Company registration number 00531889 (England and Wales)
J.E.HARTLEY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
J.E.HARTLEY LIMITED
COMPANY INFORMATION
Directors
Mr W T Hartley
Mrs E A Verity
Mr T E Verity
Mr J E Hartley
Secretary
Mrs E A Verity
Company number
00531889
Registered office
Roth Hill Lane
Thorganby
York
YO19 6DJ
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
J.E.HARTLEY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
J.E.HARTLEY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Principal activity
The principal activity of the company continues to be that of arable farming combined with freezing and processing of vegetables.
Business model
The group has two distinct business functions:
Vegetable Processing and Ingredient Suppliers; where the business model is to provide our customers with the safest ingredients of the highest quality; this is achieved by making it our job to understand the customers' processes and needs by forming strategic alliances and working very closely with them.
Pea Growing; where the business model is to rent land under a one year licence which is then utilised by the company to grow a single crop of peas which is processed through its own factory.
We strive to provide the highest level of service to our suppliers and customers through the provision of exceptional industry based technical expertise which is applied to understanding our supplier processes and promoting improvement in supplier practices to meet customer demands.
We operate in the UK and Europe supplying produce to manufacturers in the food industry, food service and retail customers.
Relationships with our suppliers and customers are seen as paramount in order to ensure our mutual businesses thrive, grow and continue to work together in the future.
Business review and results
Turnover increased during the year under review, to £18.3m (2023 - £17.7m) which is due to stronger demand from Customers; Gross margins improved to 22.7% (2023 – 18.5%) which is due a better harvest in 2024.This has produced profits which are in excess of Target and the previous period. The pre-tax profit was £587K (2023 - £498k).
The business continues to invest, spending £377k (2023 - £ 530k) on capital equipment during the year. This expenditure has been funded from cash flow.
Net dividends of £nil were made during the period, we have decided to maintain this policy for the foreseeable future.
We feel we are in a good position at the year end which will allow us to capitalise based on our forward strategy which amongst others is to further integrate more of the supply chain into our business. After two better years we are now looking to improve the foundations of our business with increased capital expenditure planned for 2025 which will help provide a great platform to take the business forward over the coming years.
J.E.HARTLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
Key performance indicators
The company adopts a variety of key performance indicators (KPI’s) to monitor its performance. The principal KPI’s are sales and margin reports and weekly profit and loss accounts. The company holds weekly management meetings at which the performance of each department is discussed and any issues are highlighted and measures put in place to remedy them, with progress being reported at subsequent meetings.
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Profit/(Loss) for the period | | | | |
In order to meet its aim of delivering to customer expectations the group reviews complaints weekly and fully investigates the origin of the issue raised.
The use of these KPI’s enables management to ensure that service levels are maintained and that profitability is monitored and reasons for fluctuations are understood and remedial action can be taken where necessary.
Principal risks and uncertainties
The company is subject to global weather conditions and their effect on crop harvests and commodity prices. This risk is mitigated by forward contracting many of our supply and sale contracts back to back and dual sourcing from distinct geographical areas where appropriate.
The company is also subject to exchange rate fluctuations which are mitigated by fixing foreign exchange contracts at the time supply deals are contracted to remove the risk.
Interest rates represent a further risk which is managed via the use of tight working capital management. Whilst we have continued to operate throughout Covid due to our key worker status it still represents a risk to the business should we be hit with repeated outbreak, thus far however we are pleased to say the impact has been minimal
Future developments
The company operates in a very competitive market which means in order to succeed the company must maintain a tight cost base and offer a point of difference to our customers. Accordingly the board believes that whilst customers and suppliers will continue to apply margin pressure this will be mitigated by our strategic relationships. The current swing in market trends towards vegetarian, organic and product provenance is seen as a strong opportunity and fits with our vision and market focus.
With an ever increasing worldwide population the range and volume of food requirements continues to rise. The board is striving to capitalise on this opportunity by sourcing new and exciting products.
Mr T E Verity
Director
21 January 2025
J.E.HARTLEY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Principal activities
The principal activity of the company continues to be that of arable farming combined with freezing and processing of vegetables.
Results and dividends
The results for the year are set out on page 8.
No interim dividends were paid during the year. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr W T Hartley
Mrs E A Verity
Mr T E Verity
Mr J E Hartley
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr T E Verity
Director
21 January 2025
J.E.HARTLEY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
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.
J.E.HARTLEY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.E.HARTLEY LIMITED
- 5 -
Opinion
We have audited the financial statements of J.E.Hartley Limited (the 'company') for the year ended 30 September 2024 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 30 September 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We 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.
J.E.HARTLEY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF J.E.HARTLEY LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
J.E.HARTLEY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF J.E.HARTLEY LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Chris Woodroffe
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
21 January 2025
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
J.E.HARTLEY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
18,371,934
17,692,020
Cost of sales
(14,756,744)
(14,427,462)
Gross profit
3,615,190
3,264,558
Administrative expenses
(2,652,479)
(2,456,921)
Other operating income
21,945
18,770
Operating profit
4
984,656
826,407
Interest payable and similar expenses
6
(397,487)
(328,214)
Profit before taxation
587,169
498,193
Tax on profit
7
57,000
Profit for the financial year
644,169
498,193
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
J.E.HARTLEY LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
8
3,947,188
4,260,459
Current assets
Stocks
9
7,218,916
5,971,912
Debtors
10
4,004,151
4,134,831
Cash at bank and in hand
46,016
375,989
11,269,083
10,482,732
Creditors: amounts falling due within one year
13
(7,580,048)
(7,527,759)
Net current assets
3,689,035
2,954,973
Total assets less current liabilities
7,636,223
7,215,432
Creditors: amounts falling due after more than one year
14
(1,332,908)
(1,556,286)
Net assets
6,303,315
5,659,146
Capital and reserves
Called up share capital
17
100,000
100,000
Profit and loss reserves
6,203,315
5,559,146
Total equity
6,303,315
5,659,146
The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
Mr T E Verity
Director
Company Registration No. 00531889
J.E.HARTLEY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2022
100,000
5,060,953
5,160,953
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
498,193
498,193
Balance at 30 September 2023
100,000
5,559,146
5,659,146
Year ended 30 September 2024:
Profit and total comprehensive income for the year
-
644,169
644,169
Balance at 30 September 2024
100,000
6,203,315
6,303,315
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
1
Accounting policies
Company information
J.E.Hartley Limited is a private company limited by shares incorporated in England and Wales. The registered office is Roth Hill Lane, Thorganby, York, YO19 6DJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with 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 £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. 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 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
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’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
J E Hartley Limited is a wholly owned subsidiary of Hartleys Food Holdings Limited. The results of J E Hartley Limited are included in the consolidated financial statements of Hartleys Food Holdings Limited, which has a registered office of Roth Hill Lane, Thorganby, York, YO19 6DJ.
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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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), 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.
Revenue from the provision of services, including cold storage, is recognised according to the date the service is provided.
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.
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 12 -
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:
Plant and equipment
3% to 33% straight line
Motor vehicles
25% straight line
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
Peas
The company values its harvested biological assets at fair value less costs to sell, as permitted by section 34 of FRS102. The company's biological assets comprise of peas which it has grown, harvested and frozen.
Other 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.
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 13 -
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.
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from connected companies 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 receipts 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 accounted for as noted below.
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 though 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
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
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.
1.13
Retirement benefits
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.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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.
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Inventory overhead cost absorption
The company processes bought in raw materials into finished goods. Inventory values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting. Management assign a standard cost per kg of produced product depending on labour intensity and throughput hours. This is amended at the year end based on actual production and actual overhead costs.
Pea inventory valuation
The company values its harvested biological assets at fair value less costs to sell, as permitted by section 34 of FRS102. The company's biological assets comprise of peas which it has grown, harvested and frozen.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its fair value less costs to sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Depreciation
The depreciation policy has been set according to management's experience of the useful lives and residual values of a typical asset in each category, something which is reviewed annually. The depreciation charged during the year was £673,575 (2023 - £679,684) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
3
Turnover
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Factory
18,371,934
17,692,020
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
3
Turnover
(Continued)
- 17 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
16,769,535
17,030,940
Rest of Europe
803,139
312,416
Rest of the World
799,260
348,664
18,371,934
17,692,020
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(9,662)
(63,442)
Fees payable to the company's auditor for the audit of the company's financial statements
13,800
13,125
Depreciation of owned tangible fixed assets
601,713
523,398
Depreciation of tangible fixed assets held under finance leases
71,862
156,286
Loss on disposal of tangible fixed assets
36,642
-
Operating lease charges
379,099
388,520
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
4
4
Factory
45
42
Administration
17
16
Total
66
62
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,593,213
2,219,331
Social security costs
278,696
246,622
Pension costs
66,174
59,876
2,938,083
2,525,829
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 18 -
6
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
116,893
104,329
Interest on finance leases and hire purchase contracts
8,069
11,825
Other interest
272,525
212,060
397,487
328,214
7
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
(57,000)
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
587,169
498,193
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.00%)
146,792
109,602
Tax effect of expenses that are not deductible in determining taxable profit
515
680
Tax effect of utilisation of tax losses not previously recognised
(230,850)
(182,711)
Group relief
26,852
64,542
Other tax adjustments
(309)
7,887
Taxation credit for the year
(57,000)
-
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 19 -
8
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost or valuation
At 1 October 2023
11,906,851
95,661
12,002,512
Additions
366,947
38,000
404,947
Disposals
(1,334,586)
(24,477)
(1,359,063)
At 30 September 2024
10,939,212
109,184
11,048,396
Depreciation and impairment
At 1 October 2023
7,705,152
36,901
7,742,053
Depreciation charged in the year
653,541
20,034
673,575
Eliminated in respect of disposals
(1,291,575)
(22,845)
(1,314,420)
At 30 September 2024
7,067,118
34,090
7,101,208
Carrying amount
At 30 September 2024
3,872,094
75,094
3,947,188
At 30 September 2023
4,201,699
58,760
4,260,459
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. Finance leases and hire purchase contracts are secured against the individual assets which they acquired.
2024
2023
£
£
Plant and equipment
295,447
1,104,840
9
Stocks
2024
2023
£
£
Raw materials and consumables
219,799
267,719
Finished goods and goods for resale
6,999,117
5,704,193
7,218,916
5,971,912
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 20 -
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,738,892
3,256,391
Amounts owed by group undertakings
661,067
264,649
Other debtors
77,882
81,447
Prepayments and accrued income
374,310
437,344
3,852,151
4,039,831
Deferred tax asset (note 15)
152,000
95,000
4,004,151
4,134,831
£1,867,807 (2023 - £2,587,781) of trade debtors have been pledged as security against an invoice discounting facility as detailed in note 11.
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
11
Loans and overdrafts
2024
2023
£
£
Bank loans
1,499,827
1,685,739
Bank overdrafts
1,768,817
1,943,553
3,268,644
3,629,292
Payable within one year
1,972,984
2,147,720
Payable after one year
1,295,660
1,481,572
The bank loans and overdrafts are secured by fixed and floating charges over all property as owned by this company. Interest payable on the bank loan facility is 1.8% above base rate and is fully repayable by 2038.
Included within bank overdrafts is an invoice discounting facility with a year end balance of £1,768,817 (2023 - £1,943,553), the security of which is detailed within note 10.
12
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
68,857
208,536
In two to five years
41,160
86,260
110,017
294,796
Less: future finance charges
(8,489)
(11,546)
101,528
283,250
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
12
Finance lease obligations
(Continued)
- 21 -
Finance lease payments represent rentals payable by the company for certain items of plant and equipment and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 6 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
11
1,972,984
2,147,720
Obligations under finance leases
12
64,280
208,536
Trade creditors
4,128,281
3,706,531
Taxation and social security
58,619
53,562
Other creditors
616,583
690,266
Accruals and deferred income
739,301
721,144
7,580,048
7,527,759
Bank loans and overdrafts are secured as detailed in note 11.
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
11
1,295,660
1,481,572
Obligations under finance leases
12
37,248
74,714
1,332,908
1,556,286
Bank loans and overdrafts are secured as detailed in note 11.
Amounts included above which fall due after five years are as follows:
Payable by instalments
711,111
777,778
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 22 -
15
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(640,000)
(646,000)
Tax losses
792,000
741,000
152,000
95,000
2024
Movements in the year:
£
Asset at 1 October 2023
(95,000)
Credit to profit or loss
(57,000)
Asset at 30 September 2024
(152,000)
The deferred tax asset created by the available tax losses is offset against the deferred tax liability created by the accelerated capital allowances as offset is available within the tax computations.
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
66,174
59,876
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.
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
J.E.HARTLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 23 -
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
325,359
341,606
Between two and five years
1,267,111
1,164,081
In over five years
2,514,373
2,804,493
4,106,843
4,310,180
Tha majority of the above operating lease commitments relate to the lease of the premises owned by the parent company.
19
Related party transactions
Transactions with related parties
Hartley Food Holdings Limited, the ultimate parent company, advanced unsecured loans which at the balance sheet date amounted to £661,067 (2023 - £264,649). No interest has been paid on this balance.
20
Ultimate controlling party
The ultimate parent company and controlling party is Hartleys Food Holdings Limited, of which J E Hartley Limited is a wholly owned subsidiary. The results of J E Hartley Limited are included in the consolidated financial statements of Hartleys Food Holdings Limited, which has a registered office of Roth Hill Lane, Thorganby, York, YO19 6DJ.
21
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
182,122
159,561
Company pension contributions to defined contribution schemes
407
-
182,529
159,561
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
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