JUST_TRADING_SCOTLAND_LIM - Accounts

The directors present their annual report and financial statements for the year ended 31 January 2023.

2022 was a difficult year for everyone in every part of the world. For JTS, we are trading in times of financial hardship in the UK. For our producer partners, the effects of the Ukraine war have been huge, with issues surrounding the cost of oil particularly challenging.

However, we have continued to grow in terms of sales with overall sales up 7% to £398,741 from £371,554 in 2022. Gross profit was negatively impacted by stock write off linked to cancelled customer orders and only increased slightly to £145,547 with a gross profit percentage of 37% (2022 39%).

The governance of the JTS continues to improve, with Board members taking on tasks in their areas of expertise and ensuring a clear focus on delivering against the aim of sustainability through trade by 2025-26. Our Board continues to monitor progress against our business plan through KPI reports and meets at least quarterly to consider risks and other matters of governance and to review the overall financial status of the organisation.

The hard work and commitment of our team was recognised when they were short-listed for the Scottish Social Enterprise of the Year award and the UK Social Enterprise Team of the year. We were pleased to be able to provide opportunities for staff members to grow in their roles and, as face-to-face events became more common again, it has been encouraging to see team members representing JTS at a variety of events.

We were very pleased to be invited to be part of Central Cooperative’s “Our Malawi Partnership”, a very significant five year initiative that includes supplying rice to their stores in Central England. We have strengthened our connections with other fair trade businesses, jointly hosting a “Farmers on the Frontline” event during Fairtrade Fortnight and launching an “and Friends” section on our online shop in the autumn, thereby offering our customers a wider range of fair trade products.

We continue to be totally committed to delivering as a fair trade business, putting the producers at the centre of this. We were sad when Traidcraft went into administration, both for their staff and the effect on JTS of a forced write-off of the bad debt and a loss of future sales.

Whilst we received further support from the Trust and continued to benefit from the Adapt & Thrive grant secured in 2021, we were unsuccessful in securing new grant income to support our growth. Combined with debt write off linked to the closure of Traidcraft, this resulted in a loss of £55,063 for the year highlighting the need for continued focus on our journey to sustainability. We again received loan support from Social Investment Scotland, a crucial factor in our ability to provide pre-finance to our producers many months in advance of receiving and selling their goods.

Throughout 2022, the JTS team was busy listening to producers and customers and working on plans for growth. As a result, we were thrilled early in the new financial year to unveil True Origin as our new brand that we will start using across the current JTS range from May 2023.

The relationship between JTS and our parent charity, the Balmore Trust, is reaping dividends for our producers with capacity building projects being the Trust’s main focus. Development work continues in Malawi and Kenya through a number of small projects including Grace’s Briquette Project (seeking to make fuel briquettes from rice husks) and a project to support Meru Herbs in applying for membership of WFTO.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Just Trading Scotland Limited for the year ended 31 January 2023 which comprise the profit and loss account, the balance sheet and the related notes from the company’s accounting records and from information and explanations you have given us.

As a practising member firm of the ICAS we are subject to its ethical and other professional requirements which are detailed at https://icas.com/icas-framework-preparation-of-accounts.

Our work has been undertaken solely to prepare for your approval the financial statements of Just Trading Scotland Limited and state those matters that we have agreed to state to the Board of Directors of Just Trading Scotland Limited, as a body, in this report in accordance with the requirements of the ICAS as detailed at https://icas.com/icas-framework-preparation-of-accounts. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Just Trading Scotland Limited and its Board of Directors as a body, for our work or for this report.

It is your duty to ensure that Just Trading Scotland Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Just Trading Scotland Limited. You consider that Just Trading Scotland Limited is exempt from the statutory audit requirement for the year.

We have not been instructed to carry out an audit or a review of the financial statements of Just Trading Scotland Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 January 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Just Trading Scotland Limited is a private company limited by shares incorporated in Scotland. The registered office is Unit 4, Greenlaw Industrial Estate, Wallneuk Road, Paisley, UK, PA3 4BT.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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 company will continue to be supported by the Balmore Trust and the JTS Directors having considered this and made due enquiries, continue to adopt the going concern basis in preparing the financial statements which assumes that the company will continue in operation for the foreseeable future. true

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.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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.

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.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, 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.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

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.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The average monthly number of persons (including directors) employed by the company during the year was: