Company registration number NI016347 (Northern Ireland)
FLEMING AGRI PRODUCTS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
FLEMING AGRI PRODUCTS LTD
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 23
FLEMING AGRI PRODUCTS LTD
COMPANY INFORMATION
- 1 -
Directors
Mr George Fleming
Mrs Doreen Fleming
Mr Jonathan Lecky
Secretary
Mr George Fleming
Company number
NI016347
Registered office
Ballyorr
New Buildings
Co Londonderry
BT47 2SX
Auditor
Moore (NI) LLP
21-23 Clarendon Street
Derry-Londonderry
BT48 7EP
Business address
Ballyorr
New Buildings
Co Londonderry
BT47 2SX
Bankers
Ulster Bank Limited - (Strabane Branch)
Abercorn Square
Strabane
Co Tyrone
Solicitors
Dickson & McNulty
PO Box 106
50 Spencer Road
Londonderry
BT47 6AA
FLEMING AGRI PRODUCTS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present the strategic report and financial statements for the year ended 31 December 2023.
Fair review of the business
The Directors are pleased with the performance of the business for 2023. The profit and loss account is set out on Page 10.
Turnover for the year is £12,757,068 compared to £13,421,344 for the previous year. This represents a decrease in turnover of 4.95%. There is an increasing trend to reduce the carbon footprint of food creating a continued need for locally produced produce. Strong farming commodity prices within the agricultural industry were counteracted by exorbitantly higher input costs throughtout the 2023 year. Farming continues to be classed as an essential industry but demand for farm machinery slowed in the latter part of the year due to a combination of bad weather and reduced nett farming income. Fleming Agri Products Ltd maintained manufacturing levels gradually increasing stock to shorten lead times creating shorter delivery times to satisfy a slower demand for machinery throughout the latter half of 2023 year.
Gross margin percentage has risen slightly from 22.61% in 2022 to 22.96% in 2023. The company implemented product price increases throughout the year to try and keep abreast of any increases in raw material prices and fuel and energy costs. The increase in interest rates started to curtail the sales of more expensive equipment which in turn reduced the stocking levels of companies which had a knock-on effect in the latter half of 2023.
Principal risks and uncertainties
Our customers are primarily dealers in agricultural machinery and to a much lesser degree individual farmers. Therefore the performance of the company is dependent on general conditions within the agricultural industry and the availability of finance for farmers to purchase new machinery. Sales can be affected by factors such as the weather conditions, availability of government subsidies, commodity prices and livestock health.
The Company is affected by currency fluctuations to the extent that a proportion of our manufacturer partners either source parts or manufacture products overseas. The Board is aware of the uncertainties this causes and factors exchange rate fluctuations into the decision making process.
The Company is dependent upon a number of business critical systems which, if interrupted for any length of time, could have a material effect on the running of the company's business. The Board has implemented a series of contingency plans which would enable the Company to resume operations within a short space of time, thus mitigating the likelihood of material loss.
The war in Ukraine continued global demand for raw materials causing an increase in costs throughout the first half of 2023. The Covid 19 effect on major raw material suppliers and consumers like Europe, India and China began to ease the availability of components and raw material to mainland Europe and the UK in the latter half of 2023 but the unprecedented price increases that occurred during the COVID years did not fall to the same extent as they went up which kept pressure on the gross profit margin.
FLEMING AGRI PRODUCTS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Development and performance
The new welding, spraying and finishing facilities which opened in 2020 are now well established and making a good contribution to the production. There are still some difficulties attracting staff to satisfy production needs, but our own internal training/welding academy combined with the continued relationship with the North West Regional College allows us to increase the trainee and apprenticeship intake to try and ease staffing issues.
The investment in new plant and machinery in recent years has proven a great help improving the potential and cost effectiveness of the workforce and facilities. In particular the new Plasma cutter has helped increase the versatility of the production facilities and reduce the dependence on outside contractors. The new generator has taken the pressure off our power requirement and allows the new facility to run independently from the grid when necessary. A new Tube Lazer was installed at the end of 2023 but was not fully operational. It is anticipated that this machine when fully operational will have a big impact on production efficiency and gross margin.
The demand for Fleming products eased in the latter half of 2023 allowing the company to bring some products into production which had not been allowed to be fully commercialised due to the earlier years intense work-load. Some new products which have already been designed and tested are now starting to hit the production floor and come on to the market, The R & D on new product development and production efficiency is now getting going again. Analysis of sales in recent years has highlighted how new products have significantly contributed to turnover. New product development has increased market share in new and existing markets.
Key performance indicators
The key performance indicators used by the directors are turnover, gross margin percentage and operating profit. These are set out below
2023
2022
Turnover
£12,757,068
£13,421,344
Gross margin percentage
22.96%
22.61%
Operating profit
£1,284,586
£1,448,924
As discussed above turnover has decreased by 4.95% while gross margin percentage has risen by 0.35%. There has been a decrease in operating profit of £164k.
Mr George Fleming
Director
30 July 2024
FLEMING AGRI PRODUCTS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of agricultural engineering.
Results and dividends
The results for the year are set out on page 10.
No dividends were declared or paid during the year (2022: £NIL).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr George Fleming
Mrs Doreen Fleming
Mr Jonathan Lecky
Financial instruments
Liquidity risk
Cash flow forecasting is performed by the Company to mitigate any liquidity risks and to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom for unforeseen expenditure.
Foreign currency risk
The Company is affected by currency fluctuations to the extent that a proportion of our manufacturer partners either source parts or manufacture products overseas. The Board is aware of the uncertainties this causes and factors exchange rate fluctuations into the decision making process.
Credit risk
Credit risk arises from cash and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. Risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal ratings in accordance with limits set by the Board. The utilisation of credit limits is regularly monitored.
Research and development
The company has continued to carry out research and development activities in respect of product development.
FLEMING AGRI PRODUCTS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Future developments
As referred to in the Strategic Report, the company plans to continue to further drive efficiency levels in the production facilities. The new high-definition plasma cutting machine has increased efficiencies in the cutting and preparation department and reduce the dependency on outside suppliers. This machine has been fully integrated into the design and production process creating more diverse thinking and creative design of products for better production efficiency. The company has invested in a new Tube Lazer at the end of 2023 to compliment the Plasma. This machine will be fully operational in 2024. It is proposed to continue to upgrade more welding machines to Low Energy welders for 2024 and we will complete the upgrade to the factory fume extraction system in 2024. With the increased costs of fuel, electric and gas the company continues to investigate into renewable energy systems to be less reliant on the National Grid by 2025. A feasibility study was carried out for a wind turbine but this was not an option. Investigations are ongoing for increasing our solar power system and possible battery storage. It is proposed to install a smaller 2m press brake to augment the existing 4m machine. When the investment in machinery is complete and fully integrated into the design and production process this will create greater efficiencies and improved quality. These new machines will also create too great a demand for power from our already strained power supply, so the company has installed a new 210 KW generator to augment our existing supply. To maximise the efficiency of the Tube Lazer and plasma cutter, a new steel store will be built beside the machines to reduce material travel time. The company’s administration offices are now 24 years old and are no longer suitable for the level of business. It is intended to build an extension to the existing building and renovate the sales area to a more open plan facility.
A new area sales manager will be appointed for the UK in 2024 and we will continue to put emphasis on developing our existing markets as well as enabling the company to develop a stronger presence in existing export markets.
Auditor
The auditor, Moore (NI) LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.
FLEMING AGRI PRODUCTS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr George Fleming
Director
30 July 2024
FLEMING AGRI PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FLEMING AGRI PRODUCTS LTD
- 7 -
Opinion
We have audited the financial statements of Fleming Agri Products Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
FLEMING AGRI PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FLEMING AGRI PRODUCTS LTD
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Based on our understanding of the company and its operating environment, we determined that the most significant frameworks which have a direct impact on the preparation of the financial statements are those related to the reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations. Compliance with these laws and regulations was assessed as part of our procedures.
Other laws and regulations of which non-compliance may have a material effect on the financial statements, eg through fines or litigation, were identified as employment law, health and safety and environmental regulations. Our required procedures in this area are limited to inquiry of Directors and other management and inspection of any regulatory or legal correspondence. These limited procedures did not identify any actual or suspected non-compliance.
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, including evaluating management's incentives and opportunities to manage earnings or influence the reported results. From the results of our assessment, we determined that the principal risk of fraud related to posting inappropriate journal entries. In common with all audits under ISAs (UK), we are required to perform specific procedures to respond to the risk of management override.
FLEMING AGRI PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FLEMING AGRI PRODUCTS LTD
- 9 -
Audit response to risks identified
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. Audit procedures performed by the engagement team included:
We obtained an understanding of the company's internal control systems in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company's internal control.
We obtained an understanding of how the company complies with relevant laws and regulations by making enquiries of management and those charged with governance.
Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
Enquiry of entity staff to identify any instances of non-compliance with laws and regulations.
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud
Reviewing minutes of management and directors meetings
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
We test the completeness of sales to address the risk of fraud in revenue recognition.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions that are unusual or outside the normal course of business.
We communicated relevant laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment through collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
John Love
Senior Statutory Auditor
For and on behalf of Moore (NI) LLP
30 July 2024
Chartered Accountants
Statutory Auditor
21-23 Clarendon Street
Derry-Londonderry
BT48 7EP
FLEMING AGRI PRODUCTS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
12,757,068
13,421,344
Cost of sales
(9,827,536)
(10,386,603)
Gross profit
2,929,532
3,034,741
Distribution costs
(810,885)
(915,000)
Administrative expenses
(842,989)
(697,001)
Other operating income
8,928
26,184
Operating profit
4
1,284,586
1,448,924
Interest receivable and similar income
7
15,519
3,381
Profit before taxation
1,300,105
1,452,305
Tax on profit
8
(310,668)
(275,951)
Profit for the financial year
989,437
1,176,354
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FLEMING AGRI PRODUCTS LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
2,356,504
2,085,243
Current assets
Stocks
10
4,039,940
4,185,324
Debtors
11
2,369,895
2,390,533
Cash at bank and in hand
3,698,195
2,743,609
10,108,030
9,319,466
Creditors: amounts falling due within one year
12
(1,515,260)
(1,500,342)
Net current assets
8,592,770
7,819,124
Total assets less current liabilities
10,949,274
9,904,367
Provisions for liabilities
Deferred tax liability
13
258,279
202,009
(258,279)
(202,009)
Government grants
14
(25,000)
(25,800)
Net assets
10,665,995
9,676,558
Capital and reserves
Called up share capital
16
185,002
185,002
Share premium account
17
90
90
Profit and loss reserves
18
10,480,903
9,491,466
Total equity
10,665,995
9,676,558
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
Mr George Fleming
Mr Jonathan Lecky
Director
Director
Company registration number NI016347 (Northern Ireland)
FLEMING AGRI PRODUCTS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
185,002
90
8,315,112
8,500,204
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
1,176,354
1,176,354
Balance at 31 December 2022
185,002
90
9,491,466
9,676,558
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
989,437
989,437
Balance at 31 December 2023
185,002
90
10,480,903
10,665,995
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Fleming Agri Products Ltd is a private company limited by shares incorporated in Northern Ireland. The registered office is Ballyorr, New Buildings, Co Londonderry, BT47 2SX.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Fleming Agri Limited whose registered office is Ballyorr, Newbuildings Industrial Estate, Newbuildings BT47 2SX. These consolidated financial statements are available from Companies House.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings freehold
2% on cost
Plant and machinery
20% on cost
Fixtures, fittings & equipment
20% on cost
Motor vehicles
25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred taxation is provided using the liability method on all material timing differences between profit as computed for taxation purposes and profits as stated in the financial statements to the extent that such differences are expected to reverse in the foreseeable future.
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The company operates a defined contribution scheme. Contributions payable to this scheme are charged to the profit and loss account in the period to which they relate. The assets are held separately from those of the company in an independently administered fund. Differences between the amounts charged to the profit and loss account and payments made to pension funds are treated as assets or liabilities.
1.13
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.16
Research and development
Expenditure on research and development costs is written off in the year in which it is incurred.
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
12,757,068
13,421,344
2023
2022
£
£
Other significant revenue
Interest income
15,519
3,381
Sundry income
4,428
8,884
Grants received
5,300
17,300
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom & Republic of Ireland
12,083,028
12,648,892
Rest of Europe
344,370
334,721
Rest of the world
329,670
437,731
12,757,068
13,421,344
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
53,088
(53,710)
Government grants
(5,300)
(17,300)
Fees payable to the company's auditor for the audit of the company's financial statements
9,900
7,450
Depreciation of owned tangible fixed assets
247,843
241,425
Profit on disposal of tangible fixed assets
(17,013)
(1,654)
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
3
3
Administration
13
12
Sales
7
7
Drivers
1
2
Production
92
92
Total
116
116
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,632,863
2,519,358
Social security costs
202,828
198,028
Pension costs
85,108
79,273
2,920,799
2,796,659
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
119,059
118,124
Company pension contributions to defined contribution schemes
28,201
28,980
147,260
147,104
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
14,383
3,381
Other interest income
1,136
Total income
15,519
3,381
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Interest receivable and similar income
(Continued)
- 20 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
14,383
3,381
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
254,398
297,362
Deferred tax
Origination and reversal of timing differences
56,270
(21,411)
Total tax charge
310,668
275,951
An increase to the UK Corporation Tax rate to 25% (where taxable profits are in excess of £250k) from 1 April 2023 was substantively enacted as part of the Finance Bill 2021. The deferred tax liability reflects this increased rate for timing differences which are expected to unwind on or after 1 April 2023.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,300,105
1,452,305
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
305,785
275,938
Tax effect of expenses that are not deductible in determining taxable profit
133
Permanent capital allowances in excess of depreciation
(554)
(4,432)
Depreciation on assets not qualifying for tax allowances
1,986
1,604
Effect of change in corporation tax rate on deferred tax
3,318
2,841
Taxation charge for the year
310,668
275,951
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
9
Tangible fixed assets
Land and buildings freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
1,966,957
1,789,026
174,665
295,763
4,226,411
Additions
4,094
419,856
5,294
89,860
519,104
Disposals
(35,000)
(97,220)
(132,220)
At 31 December 2023
1,971,051
2,173,882
179,959
288,403
4,613,295
Depreciation and impairment
At 1 January 2023
381,811
1,365,779
163,032
230,546
2,141,168
Depreciation charged in the year
29,246
168,266
4,607
45,724
247,843
Eliminated in respect of disposals
(35,000)
(97,220)
(132,220)
At 31 December 2023
411,057
1,499,045
167,639
179,050
2,256,791
Carrying amount
At 31 December 2023
1,559,994
674,837
12,320
109,353
2,356,504
At 31 December 2022
1,585,146
423,247
11,633
65,217
2,085,243
10
Stocks
2023
2022
£
£
Raw materials and consumables
2,859,968
2,979,085
Finished goods and goods for resale
1,179,972
1,206,239
4,039,940
4,185,324
There are no material differences between the replacement cost of stock and the balance sheet amounts.
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,422,720
1,820,810
Corporation tax recoverable
39,475
39,475
Amounts owed by group undertakings
572,000
Other debtors
258,617
289,129
Prepayments and accrued income
77,083
241,119
2,369,895
2,390,533
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,262,515
1,169,873
Corporation tax
64,760
140,362
Other taxation and social security
105,933
134,288
Accruals and deferred income
82,052
55,819
1,515,260
1,500,342
13
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated Capital Allowances
258,279
202,009
2023
Movements in the year:
£
Liability at 1 January 2023
202,009
Charge to profit or loss
56,270
Liability at 31 December 2023
258,279
The net reversal of deferred tax liabilities expected in 2024 is £41,000. This is expected to arise because depreciation is anticipated to be higher than the available capital allowances.
14
Government grants
2023
2022
£
£
Arising from government grants
25,000
25,800
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
85,108
79,273
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
FLEMING AGRI PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
185,002
185,002
185,002
185,002
17
Share premium account
2023
2022
£
£
At the beginning and end of the year
90
90
18
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
9,491,466
8,315,112
Profit for the year
989,437
1,176,354
At the end of the year
10,480,903
9,491,466
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
209,340
21
Directors' transactions
The company is owed £252,000 (2022: £252,000) by way of unsecured interest free loan to a company controlled by close family members of a director..
22
Ultimate controlling party
The company is under the control of its parent company Fleming Agri Limited.
The results of the company are included in the consolidated financial statements of Fleming Agri Limited, whose registered office is Ballyorr, Newbuildings Industrial Estate, Newbuildings BT47 2SX. These financial statements are available from Companies House.
The company has taken advantage of the exemption in FRS 102 (section 33) "Related party disclosure" not to disclose transactions with its parent company.
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