, these elements have adversely affected our overall trading performance and compressed anticipated results. All in all, a year where our underlying profitability has reduced noticeably from the previous year, but where very positive compensatory growth has been sustained by remaining committed to advancing and maintaining a strong competitive pricing lead for agricultural inputs and rural supplies. Clearly, as the trading year advanced and the pressure on farm gate prices showed little sign of abating, notably within the milk and cereal sector, justifiably, it became more obvious of the self-imposed controls being placed on discretionary farm spending. In addition lower fuel, feed ingredients and raw material costs, combined with increased supply chain competition, led to a deflationary environment and margin attrition in a number of important product areas and for these reasons we became more expectant of the potential for a significant reduction in profitability come the year-end. Nevertheless, by endeavouring to maintain a strong competitive offering and continuing to place

greater emphasis on differentiation across our rural stores and farm services, reassuringly we did experience some strong growth in several product categories resulting in like-for-like customer transaction increasing over the previous year, which under the circumstances was no mean achievement. This has resulted in overall revenues being maintained in very difficult trading circumstances which we estimate deflation alone in the year would have equated to a like-for-like revenue reduction circa £35m, approximately 8%. It is regrettable that this year due to the decrease in profitability the company is not in a position to distribute a rebate, but if you’re an active farmer shareholder you can be assured that significant purchasing savings have again featured throughout the year in general procurement, veterinary, nutrition and a relatively new category, vehicles, which unaccompanied provided a total member saving approaching £800,000. The composition of the company first and foremost is about making sure that our commercial endeavours create a competitive arena for agricultural inputs; it is also about providing a range of unrestricted, non-chargeable, addedvalue services that, where appropriate, help farmers improve productivity, profitability and overall farm efficiency. It’s at times like this that our values and sense of purpose are as important as ever in trying to help the farming community whilst they remain predisposed to an uncertain outlook.

Financial and Administration Review With the continued support of members and the efforts of staff across the business as already mentioned, overall revenues for the year ending 30th September 2015, in spite of all the challenges, remained comparable to the previous year at £422.1m which is a hearty result. Overall gross margin showed a negligible increase to 14.65% in the year in line with projections and again reinforces that we remain resolute on providing competitive pricing advantages where appropriate. Overheads have been well managed and, as projected, have increased in accordance with decisions taken in the previous year in order to continue investing and advancing

core business development for the future. This year’s profit on ordinary activities before taxation has reduced to £1.1m which in the main can be attributed to returns being lower than expected due to tough trading conditions, margin erosion and committed investment development. The solidity of the balance sheet remains robust with net assets of £46.5m and net current assets increasing to nearly £20m. During the year all long term loans were repaid and replaced with two new medium term loans, one fixed and one variable rate options; business gearing remains at a practical level of 37.8%. Whilst being cautious, the business has continued to invest prudently with cash flow expenditure on fixed assets in the year totalling £6.3m. This has included the upgrading of some stores, manufacturing facilities and the replacement of some bulker lorries within our agri business. To improve operational efficiencies and extend a wider product offering, the final phase of rebranding SCATS Countrystores to ‘Mole Country Stores’ was completed in the year and now consists of 37 stores all of which operate as a division of Mole Valley Farmers Limited. In concurrence with last year, further investment was already committed for the ongoing incorporation of a new IT system called Microsoft Dynamics AX. This is a significant company-wide initiative which when completed will have replaced a number of dated legacy systems which have evolved over the years. The application of this fully integrated system will allow enhanced efficiencies to be introduced right across the company including a much better business to customer interface. Furthermore, the investment will provide a more robust set of disaster recovery processes to minimise risk to the company in the event of unforeseen events. In addition we have introduced new wireless hardware in a number of retail outlets which has allowed us to offer customers free WiFi services whilst they are in store. As part of our continued plan to invest in staff and succession planning, through the year we recruited a group of graduates to participate in our agricultural programme and also a number of apprentices. Pleasingly, in February the company successfully retained its Investors in People accreditation which

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Mole Valley Farmers Annual Report and Accounts 2015 we have now held for 12 consecutive years. The assessors implied that the business was people centric and had adopted some excellent practices against a national criteria. Planning for succession and resilient business continuity is something we take very seriously, having the right calibre of staff on hand ready to succeed experienced staff coming to the end of their careers is a must. We aspire to be a preferred supplier of choice and therefore we must ensure our standards, knowledge and service procedures are more dependable in order to meet with our customers’ growing expectations of the company.

into the future. In this respect, it is satisfying to report that recent investments in our production facilities are already assisting in realising some meaningful enhancements that we believe are benefitting the company and our feed customers alike and have aided our agricultural teams this year to achieve a commendable result in very difficult circumstances. It is pleasing to acknowledge some very positive underlying volume growth that has been achieved from sustained investment planning, improvements in distribution, logistics and some re-organisation of our wider on-farm services.

Agriculture

Through the course of the year we have continued to invest in our production infrastructure with a view to seeking greater efficiency at all production sites. This, we believe, will ensure we realise lower energy costs, increased productivity, enhancements in quality and greater flexibility leading to better utilisation of transport. We have also been working with an established family business and new business partner in Ayr in the construction of a new state of the art feed mill which was commissioned during the summer and is now producing quality compounds and speciality blends for distribution throughout South West Scotland and North West England. This new facility with an extensive infrastructure already in place, has the potential to offer a wider range of farm inputs to the farming community at some point in the future.

For our Agricultural business, practically, the ‘perfect storm’ ensued as virtually all our farming customers at some point during the year would have had to come to terms with falling farm-gate prices. For sure, global volatility and currency fluctuations have made it extremely difficult for many farming enterprises, leaving them with few options other than to take remedial action to reduce costs and prioritise operational efficiencies, particularly in the dairy sector. Whilst many farming businesses may have experienced a reduction in income, probably, the sector affected the most was dairy; this was due to world milk markets being in over-supply relating to reduced demand in Asia and the Russian trade embargo, all of which influenced a substantial downward trend in world milk price that understandably in the UK reduced demand for several classifications of key farm inputs. These dynamics, in conjunction with wheat prices trading below £100 per tonne, a beef sector that had barely recovered from previous price reductions and a lamb industry challenged by the strength of sterling, made for quite a year for our farming industry and our farming customers. In recent years, our wider feed business has had to adapt to the variants that now seem to persistently influence the supply for farm commodities. We have responded by ensuring we have a more multipurpose approach to manufacturing and advising on feed usage as a result of differing supply chain considerations that each year seem to have a greater bearing on farm production and our underlying results, particularly in the ruminant sector. It now seems the norm to be continually watchful of how changing market dynamics frequently impact on food production and consumption and how these deviations persistently influence the supply and demand of feed ingredients and world prices for farm commodities. In more recent years, by adopting a more disciplined approach and improving our capability, the underlying performance of our agricultural business, manufacturing, procurement, logistics, feed ingredients, supplements and sales has advanced progressively. Our strategy during 2015 despite all the external influence has not deviated from the outset; we have continued to challenge our operational practices and, where relevant, advance the proficiency of our feed business. We have continued to invest by concentrating on the central requirements of our manufacturing infrastructure that we believe needs to provide a sustainable and evolving service proposition to all our feed customers well

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Mole Valley Feed Solutions, in conjunction with Three Counties Feeds, managed to increase volumes by 13% in the year with a noteworthy performance, particularly in both dairy compounds and blend sales, taking aggregated volumes in the year to over 750,000 tonnes. As scheduled, our recent investment in South West Scotland provided the largest growth area with volumes rising to over 50,000 tonnes. Another praiseworthy effort was achieved by the Alternatives Feeds team who overall achieved an additional volume increase of 10%. Moist blends increased by 5.4% and processed grain sales by a significant amount thanks to having extra capacity at a new facility, with molasses and dry straights increasing by 15.3%. It was a progressive year for our feed blends also with some notable milestones being passed; we relocated our Devon blend plant to Risdon, near Okehampton. This new modern blending facility has enabled us to increase both finished product and raw material storage capacity giving us access to a greater range of quality raw materials.

business in order to realign our routes to market and to standardize manufacturing capacity in preparation to launch an advanced new range of products. Through the year some reorganisation of supervisory staff took place to accommodate our geographical development as we have worked to adapt a broader and more inclusive nutritional advice service with a local emphasis. The re-organisation has allowed personal development for a number of staff right across our feeds business. A new technical group is now formed to advance the thinking across the business with regards to nutrition, health, veterinary services and grassland production in order to provide a more innovative approach including reference to new research and development and to challenge existing thinking. We have also continued to review and use new rationing software, along with conducting Rumen pH bolus trials and options to improve forage analysis, facilitating closer links with leading academic and research institutes not only in the UK but also overseas. Hopefully, our results this year demonstrate that under very challenging circumstances the Agricultural Management team have done their utmost to meet with shareholders’ and customers’ requirements and remain resolute in producing and supplying quality products at competitive prices regardless of the pressure on margins. We consider that our feed business is in good shape with strong foundations for further growth and as a farmer owned business in a consolidating sector we need to keep looking for opportunities to grow our economies of scale to ensure choice and competitiveness can be sustained in the longer term. The consequence and impact within the supply chain of unrelenting low returns could result in many distribution models seeing much lower sales, falling margins and reduced profitability. The real pressure for all farm input suppliers could come during 2016 if we see no improvement in farm gate prices.

Mole Valley Forage Services

Although sales of minerals both direct to farm and through our rural stores did increase, in some respects it has been a year of consolidation for our combined mineral

This has probably been one of the hardest years we can recall for our fertiliser business. Justifiably, through the year, farmers became increasingly intent on reducing fertiliser usage where they could. Assessments suggest that nationally, demand for fertiliser reduced by 10-15% in the year as customers endeavoured not to purchase but to take advantage of the favourable weather patterns which gratefully provided some excellent grass growing conditions. Even new season pricing did not stimulate demand in the livestock sector with the continued uncertainty over milk prices and growing cash flow concerns. Consequently our conventional fertiliser business was adversely affected resulting in overall revenues reducing to £25.6m. Conventional fertiliser sales declined 11% in the year with demand for blended products also decreasing by 18%. Nitrogen sales increased by 6% probably reflecting the reduction in usage of P and K applications in favour of using more of straight Ammonium Nitrate and Urea products.

Mole Vitality FarmPacks

Having reviewed our manufacturing capacities we are now serving a wider trading geography

Mole Valley Farmers Annual Report and Accounts 2015

and a new facility in Newport, South Wales was commissioned having been planned in the previous trading year. This modern blending factory is significantly larger than our existing facility and will provide the opportunity to increase raw material and finished product storage. Alongside this we now have the convenience of being able to decant larger vessels and process an increased number of raw materials. To improve service levels we have invested in our trading capability, both in terms of headcount and training to try and help customers mitigate against increased volatility and reduce risk when buying commodity fertilisers. Our joint partners, Roullier Group, have continued to invest in the development of foundation fertilisers and specialist crop nutrition products that now provide the team with an even stronger portfolio of grassland and arable products to offer to customers. We have invested further in field based Crop Nutritionists, who now work alongside our team of Dairy Nutritionists as far north as Yorkshire and Cumbria.

Rural stores review The overall performance of our rural stores with their differing store formats serving a broader farming and rural community has been mixed due to inflationary causes and of a wider retail sector that still seems unhurried to show stronger signs of recovery as discretionary spending on the whole remains subdued. Whilst we continue to experience a growing number of non-farming customers visiting our rural stores, core agricultural products still remain at the heart of our broad retail proposition with farm purchases continuing to make up the largest overall revenue contribution across our 52 stores. Consequently, agricultural deflation in the year, depressed farm returns and a previous mild winter have all conspired to make this year, once again, extremely challenging for our store managers. Whilst like for like store sales grew to £193.5m and notwithstanding an increase in footfall, our store revenues, despite everyone’s efforts, did not quite meet with expectations. As a company we have given

great consideration to how we position and customise our rural store formats so that each offering can be best adapted to suit our regular customers, which also has bearing on the range of products, the choice of services offered and how we try and manage the complexities of an ever changing retail sector. Through our different branding approaches we believe we have the potential to understand and respond well to market conditions and regional differences, irrespective of the challenging retail environment and without compromising our agricultural presentation. Our brand and reputation for value is one of our cornerstones which we continue to prioritise. During the year we completed the rebranding of SCATS Countrystores to Mole Country Stores. This has been part of a wider plan to integrate the heritage, value and character of ‘The Mole’ with the intention of having a wider more inclusive application to make the most of our many own-branded initiatives across all store formats. During the year, having taken steps to improve our operational execution and inventory management, customers should have benefitted from better product availability; although I have to say this was not always the case in some of our larger stores that, on a daily basis, frequently experience higher footfall. In addition we have synchronised better our procurement with more timely promotional activities in order to provide customers with some really compelling purchasing opportunities and savings. Our priority in the coming year will be to elevate performance across all stores, particularly those underperforming stores that need more support to achieve their potential. Central to the performance of our stores is retail procurement which plays an increasing part in not only maintaining core ranges but also in developing new product opportunities when combined, determine the value and quality of the goods we provide through our stores. The procurement department also have responsibility to advance supplier relationships and improve supply chain efficiencies with the main objective of delivering best value to our members. In recent years, development of our own-brand philosophy has proven very successful and

Field and River tweed clothing has allowed us to promote ‘brand leading’ products under our own name at very competitive prices. During the year, savings are closely monitored and over £1m in buying improvements have been attained and invested into supplementary pricing initiatives. Our direct sourcing department is now an integral part of wider procurement business that during the year experienced a 28% increase in overseas sourcing. The department sourced a total of 267 new product lines and 200 x 20ft containers with products now being regularly imported from China, Italy, Spain, Latvia and New Zealand. Through the year the department contributed an overall product saving of circa £1.7 million. Throughout the year we launched a selection of new product initiatives, including a calf supplement tube, a reformulated mineral and vitamin drench and a premium cattle fly control product. When choosing own-brand products a very detailed process takes place to evaluate efficacy and quality to ensure each product meets with considered price points. Our intention is to always make sure that exceptional value and quality is all perceptible when purchased by customers. Deltamole, our own brand cattle fly control product, is a good example where we worked with a leading global manufacturer to provide customers with a proven active ingredient combined with unbeatable value. Another example where our own-label strategy has proven very popular this year is fencing stakes where in conjunction with a preferred supplier we developed a Shield fencing range carrying a unique guarantee. Our main challenge with this product has been securing enough to fulfil

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Mole Valley Farmers Annual Report and Accounts 2015

demand, which we are much more confident of doing in the coming year. Bagged feed is an important category and, despite the mild winter and price deflation, our own range of feed products grew by 18% which equated to over 1.4 million bags being sold across our retail store network which, in the main, are all produced through our own manufacturing facilities. Further examples of the value contained within our own range of products are horse feeds and in spite of deflation, significant growth was obtained to the detriment of some proven national brands. A new lightweight, hard wearing EVA wellington was launched, together with the ‘Hawkridge’ walking boot which proved extremely popular selling out within seven weeks. We introduced a new own brand pet food which also disclosed some good growths complemented by good sales of pet beds and accessories and finally, a Molecare dog wormer that was 33% cheaper than the main brand. In other retail areas, our food business has continued to grow and we are pleased that almost 90% of the turnover comes from local south west suppliers, a number of whom are members of Mole Valley Farmers. We are now selling approximately 60 tonnes of cheese and 60 tonnes of bacon and over 150,000 litres of locally produced milk. Mole Valley Farmers retail sales have held up extremely well given the deflationary influence with revenues totalling £87million, just marginally short of last year. Gratifyingly, we served more customers in the year than ever before with transaction numbers increasing by 2.1% and exceeding over 2 million. Whilst overall transaction numbers grew, basket spend reduced slightly; this was attributed mainly to variances in demand of specific seasonal products. Again, it was the core farming categories that featured strongly and contributed the most, hopefully reaffirming the value and depth of the offering that Mole Valley Farmers stores continue to provide to the farming community. A concerted effort to reduce slow moving stock assisted in improved use of working capital, combined with strong cost control measures resulting in overall targeted margins being retained. The overall sales performance has been largely influenced by four key farm input categories;

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cord and silage products, fertiliser, livestock feeds and seeds. These categories combined have reduced in value by approximately £2.0 million this year due to deflation, so it is relevant to note that sales volumes in these areas actually increased. Similarly, without any deflationary influence, we experienced some excellent sales growths in fencing and timber, pet, feeders and drinkers, food and drink and garden products. Following a suitable trial in May, Sunday opening was extended to two more stores and in September seven day a week opening was introduced to all remaining stores. Sales transactions indicated that the added convenience of being able to visit a store on a Sunday is appealing to all customer types, with agricultural categories featuring strongly. Our main capital investment project this year was the redevelopment of our Holsworthy store.

Holsworthy branch of Mole Valley Farmers The new site opened in late September and has provided a much improved and needed facility with a larger yard, drive through feed store, easier parking and more spacious shop. Finally, in response to customer feedback, we have continued to invest in our local produce led food and drink concept and this will continue to be rolled out across our estate in the year ahead. Mole Country Stores is now formally a retail division of Mole Valley Farmers and is the amalgamation of SCATS Countrystores, CWG and Farmway all of which were previously trading as separate entities. The rebranding of each of these businesses was finally completed this year and now consists of four trading regions that mirror the previous store location footprint. Fundamentally, all that has changed is the rebranding of all

stores to enable a more inclusive approach to own-labelling and commercial strategies, improvements in systems and procedures underpinned by a more competitive pricing proposition. Aggregated like-for-like revenues of these combined businesses increased to £86.1m with sales transactions growing by 3.1% in the year. Several categories experienced a reduction in sales value due to negative inflation. Whilst these results fell short of our expectation, they do reflect some of the hard work and effort that has gone on in the year behind the scenes to transition the variances in regional performances into greater consistency and revenue growth. It is encouraging to report that aggregated likefor-like sales have increased year on year, but we were expecting more, given the strength of product offering and positive feedback we have been receiving from customers and the increasing footfall particularly during the latter half of the trading year. Again seasonal weather patterns and deflation have impacted on profitability, but despite this some stores have managed some good sales increases. A number of operational activities were initiated including investment in re-branding and some revamping of stores along with further development of the Farmer and Country membership scheme that now has over 13,000 members. In conclusion, we have a further year ahead of learning and understanding what needs to be done to improve business performance in the year as we seek to compete harder and deliver a more compelling offering. Bridgmans and Cox & Robinson with their conservative agricultural offerings and more reliance on revenues generated by direct-to-farm deliveries, have both made a meaningful contribution to the company’s overall result. The foundation for leaving these businesses with their own commercial identity non-aligned to Mole Valley Farmers or Mole Countrystores gives farming customers an alternative supplier of choice as they each have their own distinct range of products and personal services to meet with differing customer requirements. With Farm Direct having a propensity towards only stocking and selling lower margin agricultural products, the model is heavily

Mole Valley Farmers Annual Report and Accounts 2015

dependent on the sales of traditional farming categories. This year has seen sales revenues affected by lack of demand due to favourable weather conditions, reduced farm spending and significant levels of deflation. Overall, Bridgmans achieved a good result despite revenues reducing to £14.7 million, with Cox & Robinson contributing an additional £5.8m. In the course of the last 12 months steps have been taken to refine our agricultural product range to give farmers more value. This approach allows our Farm Direct stores to supply some niche agricultural products specific to this offering. Joining these traditional merchanting businesses together under Farm Direct will allow them to leverage differing buying opportunities and greater economies of scale. Earlier in the year we opened a new Cox & Robinson Farm Direct at Evercreech near Shepton Mallet, Somerset to complement those already located in Dorking and Buckingham. Since opening, the business has made a meaningful contribution. The team who manage and run this new location have proven track records, are well respected in their area and have received good endorsement from a local and growing customer base.

Additional Services Mole Valley Plus This department is dedicated to providing our members with a range of products and services not typically supplied through our rural stores. With over 12,000 members regularly using this service the team has had a busy year contributing in excess of £20.7m, handling over 230,000 calls and processing in excess of 110,000 orders. Fuel is by far the largest contributing product, with aggregates, concretes, ear tags, tyres and hire tools increasing proportionately. During the year new systems and procedures have been introduced to improve quotation-to-order service levels. We have also changed some internal procedures by allocating specially trained staff to provide a more proficient call answering service that now regularly handles over 900 customer enquiries daily, giving members greater access to more specialist products not available in our stores. During

the year a new initiative was undertaken to promote a selection of farm utility vehicles, including Toyota, Mitsubishi and Suzuki. This has proven to be extremely successful with accumulative vehicles sales exceeding 300 units and total savings for members approaching £800,000.

Molecare Veterinary Services Last year we integrated our veterinary services with an established Farm Practice in Exeter which this year has enabled the combined business to focus on providing both 1st and 2nd opinion veterinary services and in doing so grow the farmer client base. Turnover has increased to £2.5m by having a broader knowledge and greater veterinary expertise. This has provided the business with an opportunity to start developing a number of complementary services for the benefit of improved health and productivity on farm. Molecare large animal vets have extended their bases by opening a practice within our stores at Newton Abbot and Cullompton, Newton Abbot being the first branch to have both large animal (farm and horse vets) as well as the pet vet centre. The pet vet centre continues to attract new clients through its ethos of competitive pricing as well as offering a friendly, convenient and professional service. 2015 has been a conflicting year with changes relating to TB testing which resulted in fee income reducing by 30%, and resulted in some competing practices choosing not to offer this service anymore.

Mole Insurance Services In February 2014 we launched Mole Insurance Services, an insurance facility available to all Mole Valley Farmers customers. This is a service that offers independent, professional advice on a range of agricultural, commercial and personal insurances. We have seen particular success with farms and commercial motor competing well against established agricultural markets. Overall conversion rates are higher than anticipated as we achieve in excess of a 40% take up rate. Success to date demonstrates the need for alternative insurance markets, particularly in

the agricultural sector, to compete against established players providing real choice for our customers. Mole Insurance Services is a trading style of Pavey Group Ltd which is authorised and regulated by the Financial Conduct Authority for insurance and risk management only. (Registration No. 308106). Mole Valley Farmers Ltd is an Introducer Appointed Representative of Pavey Group Ltd. Pavey Group Ltd (Registered in England No. 3419086) is wholly owned by Pavey Group Holdings Ltd (Registered in England No. 02979493).

Moleenergy Revenues for the year increased to £3.9m, an 18% increase over the previous year with margins in line with plan. Through the year the renewable rollercoaster continued with the uncertainty over the Government’s policy on feed-in tariffs for solar PV and the Renewable Heat Incentive, which naturally meant customers were reluctant to proceed with projects until they knew for sure what the new rates were likely to be. Over the course of the year RHI payments for biomass systems fell from 7.72 pence per kilowatt to 4.4p which in conjunction with an unprecedented low oil price, brought into question the viability of RHI projects. Despite the uncertainty, Moleenergy supplied over 40 biomass projects during the year; almost twice the number than in the previous year. The majority of the installations have been to farmer members looking to heat their farmhouses with additional heat requirements qualifying for the commercial RHI. A number of customers took advantage of the domestic RHI although the uptake did not meet expectation, mainly due to the competitiveness of oil. 158 commercial solar PV projects were supplied demonstrating that this sector is still very much our core customer. This amounted to 19,362 panels totalling 4.95 megawatts (MW) of power. Sales from these 158 projects contributed £2.75million. By the end of the year the running total of installations for solar PV since the renewable energy business began back in 2010 had reached almost 800, with over 72,000 panels sold amounting to almost 18MW, enough to power 4,500 average households per year. Systems have been provided at schools, mushroom farms, fabricators, offices, hospices but the bulk have been supplied to our core farmer customers.

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Mole Valley Farmers Annual Report and Accounts 2015

The average install size remains around 26kW. Towards the end of our trading year and in consideration of the changing emphasis for renewables a decision was taken by the Board to enter into a joint venture arrangement with Anchorstone, an established and well regarded installation company. We believe the medium to long term future for renewable energy looks positive; as a business we need to adapt to the changing dynamics of this industry in order to continue providing the right solutions for our customers.

On-line

visited resource on the site; it now seems increasingly that retailers are looking at customer revenue across all channels rather than looking at ecommerce as a stand-alone store.

Farm buildings Our farm buildings department had a progressive year despite revenues reducing slightly to £6.4m. One of last year’s achievements for our fabrication business was meeting the CE accreditation standard for Farm Buildings. The effect of heavier steels, bigger haunches and more bracing created longer production lead times and meant production patterns altered this year. However, the team still managed to manufacture over 100 bespoke buildings, just short of last year’s production. Encouragingly demand for these quality value structures remains positive. Demand for roofing products remained weak through the year. With deflation affecting the majority of timber products demand was still high resulting in sales only reducing 2.3%.

Summary and Outlook Mole Valley Farmers website It has been another progressive year for our on-line business with visitors to our site increasing by 15%, now totalling over 3 million in the year with a large percentage making contact using mobile devices. Likefor-like revenues increased by 10.4%. Margin remained in line with forecast. More than 3,000 additional transactions were processed with an average order value exceeding expectations and a retained conversion rate overall static at 1.4%. Our customer service rankings continued to reflect high levels of customer acceptance of our service both on site and in terms of products delivered. During the year improvements were made to the website to improve customer experience while we also consolidated our social media presence which grew to 12,000 followers on the main MVF Facebook page. The key purpose of the website is to support our stores, the store locator page remains the most

10

Whilst farm incomes remain suppressed, it seems very likely that the outlook for all suppliers of farm inputs will remain challenging during 2016 including those with rural retail stores as retail seems slow to gather any real momentum. In general, consumer confidence still seems subdued and spending habits are also evolving as customers now seem to visit stores more frequently, but are buying less. Identifying new areas of growth both within and beyond our core competencies remains a priority. We need to consider how we can achieve space growth within our stores to enhance our offering and how we can best adapt our manufacturing facilities to drive for even more improved production efficiencies whilst remaining attentive of the need to invest wisely. Given the financial and growth performance of the company in recent years, the business is well placed with store formats that can cater for changing shopping habits and manufacturing facilities that are well invested for the future. The Board of Directors are in unison that further rationalisation and consolidation within the supply sector

is inevitable and that the company should continue looking for further opportunities to develop and grow. Equally, we are also aware that we need to manage a balanced perspective on scale and growth so as not to compromise business efficiencies and lose sight of our core values and purpose. I can assure shareholders that, as we grow, our culture and strong sense of purpose will keep our feet firmly on the ground; our priority will be to continue investing in our core business activities and values that set us apart from our competitors, underpin our strategy and govern the way we think and behave towards the farming community. The world of agriculture is changing quickly, therefore the consequences of us not adapting could compromise our position as a leading agricultural supply business. We have to build for the future to ensure Mole Valley Farmers’ market presence continues to create a highly competitive pricing arena for farm inputs and that the company has sustainable prospects. Once again, I cannot thank the staff enough for all their hard work and effort during the year and equally our farming shareholders and rural customers for their continuing support. Without doubt, the year ahead will be equally as challenging as the last - doubtlessly whilst uncertainty remains about the economic outlook for the UK and the European Union and the unpredictability regarding global pricing of agricultural outputs. However, be assured in the year ahead our culture towards continuous improvement will ensure we do our bit to improve shareholder value and customer satisfaction right across our operational sphere.

Graeme Cock Chairman

Andrew Jackson CEO

Mole Valley Farmers Annual Report and Accounts 2015

Report of the Directors Mole Valley Farmers Ltd Co Reg Number 679848

The directors present their report and audited financial statements for the year ended 30th September 2015.

Principal activity

The principal activity of the group continues to be that of a cost-saving farmers’ co-operative.

Results and dividend

In accordance with established practice, the directors do not recommend the payment of a dividend to shareholders. (2014: £nil). The profit for the financial year of £688,000 (2014: £3,587,000) has been transferred to reserves.

Employees

The group upholds the principle of equal opportunity and acknowledges its responsibility to provide employment for disabled persons where it is possible to do so. Appropriate training is provided for all staff as required. The group has a system of communication in place to ensure that all staff are informed of developments within the group and their own business operations. Employees are consulted on an ongoing basis through the Staff Liaison Group.

The group’s operations expose it to a variety of financial risks. The directors consider that liquidity risk and credit risks are not material given the healthy current asset position of the group and the high proportion of cash based transactions. The group has bank borrowings and adopts a policy of maintaining long term facilities at a fixed rate so as to mitigate the associated interest rate risk.

Provision of information to auditor

So far as each director is aware, there is no relevant audit information of which the Company’s auditor is unaware. Each director has taken all the steps that he ought to have taken in his duty as a director in order to make himself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.

Auditor

A resolution to appoint Ernst & Young LLP will be proposed at the forthcoming Annual General Meeting. on behalf of the Board

Contributions

No political contributions were made (2014: £nil).

Principal risks and uncertainties As discussed in the Strategic Report, the principal risks facing the business are a highly competitive retail environment, unpredictable raw material markets and a declining number of farms and herd numbers. The directors, on occasions, make use of forward contracts for the purchase of raw materials to mitigate risks. The directors review the risks and uncertainties facing the business on a regular basis and appropriate processes are put in place to monitor and mitigate them.

A G Chapple BSc (Hons) A.C.A. Company Secretary Dated 10th December 2015

11

Mole Valley Farmers Annual Report and Accounts 2015

Statement of Directors’ Responsibilities Mole Valley Farmers Ltd Co Reg Number 679848

The directors are responsible for preparing the Strategic Report, 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 they have elected to prepare the group and parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice). 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 group and parent company and of their profit or loss for that period. In preparing each of the group and parent company financial statements, the directors are required to: •

select suitable accounting policies and then apply them consistently;

•

make judgements and 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 group and the parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the

12

company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Mole Valley Farmers Annual Report and Accounts 2015

Independent Auditor’s Report to the Members of Mole Valley Farmers Mole Valley Farmers Ltd Co Reg Number 679848

We have audited the financial statements of Mole Valley Farmers Ltd for the year ended 30 September 2015 set out on pages 14 to 29. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

Opinion on financial statements

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.

•

Respective responsibilities of directors and auditor As explained more fully in the Directors’ Responsibilities Statement set out on page 12, 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 A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate

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 30 September 2015 and of the group’s profit for the year then ended; have been properly prepared in accordance with UK Generally Accepted Accounting Practice; 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 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.

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.

Andrew Campbell-Orde (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 100 Temple Street, Bristol, BS1 6AG Dated 10th December 2015

13

Mole Valley Farmers Annual Report and Accounts 2015

Mole Valley Farmers Ltd Co Reg Number 679848

Consolidated profit and loss account For the year ended 30 September 2015

2015 £000's

Notes TURNOVER

2

Cost of sales GROSS PROFIT Administrative expenses

Amortisation Other operating income

3

OPERATING PROFIT / (LOSS)

2014

£000's

Interest in joint ventures and Group associates

£000's

Total

£000's

£000's

Interest in joint ventures and Group associates

Total

407,939

14,180

422,119

407,793

14,709

422,502

(347,780)

(12,500)

(360,280)

(347,637)

(13,324)

(360,961)

60,159

1,680

61,839

60,156

1,385

61,541

(58,150)

(2,126)

(60,276)

(54,757)

(1,174)

(55,931)

2,009

(446)

1,563

5,399

211

5,610

(435)

-

(435)

(366)

-

(366)

726

18

744

626

24

650

2,300

(428)

1,872

5,659

235

5,894

Net interest payable and similar charges

5

(726)

(12)

(738)

(648)

-

(648)

PROFIT / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION

6

1,574

(440)

1,134

5,011

235

5,246

Tax on profit / (loss) on ordinary activities

7

(522)

76

(446)

(1,604)

(55)

(1,659)

PROFIT / (LOSS) FOR THE YEAR

21

1,052

(364)

688

3,407

180

3,587

TOTAL RECOGNISED GAINS AND LOSSES

The group including joint ventures has no recognised gains or losses for the current or previous year other than the profit for the year.

HISTORICAL COST PROFITS AND LOSSES

There is no difference between the profit / (loss) on ordinary activities before taxation and the retained profit / (loss) for the year stated above and their historical cost equivalents.

CONTINUING ACTIVITIES

All profits in the current year are from continuing activities.

14

£000's

Mole Valley Farmers Annual Report and Accounts 2015

Mole Valley Farmers Ltd Co Reg Number 679848

Consolidated balance sheet As at 30 September 2015

2015 £000's

Notes

2014

£000's

Interest in joint ventures and associates Group

£000's

Total

£000's

£000's

£000's

Interest in joint ventures and associates Group

Total

FIXED ASSETS Intangible Assets

9

7,656

138

7,794

7,962

148

8,110

Tangible Assets

10

29,868

233

30,101

28,321

153

28,474

Investments

11

37

-

37

37

-

37

Investment in Joint Ventures and Associates

13

770

(770)

-

1,284

(1,284)

-

38,331

(399)

37,932

37,604

(983)

36,621

CURRENT ASSETS Stocks

14

30,266

898

31,164

29,731

1,035

30,766

Debtors

15

43,907

1,526

45,433

43,397

1,357

44,754

14

71

85

19

433

452

74,187

2,495

76,682

73,147

2,825

75,972

(54,607)

(2,085)

(56,692)

(57,919)

(1,842)

(59,761)

NET CURRENT ASSETS

19,580

410

19,990

15,228

983

16,211

TOTAL ASSETS LESS CURRENT LIABILITIES

57,911

11

57,922

52,832

-

52,832

(11,418)

(11)

(11,429)

(7,071)

-

(7,071)

46,493

-

46,493

45,761

-

45,761

Cash at bank and in hand

CREDITORS:Amounts falling due within one year

CREDITORS: Amounts falling due after more than one year

16

17

NET ASSETS CAPITAL AND RESERVES Called up share capital

20

2,728

-

2,728

2,734

-

2,734

Share premium

21

801

-

801

760

-

760

Capital redemption reserve

21

60

-

60

51

-

51

Profit and loss account

21

40,246

-

40,246

39,558

-

39,558

Shareholders' funds

43,835

-

43,835

43,103

-

43,103

Members' loan capital

2,658

-

2,658

2,658

-

2,658

46,493

-

46,493

45,761

-

45,761

2,603

-

2,603

2,613

-

2,613

41,232

-

41,232

40,490

-

40,490

43,835

-

43,835

43,103

-

43,103

TOTAL FUNDS EMPLOYED Analysis of shareholders' funds Non-equity Equity

G M Cock Approved by the board on 10th December 2015 The notes on pages 18 to 29 form part of these financial statements

15

Mole Valley Farmers Annual Report and Accounts 2015

Mole Valley Farmers Ltd Co Reg Number 679848

Company balance sheet As at 30 September 2015

2015 Notes

£000's

2014 £000's

£000's

£000's

FIXED ASSETS Intangible Assets

9

2,782

2,891

Tangible Assets

10

16,231

14,409

Investments

11

15,541

17,905

34,554

35,205

CURRENT ASSETS Stocks

14

24,409

18,273

Debtors

15

24,252

27,581

96

176

48,757

46,030

(35,436)

(36,568)

Cash at bank and in hand

CREDITORS:Amounts falling due within one year

16

NET CURRENT ASSETS

13,321

9,462

TOTAL ASSETS LESS CURRENT LIABILITIES

47,875

44,667

(10,300)

(6,112)

37,575

38,555

CREDITORS: Amounts falling due after more than one year

17

NET ASSETS CAPITAL AND RESERVES Called up share capital

20

2,728

2,734

Share premium

21

801

760

Capital redemption reserve

21

60

51

Profit and loss account

21

31,329

32,353

Shareholders' funds

34,918

35,898

Members' loan capital

2,657

2,657

37,575

38,555

2,604

2,614

32,314

33,284

34,918

35,898

TOTAL FUNDS EMPLOYED Analysis of shareholders' funds Non-equity Equity

G M Cock Approved by the board on 10th December 2015 The notes on pages 18 to 29 form part of these financial statements

16

Mole Valley Farmers Annual Report and Accounts 2015

Mole Valley Farmers Ltd Co Reg Number 679848

Group cash flow statement

For the year ended 30 September 2015

2015 Notes NET CASH INFLOW FROM OPERATING ACTIVITIES

£000's

27

2014 £000's

£000's

5,014

£000's 7,805

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Dividends received

200

150

Interest paid on finance leases

(65)

(19)

(661)

(629)

Other interest paid

(526)

(498)

TAXATION Taxation paid

(901)

(1,858) (901)

(1,858)

CAPITAL EXPENDITURE Purchase of tangible fixed assets

10

(5,563)

(4,894)

Purchase of intangible fixed assets

9

(175)

(1,795)

278

82

Sale of tangible fixed assets

(5,460)

(6,607)

ACQUISITIONS & DISPOSALS Purchase of interest in associate undertakings

(50)

-

Purchase of Trade investments

-

(31)

Sale of intellectual assets

-

350

NET CASH OUTFLOW BEFORE FINANCING

(50)

319

(1,923)

(839)

FINANCING Repayment of bank loans

29

(8,738)

(2,554)

New bank loans

29

12,000

-

Capital element of finance lease rental payments

29

(574)

(335)

44

58

Net Proceeds from issue and redemption of shares

INCREASE / (DECREASE) IN CASH

28

2,732

(2,831)

809

(3,670)

17

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

1 Accounting policies The financial statements have been prepared in accordance with applicable Accounting Standards in the United Kingdom. A summary of the more important accounting policies, which have been applied consistently, except where otherwise stated has been set out below:

Basis of preparation and consolidation

The financial statements have been prepared under the historical cost convention. The Group financial statements consolidate the financial statements of Mole Valley Farmers Ltd (the Company) and its trading subsidiaries, Mole Valley Feed Solutions Ltd, D&I Bridgman and Son Ltd, Three Counties Feeds Ltd, Cox and Robinson (Agricultural) Ltd and Mole Trading Ltd made up to 30th September 2015. As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is not presented.

Going concern

The directors have considered the financial position of the group and company and have concluded that it will be able to meet its liabilities as they fall due in the foreseeable future. For these purposes the foreseeable future is taken to mean a period of at least 12 months from the date of approval of these accounts.

Turnover

Turnover represents amounts derived from the supply of goods falling within the group’s ordinary activity, excluding value added tax.

Cost of sales

Cost of sales includes the purchase of goods/raw materials and where appropriate, manufacturing costs and haulage.

Direct sales

Goods delivered directly to members are taken into account and invoiced to members on receipt of suppliers invoices by the company. Goods delivered direct to members prior to the year end for which no invoices had been received by the Company at the balance sheet date are excluded from both trade debtors and trade creditors.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided on tangible fixed assets in order to write off each asset over its estimated useful economic life and is calculated using the following methods and rates. Freehold property Leasehold property improvements Computers Plant and office machinery Fixtures and fittings Motor vehicles and lorries

40 years straight line 10 years straight line 3 years straight line 5-10 years straight line 7 years straight line 4-5 years straight line

Intangible assets

Intangible fixed assets comprise goodwill, trademarks and IT development. The value of goodwill held represents the excess of the fair value of the consideration paid over the fair value of the assets acquired. Goodwill, software development and trademarks are carried within Intangible Assets on the Balance Sheet and amortised on a straight line basis over their estimated useful life. Goodwill and trademarks are amortised over 20 years and software development over 10 years. The book values of goodwill are reviewed should any trigger event indicate that the goodwill has been impaired. Any impairment in value is charged to the consolidated profit and loss account.

Stocks

Stocks are valued at the lower of cost or net realisable value. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal.

Financial instruments

Forward contracts and interest rate swaps are used to manage exposure to commodity price and interest rate risks and are not used for trading purposes. Instruments qualify for hedge accounting where the underlying asset or liability has characteristics which can be directly related to the instrument transacted. Any potential losses on forward contracts are provided in the financial statements in arriving at the operating result. Interest differentials arising under interest rate swaps are taken to the profit and loss account on an accrual basis and included within interest payable.

Deferred taxation

Provision is made for deferred taxation on all material timing differences. Deferred tax assets are recognised where their recovery is considered more likely than not. Deferred tax assets and liabilities have not been discounted.

18

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction or, if hedged forward, at the rate of exchange under the related forward currency contract. Exchange differences are taken into account in arriving at the operating result. The group hedges exchange rate risks based on its estimated obligations in foreign currencies at the relevant due date.

Leased assets

Finance Leases

The asset is treated as if it has been purchased outright at the original cost price, included in fixed assets and depreciated accordingly. Finance costs within the leasing agreements are charged to the profit and loss account using approved methods and the total commitments to the lessor are shown as liabilities in the Group and Company’s balance sheet.

Operating Leases

Rental costs incurred in respect of assets held under operating leases are charged to the profit and loss account as incurred.

Pension contributions

The Group operates a pension scheme, the Mole Valley Group personal pension scheme. Contributions being charged to the profit and loss account when incurred. The assets of the scheme are held separately from those of the Group.

Members loan capital

Loans received by the Company from its members are included within the funds employed by the Company. These are only repayable on the winding up of the Company.

2 Turnover RETAIL

RETAIL

AGRI

AGRI

OTHER

OTHER

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

Turnover

241,318

234,307

177,781

183,210

31,130

33,860

Inter segment sales

(19,167)

(17,652)

(19,015)

(21,464)

(4,108)

(4,468)

Sales to third parties

222,151

216,655

158,766

161,746

27,022

29,392

Profit before taxation

186

1,594

811

2,971

577

446

-

-

(292)

255

(148)

(20)

26,436

26,212

16,544

16,381

3,513

3,168

-

-

689

1,122

81

162

SEGMENTAL REPORTING

Group share of profit before tax of joint ventures

Net assets Group share of net assets of joint venture

Substantially all turnover, net profit before taxation and net assets arise in the United Kingdom. Retail activities represent operations from the group’s retail outlets. Agri activities represent the manufacture and distribution of animal feeds, minerals and arable products. Other activites include the fabrication of agricultural buildings, the sale of agricultural products direct from our partner suppliers as well as the group’s head office functions.

3 Other operating income 2015 £000’s

2014 £000’s

Rents received

285

171

Trade interest received

269

299

7

6

165

150

726

626

Commissions received Country membership fees

19

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

4 Employees and directors Group 2015 £000’s

2014 £000’s

Wages and salaries

33,063

31,170

Social security costs

2,752

2,634

Other pension costs

771

744

36,586

34,548

The average number of employees (full time equivalent) during the year was as follows:

Purchasing and sales staff

Group 2015 number

2014 number

1,036

1,005

Production and distribution

248

222

Management and administration

239

223

Aggregate directors emoluments

1,523

1,450

£000’s

£000’s

315

337

The aggregate of emoluments of the highest paid director was £79,000 (2014: £86,000), and Company pension contributions of £nil (2014: £nil) were made during the year. None of the other directors have any retirement benefits accruing under the Group personal pension scheme.

5 Net interest payable and similar charges Net interest payable on overdraft, bank loans and deposits Interest payable on finance leases

2015 £000’s

2014 £000’s

661

629

65

19

726

648

2015 £000’s

2014 £000’s

6 Profit on ordinary activities before taxation Profit on ordinary activities before taxation is stated after charging/(crediting) Operating leases

- hire of equipment

886

809

- land and buildings

3,647

3,762

Depreciation

- owned assets

3,918

3,576

- leased assets

606

396

Auditor’s remuneration

- audit services

100

100

- taxation services Amortisation

- goodwill - other intangibles

20

25

27

396

359

39

7

Profit on disposal of fixed assets

1

(48)

Profit on disposal of intellectual assets

-

(350)

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

7 Taxation on profit on ordinary activities 2015 £000’s

2014 £000’s

- current year

524

1,397

- prior year

(59)

125

465

1,522

24

116

The tax charge on the profit on ordinary activities for the year was as follows: UK corporation tax Current tax Deferred taxation (Note 19)

- current year timing differences - prior year timing differences

The tax assessed for the period is higher (2014: higher) than the tax rate applying in the United Kingdom 20.5% (2014: 22.0%). The differences are explained below: Profit on ordinary activities before taxation Profit on ordinary activities at the UK tax rate

33

(34)

522

1,604

2015 £000’s

2014 £000’s

1,574

5,011

321

1,101

Expenses not deductible for tax purposes

62

78

Difference between depreciation and capital allowances

33

(180)

Fixed asset differences

179

344

Utilisation of losses and other adjustments

(71)

54

Adjustments in respect of previous period

(59)

125

465

1,522

The deferred tax asset at 30 September 2015 has been calculated based on the rate of 20% substantively enacted at the balance sheet date.

8 Holding company profit and loss account As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent company is not presented. The retained profit before the impairment charge referred to in note 11 for the company in the year amounted to £1,390,000

9 Intangible Assets Group

Purchased goodwill £000’s

Software Trademarks Development and Patents £000’s £000’s

Total £000’s

Cost As at 1 October 2014 Additions

7,953

2,500

101

10,554

175

-

-

175

-

-

(101)

(101)

8,128

2,500

-

10,628

2,540

2

50

2,592

396

34

5

435

-

-

(55)

(55)

As at 30 September 2015

2,936

36

-

2,972

Net book value at 30 September 2015

5,192

2,464

-

7,656

Net book value at 30 September 2014

5,413

2,498

51

7,962

Impairments As at 30 September 2015 Amortisation As at 1 October 2014 Charge for the year Impairments

Company The company holds goodwill on the acquisition of Glamorgan Farm Supplies, with a net book value of £318,000 (2014: £340,000), and software development costs with a net book value of £2,464,000 (2014: £2,500,000). The SCATS Countrystores trade mark with a net book value of £46,000 (2014: £51,000) was fully impaired during the year following the rebranding of SCATS Countrystores to Mole Country Stores and has been recognised in the holding company profit and loss account (note 8).

21

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

10 Tangible fixed assets Group

Cost As at 1 October 2014

Freehold land & buildings

Short leasehold land & buildings

Fixtures, fittings, plant & equipment

Motor vehicles owned

Total

£000’s

£000’s

£000’s

£000’s

£000’s

20,412

3,409

35,521

6,010

65,352

Additions

1,294

202

3,685

1,169

6,350

Disposals

-

(226)

(353)

(255)

(834)

21,706

3,385

38,853

6,924

70,868

6,357

1,462

25,585

3,627

37,031

534

288

2,560

1,142

4,524

As at 30 September 2015 Depreciation As at 1 October 2014 Charge for the year Eliminated on disposals As at 30 September 2015 Net book value at 30 September 2015 Net book value at 30 September 2014

-

(92)

(225)

(238)

(555)

6,891

1,658

27,920

4,531

41,000

14,815

1,727

10,933

2,393

29,868

14,055

1,947

9,936

2,383

28,321

Included within plant and equipment are leased assets with a net book value of £1,843,000 (2014: £1,606,000).

Company

Cost As at 1 October 2014 Additions Disposals

Freehold land & buildings

Leasehold land & buildings

Fixtures, fittings, plant & equipment

Motor vehicles owned

Total

£000’s

£000’s

£000’s

£000’s

£000’s

15,029

2,931

20,748

885

39,593

1,294

191

2,601

254

4,340

-

(226)

(350)

(241)

(817)

16,323

2,896

22,999

898

43,116

5,974

1,122

17,295

793

25,184

406

282

1,281

273

2,242

-

(92)

(223)

(226)

(541)

As at 30 September 2015

6,380

1,312

18,353

840

26,885

Net book value at 30 September 2015

9,943

1,584

4,646

58

16,231

9,055

1,809

3,453

92

14,409

As at 30 September 2015 Depreciation As at 1 October 2014 Charge for the year Eliminated on disposals

Net book value at 30 September 2014

Included within plant and equipment are leased assets with a net book value of £36,000 (2014: £nil).

22

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

11 Fixed asset investments Group

Company

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

As at 1 October

-

-

17,899

17,683

Additions

-

-

50

216

Impairments

-

-

(2,414)

-

At 30 September

-

-

15,535

17,899

37

6

6

6

Investments in subsidiaries and joint venture

Other investments At 1 October

-

31

-

-

At 30 September

Additions

37

37

6

6

Total investments

37

37

15,541

17,905

During the year Management conducted a impairment review of the Mole Country Stores Ltd and Mole Trading Ltd investments within the Mole Valley Farmers Ltd balance sheet as a result of the trades being transferred into Mole Valley Farmers Ltd. This impairment loss has been recognised in the holding company’s profit and loss account (note 8) and has not affected the Group’s results. The investments have been written down to the net asset values of the subsidiaries as at 30 September 2015. The company directly owns the whole of the issued ordinary shares of the following subsidiary undertakings Company Mole Valley Feed Solutions Ltd D&I Bridgman and Son Ltd Three Counties Feeds Ltd Cox & Robinson (Agricultural) Ltd Mole Valley Wholesale Ltd Mole Trading Ltd Mole Valley Forage Services Ltd Molecare Veterinary Services Ltd SCATS Countrystores Ltd Mole Valley Financial Services Ltd Mole Country Stores Ltd Molesolar Plus Ltd

Business Supply and manufacture of animal feedstuffs Agricultural supplies Supply of animal feedstuffs Agricultural supplies Agricultural wholesaling Agricultural retailing Fertiliser supply and manufacture Veterinary Services Dormant Dormant Dormant Solar PV projects

% 100 100 100 100 100 100 50 50 100 100 100 45

Capital and reserves 30/09/15 £13,758,000 £1,007,000 £1,883,000 £2,256,000 £445,000 £1,795,000 £1,379,000 £17,000 £100 £1 £285,000 £181,000

All of the above companies are registered in England and Wales

12 Acquisition and Disposal of businesses Acquisition: During the year the agricultural business of W.M. Lillico & Son was purchased for an initial consideration of £175,000. The business is included in the results of Cox & Robinson (Agricultural) Ltd.

23

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

13 Investment in joint ventures and associates Group

£000’s 1,284

Share of net assets at 1 Oct 2014 Investment in Molesolar Plus Ltd

50

Share of 2015 loss

(364)

Dividends received from joint ventures

(200) 770

Share of net assets at 30 Sept 2015

On 1 August 2006, Mole Valley Farmers Ltd entered into a joint venture agreement with Timac UK, for the purpose of supplying fertiliser products to the combined customer base of the two companies. The joint venture, Mole Valley Forage Services Ltd is a company incorporated in England and Wales. The consideration given was £150,000 by way of the transfer of assets into the joint venture, with each company owning an equal share of the joint venture. Mole Valley Farmers Ltd owns 150,000 (50%) of the ordinary shares of Mole Valley Forage Services Ltd. On 1 August 2014 the company entered into a 50:50 joint venture arrangement with St David’s Farm Practice Ltd. The joint venture, Molecare Veterinary Services Ltd is a company incorporated in England and Wales. The consideration given was £185,000 by way of the transfer of assets into the joint venture, with each company owning an equal share. On 1 August 2015 Mole Valley Farmers Ltd entered into an agreement with Molesolar Plus Ltd (formerly Anchorstone Trading Ltd). Molesolar Plus Ltd is incorporated in England and Wales. The consideration given was £50,000 by way of a transfer of cash into the company, with Mole Valley Farmers Ltd owning 45% of the shares.

14 Stocks Group

Company

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

25,849

25,249

23,728

17,575

Feed and fertiliser

3,736

3,784

-

-

Engineering stock

681

698

681

698

30,266

29,731

24,409

18,273

Branch stocks for resale

15 Debtors Group

Company

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

Trade debtors

33,858

35,540

16,133

10,032

Other debtors

418

314

265

195

Deferred taxation

112

169

103

235

-

-

345

13,052

Amounts due from group undertakings Prepayments and accrued income

9,519

7,374

7,406

4,067

43,907

43,397

24,252

27,581

All amounts shown are receivable within one year.

16 Creditors: Amounts falling due within one year Group 2015 £000’s Bank loans and overdraft (Note 18) Trade creditors Corporation tax Other taxes and social security Amounts due to group undertakings Accruals and deferred income Finance leases (Note 18)

24

Company 2014 £000’s

2015 £000’s

2014 £000’s

5,669

7,395

3,237

3,429

37,127

37,504

22,011

22,380

200

636

29

151

1,717

2,013

1,481

1,862

-

-

4,150

2,996

9,383

9,899

4,514

5,750

511

472

14

-

54,607

57,919

35,436

36,568

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

17 Creditors: Amounts falling due after more than one year Group

Bank loans Finance leases

Company

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

10,286

6,112

10,286

6,112

1,132

959

14

-

11,418

7,071

10,300

6,112

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

5,669

7,395

3,237

3,429

511

472

14

-

6,180

7,867

3,251

3,429

18 Bank loans and other borrowings The aggregate amounts of loans, overdraft and finance leases are as follows Group

Company

Amounts due within one year: Bank loans and overdraft Finance leases Amounts falling due after more than one year: Bank loans and finance leases repayable by instalments are: Between one and two years

2,173

2,763

1,729

2,449

Between two and five years

9,245

4,308

8,571

3,664

After five years

Aggregate amounts

-

-

-

-

11,418

7,071

10,300

6,113

17,598

14,938

13,551

9,542

The following loans were outstanding at 30 September 2015 Amount of loan

Repayment terms

Interest

£6,000,000

Quarterly over 5 years

LIBOR plus 1.5%

£6,000,000

Quarterly over 5 years

Fixed rate of 3.184%

SECURITY The loans are secured by way of a debenture on the assets of the Group and a first legal charge on certain properties. The Company has entered into two interest rate swap transactions for the purpose of hedging the Company’s future interest liability by replacing floating interest rate risk with fixed interest commitments. The details are as follows: Commencement Date

Amount

Rate %

Terms

17th December 2007

£2,000,000

5.05

Fixed over 15 years

Market value (liability) at 30 Sept 2015 (£491,204)

25

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

19 Deferred taxation Group

Company

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

Differences between accumulated depreciation and capital allowances claimed

(15)

21

(16)

(57)

Other timing differences

(97)

(190)

(87)

(178)

(112)

(169)

(103)

(235)

Group £000’s

Group £000’s

Company £000’s

Company £000’s

(169)

(251)

(235)

(169)

The deferred tax asset compromises:

Balance brought forward at 1 October 2014 Deferred tax charge/(credit) in profit and loss account (Note 7) Balance carried forward at 30 September 2015

57

82

132

(66)

(112)

(169)

(103)

(235)

No provision is made for the capital gains tax liabilities on the gains arising on the sale of freehold properties in 1986, 1989, 2004 and 2008 which have been rolled over into subsequent acquisitions. In accordance with FRS19 “deferred tax”, a deferred tax asset is recognised only to the extent that management believe it is more likely than not that unprovided deferred tax assets are recoverable on current forecasted profits. The deferred tax asset at 30 September 2015 has been calculated based on the rate of 20% substantively enacted at the balance sheet date. It has not yet been possible to quantify the full anticipated effect of the announced further rate reduction, although this will further reduce the company’s future current tax charge and reduce the company’s deferred tax asset accordingly.

20 Called up and fully paid share capital Alloted, called up and fully paid 2015

2014

2015

2014

Number

Number

Class

Nominal Value

£

£

124,695

120,150

Ordinary

£1

124,695

120,150

1

1

Special

£1

1

1

2,603,583

2,613,353

Trading

£1

2,603,583

2,613,353

2,728,279

2,733,504

In the year, £4,545 £1 ordinary shares were issued for a total cash consideration of £45,450. Neither the non equity special share nor the non equity trading shares have the right to participate in any dividend, distribution of profits or distribution of assets of the Company amongst the members save on a repayment of capital whereupon the holders shall be entitled to be repaid the par value but shall not be entitled to participate further or otherwise. The holders of the special share shall be entitled to: -

receive notice of and attend all general meetings and meetings of the holders of other classes of shares in the company

-

demand a poll

-

on a poll the special share shall (subject to the provisions of Clause 55 in table A) confer on the holders thereof the right to exercise a number of votes equal to the aggregate of all other votes cast and one additional vote

The trading shares: -

entitle the holder to apply for a trading account for a period of up to 12 months

-

are non transferable

-

give the holder the right to receive notice of, attend, speak, but not vote, at general meetings of the Company and be entitled to receive a copy of the annual financial statements

-

are only repayable on the formal liquidation of the Company after ordinary shareholders have received the face value of their shares

-

are redeemable by the Company at the request of the trading shareholder (and/or her or his personal representatives or their successors in title) only on the death or bankruptcy of the shareholder, or the formal dissolution of a trading shareholder being a partnership, or on the insolvency or winding-up of a trading shareholder being a body corporate. In all cases the redemption amount payable by the company is 10 pence per trading share During the year, 9,770 trading shares (2014: 6,077) were redeemed at a value of £977 (2014: £608).

26

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

21 Share premium account and reserves Group

Share Premium Account £000’s

Capital Redemption Reserve £000’s

Profit and loss account £000’s

760

51

39,558

Balance brought forward at 1 October 2014 Movement in the year Balance carried forward at 30 September 2015

41

9

688

801

60

40,246

760

51

32,353

41

9

(1,024)

801

60

31,329

Company Balance brought forward at 1 October 2014 Movement in year Balance carried forward at 30 September 2015

22 Pension commitments As noted in the accounting policies set out in Note 1, the Group operates a group personal pension scheme. At 30 September 2015, £137,000 was outstanding (2014: £128,000) and the profit and loss account charge for the year amounted to £771,000 (2014: £744,000).

23 Capital commitments At the year end, the board of directors had approved capital expenditure which was contracted for, but not provided within the financial statements to the value of £637,000 (2014: £1,725,000) Company £208,000 (2014: £707,000).

24 Contingent liabilities The company has guaranteed the borrowings of it’s joint ventures up to the value of £2,500,000. The value of borrowings in existence as at 30 September 2015 was £1,605,978. In addition, a group omnibus guarantee is in place between the company and all it’s trading subsidiaries to cover the group overdraft facility provided by Lloyds Banking Group of £15,500,000

25 Operating leases The following payments are committed to be paid within one year: Motor vehicles and equipment

Land and buildings 2015 £000’s

Group Expiring:

Within one year Two to five years Over five years

2014 £000’s

Expiring:

Within one year Two to five years Over five years

2014 £000’s

9

26

140

191

347

200

683

536

3,351

3,082

-

7

3,707

3,308

823

734

Motor vehicles and equipment

Land and buildings Company

2015 £000’s

2015 £000’s

2014 £000’s

2015 £000’s

2014 £000’s

-

-

57

58

120

165

244

227

2,021

1,814

-

-

2,141

1,979

301

285

27

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

26 Transactions with directors and related parties The directors all trade with the Group, purchase farm requisites and sell farm products under trading terms applicable to all members of the Group. The total aggregate purchases during the year amounted to £1,458,000 (2014: £1,528,000) of which £139,000 (2014: £129,000) was owed to the Group as at 30 September 2015. There were no aggregate sales to the Group (2014: £nil) and £nil was owed by the Group at 30 September 2015 (2014: £nil). The total aggregated value of sales to Mole Valley Forage Services Ltd during the year was £719,000 (2014: £769,000) and the balance owing was £6,000 (2014: £993). The total aggregated purchases from Mole Valley Forage Services Ltd during the year was £1,193,000 (2014: £2,650,000) and the balance owed was £106,000 (2014: £233,000).

27 Reconciliation of operating profit to net cash inflow from operating activities 2015 £000’s

2014 £000’s

2,300

5,659

Loss / (profit) on sale of fixed assets

1

(48)

Profit on sale of intellectual assets

-

(350)

4,524

3,972

481

366

Operating profit

Depreciation charges Amortisation (Increase) / decrease in stocks

(535)

203

Increase in debtors

(567)

(6,915)

(Decrease) / increase in trade creditors

(377)

3,885

(Decrease) / increase in other creditors and accrued expenses

(813)

1,033

5,014

7,805

2015 £000’s

2014 £000’s

809

(3,670)

(2,688)

2,889

(1,879)

(781)

(787)

(685)

Increase in net debt

(2,666)

(1,466)

Net debt as at 1 October 2014

(14,918)

(13,452)

(17,584)

(14,918)

Net cash inflow from operating activities

28 Reconciliation of net debt Increase / (decrease) in cash in the year Cash flow from (increase) / decrease in debt and lease financing Change in net debt from cashflows New finance leases

Net debt as at 30 September 2015

29 Analysis of net debt

Cash in hand and at bank

Cash flow

£000’s

£000’s

Other non cash changes £000’s

30 September 2015 £000’s

19

(5)

-

14

Overdrafts

(4,769)

814

-

(3,955)

Debt due after 1 year

(6,112)

(5,888)

1,714

(10,286)

Debt due within 1 year

(2,626)

2,626

(1,714)

(1,714)

Finance leases

(1,430)

574

(787)

(1,643)

(14,918)

(1,879)

(787)

(17,584)

Total

28

1 October 2014

Mole Valley Farmers Annual Report and Accounts 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2015

30 Reconciliation of movement in shareholders funds 2015 £000’s

2014 £000’s

688

3,587

35

52

9

6

732

3,645

43,103

39,458

Closing shareholders’ funds as at 30 September 2015

43,835

43,103

Company

2015 £000’s

2014 £000’s

(Loss) / profit for the financial year

(1,024)

240

35

52

9

6

Net (reduction) / addition to shareholders’ funds

(980)

298

Opening shareholders’ funds as at 1 October 2014

35,898

35,600

34,918

35,898

Group Profit for the financial year Net movement in nominal value of share capital Capital redemption reserve Net addition to shareholders’ funds Opening shareholders’ funds as at 1 October 2014

Net movement in nominal value of share capital Capital redemption reserve

Closing shareholders’ funds as at 30 September 2015

31 Authority for issue and approval of financial statements The financial statements were approved for issue and distribution by the Board on 10th December 2015.

29

Mole Valley Farmers Annual Report and Accounts 2015

Notice of the fifty fifth Annual General Meeting The fifty fifth Annual General Meeting To be held at The Arundell Arms Hotel, 1 Fore St, Lifton PL16 0AA on Friday 18th March 2016, commencing promptly at 10.30 am for the following purposes:1.

2.

To receive and approve for the year ended 30th September 2015 (a)

The report of the directors

(b)

The financial statements, together with the report of the auditors

Election of directors Brian Jennings, Graeme Cock and Gaynor Wellwood retire by rotation and are seeking re-election. Any alternative nominations, from eligible persons, should be received in writing not later than noon on 12th February 2016, together with written confirmation of the nominee’s willingness to accept election (Companies Act 1985 Section 93 Table A).

3.

To appoint Ernst & Young LLP as auditors to the business and authorise the directors to fix their remuneration.

4.

To renew authority to allot shares

by order of the Board A G Chapple BSc (Hons) A C A Secretary 24th December 2015 Notes:

30

1.

A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies, using a proxy form to attend and vote in their place. A proxy need not be a member. Proxy forms will be issued shortly after Friday 12th February 2016.

2.

In the event of an election, brief information about the candidates will be circulated to shareholders eligible to vote.

Mole Valley Farmers Annual Report and Accounts 2015

31

Mole Valley Farmers Annual Report and Accounts 2015

Exmoor House, Lime Way, Pathfields Business Park, South Molton, Devon. EX36 3LH Tel: 01769 573431 Fax: 01769 573821 Email: [email protected]

For further information, please visit www.molevalleyfarmers.com 32