Registered number:
FOR THE YEAR ENDED 30 JUNE 2024
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M. R. GORTON LIMITED
COMPANY INFORMATION
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M. R. GORTON LIMITED
CONTENTS
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M. R. GORTON LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
The director presents the Group Strategic Report for the year ended 30 June 2024.
Principal Activities The principal activity of the Group in the year under review was that of production and processing of free range and organic chickens and turkeys.
A challenging marketplace continued however cost pressures have stabilised which have seen a large improvement in the overall gross margin of the business.
Previous years have been adversely affected by Avian Influenza. In 2023/24 the Group was free from any Avian Influenza outbreaks, and this was also reflective in the improved margins. Despite the continued challenging trading environment, the Company has continued to grow with the demand from its customers. Principal risks and uncertainties The principal risks facing the Group are: Competitive risk There is competition within the poultry production sector and the markets in which the Group operates, which can result in pressure on margins. The Group maintains relationships with customers to ensure it minimises the risk of losing business to competitors. Client dependency Over reliance on large customers not under long term contracts may expose the Group to a significant reduction of turnover and profits if the contract is terminated, or if such a customer does not pay for products in a timely manner, which may have an adverse effect on cash flow. Human resource risk Failure to retain key staff can adversely affect any business. Short lines of communication are maintained between the director and key staff to mitigate the risk. Commodity prices A significant proportion of the Group’s cost is attributable to the ingredients used in feed grain which can be affected by unsettled economic conditions, global supply and demand, weather patterns and government policies. The availability of the feed grain continues to be adversely affected by the war in Ukraine. The Group monitors feed prices carefully working closely with customers to reduce the impact of volatile market movements and agrees feed prices in advance with suppliers to manage the impact of adverse price movements when appropriate. Disease As a responsible agri-business, the health and welfare of our livestock is a high priority. Experienced, trained management are always on hand to monitor bird health with the support of a qualified veterinary advisor. Notifiable diseases such as avian influenza are a risk to the Group as an outbreak may result in some destruction of our livestock and products not infected or contaminated. The Group mitigates against such risk by maintaining robust bio-security measures. The Group has developed contingency plans should an outbreak of avian influenza occur in close proximity to any of its operating facilities.
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M. R. GORTON LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Food safety
Food safety is a high priority. The risk of food scares is mitigated by ensuring raw materials are traceable to source and manufacturing, storage and distribution systems are continually monitored by experienced and qualified technical staff. These systems will ensure our continued reputation for producing poultry to the highest standards. Operational health and safety Failure to maintain a sufficiently skilled workforce and retain key skills can adversely affect any business. Health and safety issues are reviewed and monitored on a regular basis. Interest risk The Group has structured debt and as such the director feels that interest rate risk is minimal. The director has taken steps to ensure the day to day commercial risks are managed comprehensively by the Group. To do this the management review financial performance which will alert them to adverse developments in trading performance and cash management.
The Group uses a range of Key Performance Indicators (KPI’s) to monitor the performance of the business on an ongoing basis. The financial measures include Revenue, Revenue Growth, Gross Profit Margin and Profit before Tax.
2024 2023 Revenue £49,082,671 £45,319,331 Revenue Growth % 8% -4% Gross Profit Margin 23% 12% Profit/(Loss) before Tax £3,193,750 (£146,347) Revenue growth in the year was a largely due to increased sales volume across our customer base. The input costs have stabilised with feed, the largest single input being less volatile which has helped improve the overall margin. Administration expenses increased throughout the year compared against 2023 largely due to increased farming rental space to cater for the additional volume. The Group also has non-financial KPI measurements in place such as staff retention % and accidents and incidents which are key metrics for the Group. Staff retention % shows how successful the Group is in retaining its workforce. Health & Safety is a vitally important area within the business and daily and weekly KPI’s are reported on any accidents or incidents that have occurred.
The Group has a continued strategy to grow the farming base and continue to invest in the facilities at Shropham.
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M. R. GORTON LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Section 172(1) of the Companies Act 2006 requires the director to take into consideration the interests of the stakeholders in his decision making. The director continues to have regard to the interests of the Group’s employees and other stakeholders, including the impact of its activities on the community, the environment and the Group’s reputation, when making decisions. By acting in good faith and fairly, the director considers what is most likely to promote the success of the Group in the long term.
The director is fully aware of his responsibilities to promote the success of the Group in accordance with Section 172 of the Companies Act 2006. To ensure the Group meets this, the director regularly reflects on how the Group engages with its stakeholders and considers opportunities for enhancements to stakeholder engagement. Such stakeholders include employees, customers, suppliers and the local community. When making decisions, the director has regard, amongst other matters, to: - The likely consequences of any decision in the long term; - The interests of the Group’s employees; - The need to foster the Group’s business relationships with suppliers, customers and others; - The impact of the Group’s operations on the community and the environment; - The desirability of the Group maintaining a reputation for high standards of business conduct, and; - The need to act fairly between stakeholders of the Group. Stakeholders Employees: The director recognises that the Group’s employees are vitally important to the continued success of the business. The Group has continued its policy of informing employees of the matters of concern to them through formal and informal meetings and information notices. The Company ensures the employees are aligned to the business objectives and core values through employee forums, site briefings and award schemes. Customers: Engagement with the Group's customers ensures that the Group is aligned with their values, strategies and priorities, ensuring the Group works as strategic partners alongside them in order to ensure business sustainability and growth. Suppliers: Suppliers are a critical link to the overall Group supply chain, providing a source of value which meets the overall Group needs. The Group undertakes regular reviews in a two-way engagement to improve performance. Local community: The Group engages within the local community by supporting local events and charities throughout the year.
This report was approved by the board on 16 October 2024 and signed on its behalf.
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M. R. GORTON LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2024
The director presents his report and the financial statements for the year ended 30 June 2024.
The director is responsible for preparing the Group Strategic Report, the Director's Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £2,032,610 (2023 - loss £55,584).
Dividends of £303,500 were declared during the year (2023 - £226,557).
The director who served during the year was:
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M. R. GORTON LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
The directors recognise that the Group's employees are vitally important to the continued success of the business. The Group has continued its policy of informing employees of matters of concern to them through formal and informal meetings and information notices.
Impact of operations on the environment
The Group is committed to minimising it's environmental impact and promoting sustainability in it's operations. The Group recognises the importance of addressing emissions associated with it's activities and strives to continually improve it's environmental performance. Scope of emissions The Group’s emissions statement encompasses the direct and indirect greenhouse gas (GHG) emissions resulting from its poultry business operations in the United Kingdom. This includes emissions from it's facilities, transportation, and supply chain activities. Greenhouse gas inventory The Group has conducted a comprehensive inventory of it's greenhouse gas emissions based on reliable and validated methodologies. Scope 1&2 energy supplier invoices, sales tonnes, government greenhouse gas conversion factors. The inventory covers the following emission sources: a) Scope 1 Emissions: The Group accounts for direct emissions from sources it controls, such as emissions from on-site energy consumption, fuel combustion, and any refrigerants or chemicals used in it's operations. b) Scope 2 Emissions: The Group quantifies indirect emissions resulting from purchased electricity and heat consumed in it's facilities. c) Scope 3 Emissions: The Group considers relevant indirect emissions from it's value chain, including emissions from purchased goods and services, transportation, and waste disposal. Reduction Targets and Initiatives The Group is committed to reducing it's greenhouse gas emissions in line with national and international climate goals. To achieve this, the Group has established reduction targets and implemented initiatives such as: a) Energy Efficiency: The Group continuously evaluates and invests in energy-efficient technologies and equipment to minimize it's energy consumption and associated emissions. This is illustrated with the continued use of a New Alma Whole bird line which runs using less plastic and more efficiently than the pre-existing model. b) Renewable Energy: The Group actively explores opportunities to transition to renewable energy sources, such as solar or wind power, to reduce it's reliance on fossil fuels. The Group has 11 bio-mass boilers across various sites in use generating renewable energy. c) Waste Management: The Group implements waste management practices to minimise waste generation and promotes recycling and composting to reduce emissions from landfill. The reduction of plastic waste due to the new Alma whole bird line and an increased focus on water reduction has been continued during the year. d) Transport Optimisation: The Group optimizes it's transportation routes and explores sustainable transportation options to minimize emissions associated with it's supply chain. The Group engages with logistic companies to maximise pallet efficiency on all outloads.
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M. R. GORTON LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Monitoring and Reporting
The Group regularly monitors and assesses its emissions performance using reliable data collection methods. It maintains accurate records of emissions, reviews its progress against reduction targets, and reports its findings transparently. - The period covered Financial year 01/07/23-30/06/24 (Base year). - Methodology: Scope 1&2 energy supplier invoices, sales tonnes, government greenhouse gas conversion factors. - Measurement: Scope 1&2 tonnes CO2 equivalent per sales tonne. - Monthly breakdown of sales tonnes and energy inputs, electricity, biomass wood pellets, and LPG all reported on the Manufacture2030 TNP worksheet. Submitted base year data for YE 30/06/24.
ActivityScope Type Amount Units Total kg Total kg Total tonne
Carbon Carbon Carbon dioxide dioxide dioxide equivalent equivalent equivalent per unit Energy Scope1 Biomass wood pellets 65 tonnes 19.804 3,276 3 Liquified petroleum 12.533 tonnes 3,461 37,584 38 gas cylinders Liquified petroleum 47,986 litres 0.578 73,727 13 gas bulk Refrigerant release to air Scope1 HFC-R404A - kg 3,421 - - HFC-R449A - kg 1,267 - - HFC- R452A - kg 2,005 - - Energy Scope2 Grid electricity 2,383,082 kWh 0.422 506,054 506 includes transmission Material use Scope3 Chicken & Turkey 8,960 tonnes 3,213.79 32,139,250 32,139 sales Category3 material 4,899 tonnes 3,213.79 15,540,790 15,541 for rendering Water supply Scope3 Water supply 34,693 m3 0.1315 5,425 5 mains and borehole Waste Scope3 Cardboard recycling 26.25 tonnes 26.310 544 1 disposal Other recycling 8.12 tonnes 26,310 198 - Trade effluent for 24,009 tonnes 0.1952 6,511 6 landspreading Category2 material 144 tonnes 21.280 3,265 3 for combustion Residual waste 114 tonnes 21.280 2,642 2 for combustion Grand total 48,318,093 48,319 In the prior year, the Group had energy consumption and related carbon dioxide emissions as follows: - Scope 1 and 2 energy usage - 16,978 tonnes - Total carbon dioxide equivalent - 47,160 tonnes
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M. R. GORTON LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Stakeholder Engagement
The Group engages with it's employees, suppliers, customers, and other relevant stakeholders to raise awareness about our emissions reduction efforts and encourage their involvement in sustainable practices. The Group has signed up to the Manufacture 2030 programme with its customers in an attempt to collaboratively reduce it's carbon emissions. Continuous Improvement The Group is committed to continuously improving it's emissions management practices. It actively seeks innovative solutions and collaborates with industry partners, researchers, and experts to identify and implement best practices in emissions reduction and environmental sustainability. At M. R. Gorton Limited, we recognise that our environmental responsibility goes hand in hand with our commitment to delivering high-quality poultry products. Through effective emissions management and sustainable practices, we strive to contribute to a greener and more sustainable future for our business, our stakeholders, and the environment.
Since the year-end dividends totalling £30,000 have been paid.
The Group has made several capital purchases totalling £537,351 of which £249,446 was financed via new Hire Purchase agreements.
The auditors, Price Bailey LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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M. R. GORTON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED
We have audited the financial statements of M. R. Gorton Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the director's 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 Group's or the parent 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 director with respect to going concern are described in the relevant sections of this report.
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M. R. GORTON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The director is 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's Report.
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M. R. GORTON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED (CONTINUED)
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 Auditors' 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- We reviewed systems and procedures to identify potential areas of management override risk. In particular, we carried out testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions to identify large or unusual transactions; - We critically assessed significant estimates inherent in the financial statements. This involved assessing estimates against post year end actual performance and considering estimates in light of our expectations which are formed on the basis of past experience and our knowledge of the entity and the industry; - We held discussions with those charged with governance, to enquire whether they were aware of any instances of non-compliance with laws & regulations; - We reviewed legal expenses to indentify any instances of non-compliance with laws and regulations; - We obtained inspection reports from key regulatory visits in the year, to identify any instances of non-compliance; - We confirmed the bank balance as at the balance sheet date with the Group's bankers; - We confirmed the existence of a sample of employees to ensure there are no ficticious employees; - We reviewed a sample of pay rates to ensure minimum wage requirements are being met. We also reviewed a pay run to ensure there were no duplicate bank accounts being paid; and - We reviewed the accident log and gained an understanding of the Health & Safety procedures from discussion with the Group’s Health & Safety Champion; We performed the procedures set out above after gaining an understanding of the legal and regulatory framework applicable to the Group and the industry in which it operates, and after considering the risk of acts by the Group contrary to applicable laws and regulations including fraud. We obtained this understanding from discussions with those charged with governance, who did not make the engagement team aware of any non-compliance with laws and regulations or instances of fraud throughout the year or since the year end. In performing the above procedures we focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the Red Tractor Farm Assurance Poultry Scheme, the RSPCA Farm Assurance Scheme, the Organic Farms & Growers Association accreditation, the BRC accreditation, the Animal Welfare Act 2006, the Welfare of Farmed Animals Regulations 2007, the Companies Act 2006, UK Health & Safety law including RIDDOR (HSE 2013), Employment law and tax legislation.
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M. R. GORTON LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED (CONTINUED)
We enquired with those charged with governance as to how they ensure the Group complies with the applicable legal & regulatory framework. - The Group is subject to frequent regulatory audits & inspections, from both key customers and regulatory bodies such as SEDEX and the APHA; - DEFRA keeps a poultry register for any premises on which more than 50 birds are kept. The Group have a specific DEFRA license number, and are in regular communication with DEFRA, passing over key information in order to maintain the license; - The Group also has a health and safety committee which is comprised of several members of the companies management personel who meet monthly to discuss key risks and any issues surrounding health and safety. Following detailed team briefings, the Responsible Individual has assessed that the audit engagement team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with applicable laws and regulation. Nonetheless, 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Anglia House, 6 Central Avenue
St Andrews Business Park
Thorpe St Andrew
Norfolk
NR7 0HR
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M. R. GORTON LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
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M. R. GORTON LIMITED
REGISTERED NUMBER: 12976929
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 October 2024.
The notes on pages 19 to 40 form part of these financial statements.
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M. R. GORTON LIMITED
REGISTERED NUMBER: 12976929
COMPANY BALANCE SHEET
AS AT 30 JUNE 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 19 to 40 form part of these financial statements.
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M. R. GORTON LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
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M. R. GORTON LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
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M. R. GORTON LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
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M. R. GORTON LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2024
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
M. R. Gorton Limited is a private company, limited by shares, registered in England and Wales. The registered number is 12976929. The Company's registered office is Oak Tree Business Park, Hargham Road, Attleborough, Norfolk, NR17 1DS, which is the same address as its place of business.
The Company's principal activity is that of a holding company. The activity of the Group is the production and processing of free range chickens and turkeys. These financial statements are presented in Sterling, which is the Group's functional currency. Monetary amounts are rounded to the nearest £1.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
As at 30 June 2024, the Group had net current liabilities of £2,181,620 (2023: £3,180,868) including £4,708,205 (2023: £4,723,676) of invoice discounting advances. The day to day funding requirements are met through the invoice discounting facility which has been agreed on a rolling basis and no matters have been drawn to the director's attention to suggest that the facility will not be renewed on acceptable terms.
The director carries out a periodic forecasting exercise covering the operations of the Group and as a result of this and considering possible sensitivities, the director has a reasonable expectation that the Group has adequate resources to continue to meet the obligations of the Group as they fall due. The director will continue to monitor the situation closely, but at the date of signing the accounts, the director has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The director has therefore prepared the financial statements on a going concern basis.
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Goodwill
For the goodwill relating to the acqusition of Traditional Norfolk Properties Limited, amortisation is calculated on a straight line basis over a period of 10 years from the date of acqusition, such number of years being the director's estimate of the period over which benefits may reasonably be expected to accrue from the acquisition.
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
Contract intangible assets represent the independent valuation attributable to RHI contracts incorporated into the group. This is being written off to profit or loss over the life of the contracts of 18 years.
The assets residual values, useful lives and amortisation methods are reviewed and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Statement of Comprehensive Income.
At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset (or asset's cash generating unit) may be impaired. If there is such an indication the recoverable amount of the asset (or asset's cash generating unit) is compared to the carrying amount of the asset (or asset's cash generating unit).
The recoverable amount of the asset (or asset's cash generating unit) is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's (or asset's cash generating unit) continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset. If the recoverable amount of the asset (or asset's cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the Consolidated Statement of Comprehensive Income, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in the Consolidated Statement of Comprehensive Income. If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset's cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
Page 22
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Stocks consist predominantly of biological assets which are accounted for using the cost model as set out above. The significant assumptions applied are set out in note 3.
Where debts are invoice discounted the separate presentation treatment has been adopted. In accordance with this, the gross amount of the debts are included within trade debtors with advances received from invoice discounting being shown as a liability included within creditors due within one year.
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the period of the lease.
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
Page 24
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Page 25
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Depreciation of tangible assets An allowance for depreciation is made against tangible assets and charged to the statement of comprehensive income over the useful economic lives of the assets. The useful economic life assessment of an asset is based on the time in which benefits of the asset are realised to the company. See note 14 for the net carrying value of the tangible assets, and note 2.7 for the useful economic lives for each class of asset. Impairment of debtors The director makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, the directors consider factors including the credit worthiness and financial conditions of customers. See note 17 for the net carrying amount of the debtors. Valuation of stocks The director makes an estimate of the recoverable value of stocks. When calculating the stock provision, management considers the nature and condition of the stock as well as applying assumptions around anticipated saleability of goods held for resale. See note 16 for the net carrying amount of stocks. Management have estimated costs directly attributable to the valuation of livestock. These estimates include a proportion of overheads absorbed into the stock valuation. For gas, shavings and vet & medical costs in relation to chicks, a unit price is calculated by dividing the total cost for the year by the number of birds processed. This unit cost is then multiplied by the quantity of chicks in a given batch at the year end. This cost is also split evenly between the time chicks spend on a Brood/day old to death farm and time spent on a finish farm. Contract rearing costs are calculated as a cost per bird per day. The contract rearing cost per bird used is calculated as the total cost for the contract rearing per the rate agreed with the contract rearer divided by the number of batches per farm. The cost absorbed into the year-end stock value is then calculated by multiplying the cost per bird by the quantity of chicks in a batch at the year-end multiplied by the number of days they have spent on the farm. For rent, a cost per bird is calculated based on the annual rent charge per farm divided by the total number of batches of chickens that are sent to that farm in the period. Farms will provide monthly rental invoices which remain consistent throughout the year, therefore a monthly invoice will be multiplied by 12 to give an annual rental amount that is applied in the calculation. The rent cost per batch is then multiplied by the total quantity in stock at year-end. Labour costs are absorbed based on the total wages in relation to workers in the weekly paid catching, farm building and farming departments. Using the total of these wage costs a cost per bird for the year is calculated by dividing the labour cost by birds processed. A cost per chick per day is then calculated based on an assumed life cycle of 63 days per chick, which is based on an average of all kill days for the various types of chickens bred per industry standards. The cost per bird per day is then applied to the number of birds in stock at the year-end.
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
The director is of the opinion that there is only one category of business as set out in note 1, and consequently no segmental analysis by activity has been provided.
Page 27
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 28
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 29
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
11.Taxation (continued)
There were no factors that may affect future tax charges.
Page 30
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
12.Deferred taxation (continued)
Page 31
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Page 32
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
14.Tangible fixed assets (continued)
Page 33
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 34
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 35
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 36
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
The bank holds a fixed and floating charge over all assets of the Group against indebtedness to it.
Hire purchase contracts are secure against the underlying assets concerned. Invoice discounting advance are secured against the Group's freehold property and trade debtors.
Page 37
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 38
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Merger reserve
Profit and loss account
There is a joint and several liability under a group VAT registration. As at 30 June 2024, the total amount of VAT recoverable was £282,987 (2023 - £173,166).
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £210,185 (2023 - £116,227). Contributions totalling £49,101 (2023 - £38,074) were payable to the fund at the balance sheet date and are included in creditors.
Page 39
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M. R. GORTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
The Group has made several capital purchases totalling £537,351 of which £249,446 was financed via new Hire Purchase agreements.
The Director has identified that deferred income pertaining to grants were inaccurately aged in the prior year. Consequently, the 2023 comparatives have been corrected to move £771,818 from accruals and deferred income due within one year to accruals and deferred income due after one year.
The ultimate controlling party is Mr M R Gorton.
Page 40
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