Company registration number 12257484 (England and Wales)
A C HULME & SONS FARMING LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
A C HULME & SONS FARMING LTD
COMPANY INFORMATION
Directors
H L Hulme
T E Hulme
Company number
12257484
Registered office
A C Hulme and Sons
Brook Farm
Staple Road
Canterbury
Kent
United Kingdom
CT3 1LP
Auditor
Azets Audit Services
2nd Floor
32-33 Watling Street
Canterbury
Kent
United Kingdom
CT1 2AN
Bankers
Barclays Bank PLC
30 Tower View
Kings Hill
West Malling
Kent
United Kingdom
ME19 4UY
A C HULME & SONS FARMING LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 35
A C HULME & SONS FARMING LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -
The directors present the strategic report for the year ended 28 February 2023.
Review of the business
The Directors are pleased to report that the group continues to perform well, despite another year of challenges for farming in the UK. Record temperatures and a severe drought tested the resilience of all farmers in 2022 but the diversity of both crops and geography in our business helped and we were able to grow, harvest and market acceptable crops despite inflation affecting our costs of production. As a result the year ended 28 February 2023 saw a further increase in turnover and an acceptable profit despite continued input and commodity volatility around the group's general farming operations and ongoing competition in its key fresh fruit market.
As in previous years, the group has continued to invest across all its farming enterprises and specifically in logistical support for our crops as well as a growing focus on technology to support efficient production and marketing. Further investment will be made over the coming years with a view to achieving year-round profitable packing activity focussed on core home grown crops. The group’s investment in fixed assets increased modestly during the year from £18.1m to over £18.6m after significant investments in all areas of the business in recent financial years. The group continues to invest in planting further orchards to increase home grown volume, efficiency and quality and where appropriate to update plant and machinery within its fruit, livestock and arable enterprises. The Directors and the group’s key employees continually monitor risk which we are seeking to mitigate through investment in our staff as well as efficient and resilient farming activities supported by innovative agri-tech which we believe can aid us in that regard also. We were fortunate to be able to increase our profit this year with income of a non-recurring nature. The group was able to convert a previous agricultural building into a domestic property as well as build three more dwellings on the site. Two of the properties remained unsold at the financial year end but have been subsequently sold. This will be reflected in the 2024 accounts.
The group's working cashflow performance remained strong, particularly the current assets to current liabilities ratio which increased to 3.6 against the previous 2.6. Our operating profit ratio fell this year as our turnover grew but employment, materials, input and energy costs rose rapidly as global events led to almost unprecedented levels of inflation over the course of 2022. Currently we remain largely unable to recover increased costs of production from our customers as the UK cost of living crisis remains ongoing. The Directors have reviewed the group’s depreciation policy and made some changes which are felt to better reflect the useful life of our current farm and packing plant and machinery investments. The Directors remain optimistic that the business will continue to operate profitably over the long term, but will need to continue to make ongoing investments in our people, plant and machinery, buildings and agri-tech to achieve this.
Taking into account the exceptionally adverse trading environment, we consider ourselves fortunate to be able to post a profit before tax that is comparable to the previous year. We have grown our turnover in profitable activities and this is, as always, largely due to our motivated and hard working staff as well as our close working relationships with our customers and suppliers.
The effect of climate change remains at the forefront of the Directors’ crop planning. We continue to look at ways to mitigate ongoing climatic risks, especially water security, and are progressing new cropping opportunities that we believe may succeed in Kent in the future which will diversify our income and risk profile as a business.
Sadly, as previously reported, in September 2022 our youngest Director Edward Hulme passed away very suddenly. This was completely unexpected; however the business has pulled together and this has not materially affected our operations. Appropriate plans for the future of the cattle enterprise, which was formerly Edward’s responsibility, have been put in place and we are confident this will provide continued stability for the company.
Principal risks and uncertainties
The Directors do not envisage any change in the principal risks and uncertainties facing the group which continue to be climatic conditions for the growing of crops, market conditions for the selling of those crops and access to and cost of labour. The Directors remain aware of the importance of health, safety and welfare of all employees, contractors and other visitors to the farm.
A C HULME & SONS FARMING LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
Key performance indicators
The Directors consider cash generated from operations to be the key measure of performance of the business as this is critical to supporting our ongoing investment decisions.
The results of the year ended 28 February 2023 show cash generated from operations of £5,766,962 (2022: £3,107,453).
H L Hulme
Director
28 November 2023
A C HULME & SONS FARMING LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 28 February 2023.
Principal activities
The principal activity of the group was that of mixed farming activities.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Preference dividends were paid amounting to £65,328. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
H L Hulme
T E Hulme
E T Hulme
(Deceased 13 September 2022)
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 auditor of the company 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 auditor of the company is aware of that information.
On behalf of the board
H L Hulme
Director
28 November 2023
A C HULME & SONS FARMING LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
A C HULME & SONS FARMING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF A C HULME & SONS FARMING LTD
- 5 -
Opinion
We have audited the financial statements of A C Hulme & Sons Farming Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 28 February 2023 and of the group's 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 group and parent 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 group's and 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 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 audittrue:
• 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.
A C HULME & SONS FARMING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF A C HULME & SONS FARMING LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent 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 parent 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.
A C HULME & SONS FARMING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF A C HULME & SONS FARMING LTD
- 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;
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 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.
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.
Claire Parry FCA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
28 November 2023
Chartered Accountants
Statutory Auditor
2nd Floor
32-33 Watling Street
Canterbury
Kent
United Kingdom
CT1 2AN
A C HULME & SONS FARMING LTD
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
21,128,269
13,728,611
Cost of sales
(15,564,057)
(9,032,560)
Gross profit
5,564,212
4,696,051
Administrative expenses
(2,502,146)
(1,461,176)
Other operating income
550,093
567,185
Operating profit
4
3,612,159
3,802,060
Share of profits of associates
53,415
90,463
Interest receivable and similar income
7
8,005
458
Interest payable and similar expenses
8
(75,998)
(91,134)
Profit before taxation
3,597,581
3,801,847
Tax on profit
9
(362,301)
(1,335,371)
Profit for the financial year
3,235,280
2,466,476
Profit for the financial year is all attributable to the owners of the parent company.
A C HULME & SONS FARMING LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
2023
2022
£
£
Profit for the year
3,235,280
2,466,476
Other comprehensive income
-
-
Total comprehensive income for the year
3,235,280
2,466,476
Total comprehensive income for the year is all attributable to the owners of the parent company.
A C HULME & SONS FARMING LTD
GROUP BALANCE SHEET
AS AT 28 FEBRUARY 2023
28 February 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
18,424,822
17,870,106
Biological assets
12
231,027
241,845
Investments
14
240
240
18,656,089
18,112,191
Current assets
Stocks
16
2,549,006
3,179,309
Debtors
17
5,132,065
4,709,731
Cash at bank and in hand
3,651,727
1,047,567
11,332,798
8,936,607
Creditors: amounts falling due within one year
18
(3,153,950)
(3,388,708)
Net current assets
8,178,848
5,547,899
Total assets less current liabilities
26,834,937
23,660,090
Creditors: amounts falling due after more than one year
19
(2,413,673)
(2,793,904)
Provisions for liabilities
Deferred tax liability
21
1,673,067
1,767,941
(1,673,067)
(1,767,941)
Net assets
22,748,197
19,098,245
Capital and reserves
Called up share capital
23
2,300,000
1,820,000
Other reserves
14,865,769
14,865,769
Profit and loss reserves
5,582,428
2,412,476
Total equity
22,748,197
19,098,245
The financial statements were approved by the board of directors and authorised for issue on 28 November 2023 and are signed on its behalf by:
28 November 2023
H L Hulme
Director
A C HULME & SONS FARMING LTD
COMPANY BALANCE SHEET
AS AT 28 FEBRUARY 2023
28 February 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
14
1,820,000
1,820,000
Current assets
Debtors
17
480,000
Net current assets
480,000
-
Net assets
2,300,000
1,820,000
Capital and reserves
Called up share capital
23
2,300,000
1,820,000
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £65,328 (2022 - £0 profit).
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 November 2023 and are signed on its behalf by:
28 November 2023
H L Hulme
Director
Company registration number 12257484 (England and Wales)
A C HULME & SONS FARMING LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 12 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 March 2021
2
-
2
Year ended 28 February 2022:
Profit and total comprehensive income
-
-
2,466,476
2,466,476
Issue of share capital
23
1,819,998
-
-
1,819,998
Dividends
10
-
-
(54,000)
(54,000)
Business combinations
-
14,865,769
-
14,865,769
Balance at 28 February 2022
1,820,000
14,865,769
2,412,476
19,098,245
Year ended 28 February 2023:
Profit and total comprehensive income
-
-
3,235,280
3,235,280
Issue of share capital
23
480,000
-
-
480,000
Dividends
10
-
-
(65,328)
(65,328)
Balance at 28 February 2023
2,300,000
14,865,769
5,582,428
22,748,197
A C HULME & SONS FARMING LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 March 2021
2
2
Year ended 28 February 2022:
Profit and total comprehensive income for the year
-
-
Issue of share capital
23
1,819,998
-
1,819,998
Balance at 28 February 2022
1,820,000
1,820,000
Year ended 28 February 2023:
Profit and total comprehensive income
-
65,328
65,328
Issue of share capital
23
480,000
-
480,000
Dividends
10
-
(65,328)
(65,328)
Balance at 28 February 2023
2,300,000
2,300,000
A C HULME & SONS FARMING LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
5,766,962
3,107,453
Interest paid
(75,998)
(91,134)
Income taxes paid
(648,631)
(253)
Net cash inflow from operating activities
5,042,333
3,016,066
Investing activities
Cash acquired in business combination
-
2,147,391
Purchase of tangible fixed assets
(2,270,347)
(4,040,293)
Proceeds on disposal of tangible fixed assets
390,598
167,300
Purchase of non-current biological assets
(19,800)
(15,000)
Proceeds on disposal of non-current biological assets
30,618
29,723
Interest received
8,005
458
Net cash used in investing activities
(1,860,926)
(1,710,421)
Financing activities
Net repayment of bank loans
(511,919)
(204,078)
Dividends paid to equity shareholders
(65,328)
(54,000)
Net cash used in financing activities
(577,247)
(258,078)
Net increase in cash and cash equivalents
2,604,160
1,047,567
Cash and cash equivalents at beginning of year
1,047,567
Cash and cash equivalents at end of year
3,651,727
1,047,567
A C HULME & SONS FARMING LTD
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
27
(480,000)
Investing activities
Dividends received
65,328
Net cash generated from/(used in) investing activities
65,328
-
Financing activities
Issue of preference shares
480,000
-
Dividends paid to equity shareholders
(65,328)
-
Net cash generated from/(used in) financing activities
414,672
-
Net increase in cash and cash equivalents
-
-
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 16 -
1
Accounting policies
Company information
A C Hulme & Sons Farming Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Brook Farm, Staple Road, Canterbury, Kent, United Kingdom, CT3 1LP.
The group consists of A C Hulme & Sons Farming Ltd and all of its subsidiaries.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
The consolidated group financial statements consist of the financial statements of the parent company A C Hulme & Sons Farming Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 28 February 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 17 -
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
1.4
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Income from the Basic Payment Scheme entitlements is conditional upon agri-environmental compliance. This is recognised over the calendar year to which it relates, but only if the specific compliance conditions for that calendar year have been met.
1.5
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.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 18 -
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:
Freehold land and buildings
Land not depreciated / Freehold buildings 2% on cost
Leasehold improvements
4% on cost
Plant and equipment
10% on net book value
Motor vehicles
10% on net book value
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 recognised in the profit and loss account.
1.6
Biological assets include livestock and growing crops.
Biological assets are recognised only when three recognition criteria have been fulfilled:
the entity has control over the asset as a result of past events;
it is probable that future economic benefits associated with the asset will flow to the entity; and
the fair value or cost of the asset can be measured reliably.
Where the company opts to measure a biological asset under the fair value model on initial recognition it must carry the asset at fair value at each reporting date. Changes in fair value less costs to sell are recognised in profit or loss.
Where the company opts to measure agricultural produce harvested from the biological asset it is measured at fair value less costs to sell at the point of harvest.
1.7
Fixed asset investments
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 19 -
1.8
Impairment of fixed assets
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
1.9
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.10
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.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 20 -
1.11
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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 group 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 group after deducting all of its liabilities.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 21 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the group 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 group.
1.13
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 22 -
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 if, and only if, there is 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.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
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 leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.18
The group recognises agricultural produce when, and only when, the group controls the result of past events, it is probable that future economic benefits associated with such assets will flow to the group and the fair value or costs of the assets can be measured reliably. Agricultural produce harvested from the group's biological assets are valued at fair value less cost to sell at the point of harvest. A gain or loss arising on initial recognition of agricultural produce at fair value less costs to sell shall be included in statement of profit or loss for the period in which it arises.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 23 -
1.19
The group operates defined contribution plans for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations.
The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of crops
18,610,294
12,863,356
Sale of livestock
313,560
415,139
Contract work and sundries
514,415
450,116
Sale of property
1,690,000
-
21,128,269
13,728,611
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
21,128,269
13,728,611
2023
2022
£
£
Other revenue
Interest income
8,005
458
Farm subsidies
222,022
241,799
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 24 -
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(2,400)
12,339
Depreciation of owned tangible fixed assets
1,280,421
596,465
Loss/(profit) on disposal of tangible fixed assets
44,612
(6,906)
Operating lease charges
139,336
140,368
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
-
-
Audit of the financial statements of the company's subsidiaries
7,950
6,300
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
3
3
3
3
108
93
-
-
Total
111
96
3
3
Their aggregate remuneration comprised:
Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,997,310
3,152,942
Social security costs
441,126
348,187
-
-
Pension costs
40,169
41,334
4,478,605
3,542,463
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 25 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
8,005
174
Other interest income
-
284
Total income
8,005
458
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
8,005
174
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
75,998
91,134
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
457,175
50,583
Deferred tax
Origination and reversal of timing differences
(94,874)
1,284,788
Total tax charge
362,301
1,335,371
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
9
Taxation
(Continued)
- 26 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
3,597,581
3,801,847
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
683,540
722,351
Tax effect of expenses that are not deductible in determining taxable profit
570
112,164
Permanent capital allowances in excess of depreciation
(216,787)
(766,744)
Adjustments in respect of financial assets
(10,148)
(17,188)
Deferred tax adjustments in respect of prior years
(94,874)
1,284,788
Taxation charge
362,301
1,335,371
10
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
65,328
-
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 27 -
11
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 March 2022
16,273,185
759,249
4,899,580
318,085
22,250,099
Business combinations
Additions
48,835
2,171,937
49,575
2,270,347
Disposals
(29,465)
(501,399)
(25,125)
(555,989)
At 28 February 2023
16,292,555
759,249
6,570,118
342,535
23,964,457
Depreciation and impairment
At 1 March 2022
1,401,096
545,335
2,288,775
144,787
4,379,993
Business combinations
Depreciation charged in the year
292,791
19,980
919,998
47,652
1,280,421
Eliminated in respect of disposals
(5,485)
(104,691)
(10,603)
(120,779)
At 28 February 2023
1,688,402
565,315
3,104,082
181,836
5,539,635
Carrying amount
At 28 February 2023
14,604,153
193,934
3,466,036
160,699
18,424,822
At 28 February 2022
14,872,089
213,914
2,610,805
173,298
17,870,106
The company had no tangible fixed assets at 28 February 2023 or 28 February 2022.
12
Biological assets
Livestock
£
Fair value
At 1 March 2022
241,844
Purchases
19,800
Reclassification
18,523
Sales
(41,142)
Deaths
(7,998)
At 28 February 2023
231,027
13
Subsidiaries
Details of the company's subsidiaries at 28 February 2023 are as follows:
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
13
Subsidiaries
(Continued)
- 28 -
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
A C Hulme and Sons
Brook Farm, Staple Road, Wingham, Canterbury CT3 1LP
Farming
Ordinary
100.00
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
1,820,000
1,820,000
Investments in associates
15
50
50
Unlisted investments
190
190
240
240
1,820,000
1,820,000
Movements in fixed asset investments
Group
Shares in associates
Other investments
Total
£
£
£
Cost or valuation
At 1 March 2022 and 28 February 2023
50
190
240
Carrying amount
At 28 February 2023
50
190
240
At 28 February 2022
50
190
240
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 March 2022 and 28 February 2023
1,820,000
Carrying amount
At 28 February 2023
1,820,000
At 28 February 2022
1,820,000
15
Associates
Details of associates at 28 February 2023 are as follows:
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
15
Associates
(Continued)
- 29 -
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Cre8 Hoaden Limited
United Kingdom
Operation of mobile caravans utilised in the fresh produce industry
Ordinary
50
Investments in associates are accounted for using the equity method.
16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials
439,908
304,579
-
-
Biological assets
649,634
680,557
-
-
Harvested crops
1,459,464
2,194,173
2,549,006
3,179,309
-
-
Biological assets included in stock comprise:
Livestock
Growing Crops
£
£
At March 2022
146,870
533,687
Purchases
-
453,932
Sales of livestock
(83,130)
-
Due to new born
54,300
Resulting from death to livestock
(450)
-
Harvested crops transferred to inventories
-
(496,335)
Transfer between classes
(10,530)
-
Change in fair value due to physical changes
51,290
-
At 28 February 2023
158,350
491,284
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 30 -
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,788,100
3,076,759
Corporation tax recoverable
94,062
Amounts owed by group undertakings
-
-
480,000
-
Amounts owed by undertakings in which the company has a participating interest
143,878
90,463
-
-
Other debtors
193,798
35,674
Prepayments and accrued income
912,227
1,506,835
5,132,065
4,709,731
480,000
-
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
20
375,335
507,023
Trade creditors
1,559,703
1,494,104
Corporation tax payable
97,394
Other creditors
62,270
537,206
Accruals and deferred income
1,156,642
752,981
3,153,950
3,388,708
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
2,413,673
2,793,904
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 31 -
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
2,789,008
3,300,927
Payable within one year
375,335
507,023
Payable after one year
2,413,673
2,793,904
The long-term bank loans are secured by way of legal charges on various freehold land and buildings owned by the group.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
1,673,067
1,767,941
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 March 2022
1,767,941
-
Brought forward in A C Hulme and Sons
-
-
Credit to profit or loss
(94,874)
-
Liability at 28 February 2023
1,673,067
-
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
174
226
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
22
Retirement benefit schemes
(Continued)
- 32 -
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
23
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
20,000
20,000
20,000
20,000
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Redeemable preference of £1 each
1,800,000
1,800,000
1,800,000
1,800,000
Redeemable preference B shares of £1 each
480,000
-
480,000
-
2,280,000
1,800,000
2,280,000
1,800,000
Preference shares classified as equity
2,280,000
1,800,000
Total equity share capital
2,300,000
1,820,000
Ordinary shares
Shareholders have full voting rights (one vote per share), a right to receive dividends (after payment of dividend on redeemable preference shares) and sole right to capital on winding up (after repayment of the redeemable preference shares at par).
Preference shares - A Shares
The shares do not confer any right to attend or vote at members' meetings or on members' written resolutions. If a dividend is declared, shareholders are eligible to receive a 3% non-cumulative dividend in preference to the ordinary shares. The shares rank in priority for repayment and to receive any arrears of non-cumulative dividend but participate no further in any distribution on winding up. The shares are redeemable at par and at the option of the company.
Preference shares - B Shares
During the year the company issued 480,000 £1 redeemable preference B shares at par.
The shares do not confer any right to attend or vote at members' meetings or on members' written resolutions. If a dividend is declared, shareholders are eligible to receive a 2.36% non-cumulative dividend in preference to the ordinary shares. The shares rank in priority for repayment and to receive any arrears of non-cumulative dividend but participate no further in any distribution on winding up. The shares are redeemable at par and at the option of the company.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 33 -
24
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
147,121
274,842
-
-
Between two and five years
198,079
379,008
-
-
In over five years
907,520
1,989,792
-
-
1,252,720
2,643,642
-
-
25
Related party transactions
Transactions with related parties
The directors of the group are also members of Brook Farm Wingham LLP (BFW) and T E Hulme is a director of ACH Imports Ltd (ACHI) and Cre8 Hoaden Limited (CRE).
During the year the group charged £381,043 (2022 - £454,880) to BFW, £709,168 (2022 -£41,253) to ACHI and £49,556 (2022 - £Nil) to CRE. The group made purchases of £785,881 (2022 - £402,548) from BFW, £230,225 (2022 - £Nil) from ACHI and £Nil (2022 - £50,437) from CRE. These sales and purchases were in respect of crop purchases, farm contracting work and management services carried out by the group and were made in the ordinary course of business.
At 28 February 2023 the group was owed £185,473 (2022 - £321,495) by BFW and £38,755 (2022 - £49,504) by ACHI and £20,016 (2022 - £Nil) by CRE. At 28 February 2023 the group owed £131,795 (2022 - £146,091) to BFW and £Nil (2022 - £31,766) to CRE.
Management charges of £50,000 (2022 - £50,000) were charged to BFW. Management charges of £14,733 (2022 - £Nil) were charged to ACHI.
The group leases land and buildings from settlements originally created by one of the group's directors; H L Hulme and his brother H T Hulme. The beneficiaries of these settlements include two of the company's directors, namely T E Hulme and E T Hulme Deceased, and their children. During the year rent totalling £90,045 (2022 - £90,045) was paid by the company to these settlements.
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 34 -
26
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
3,235,280
2,466,476
Adjustments for:
Share of results of associates and joint ventures
(53,415)
(90,463)
Taxation charged
362,301
1,335,371
Finance costs
75,998
91,134
Investment income
(8,005)
(458)
Loss/(gain) on disposal of tangible fixed assets
44,612
(6,906)
Depreciation and impairment of tangible fixed assets
1,280,421
596,465
Movements in working capital:
Decrease/(increase) in stocks
630,303
(1,101,128)
Increase in debtors
(328,272)
(1,455,762)
Increase in creditors
527,739
1,272,724
Cash generated from operations
5,766,962
3,107,453
27
Cash absorbed by operations - company
2023
2022
£
£
Profit for the year after tax
65,328
-
Adjustments for:
Investment income
(65,328)
Movements in working capital:
Increase in debtors
(480,000)
-
Cash absorbed by operations
(480,000)
-
28
Analysis of changes in net funds/(debt) - group
1 March 2022
Cash flows
28 February 2023
£
£
£
Cash at bank and in hand
1,047,567
2,604,160
3,651,727
Borrowings excluding overdrafts
(3,300,927)
511,919
(2,789,008)
(2,253,360)
3,116,079
862,719
A C HULME & SONS FARMING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 35 -
29
Analysis of changes in net funds - company
1 March 2022
28 February 2023
£
£
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