Harrogate Fairtrade Shop
(A company limited by guarantee)
Report and Financial Statements
For the Year Ending 31 December 2023
Charity number 1164801
Company number: 07097275
Report of the trustees for the year ending 31 December 2023
The trustees present their annual report together with the financial statements of the charity for the year to 31 December 2023 which are also prepared to meet the requirements for a directors’ report and accounts for Companies Act purposes. The financial statements comply with the Charities Act 2011, the Companies Act 2006, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard 102 (effective 1 January 2015).
Structure, governance and management
The Charity is constituted as a company limited by guarantee and its governing document is its Memorandum and Articles of Association.
The charity is managed by the trustees who are also its directors for the purposes of company law. Trustees are nominated by members and elected at the annual general meeting of the company
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Objects
The charity's objects, as stated in its Memorandum of Association are:
a) The prevention or relief of poverty and the relief of suffering and distress in any part of the world.
b) The furtherance of exclusively charitable purposes of such UK registered charities which work directly in relieving or preventing poverty, relieving financial need, hardship, suffering or distress in any part of the world as the trustees see fit.
The principle of the fair trade movement is that producers and manufacturers in developing countries receive a fair price for their products and the charity aims to achieve its first object by selling goods produced and sourced in accordance with the principles of the World Fair Trade Organisation. That this generates the public benefit of alleviating or preventing the poverty of the producers was agreed by the Charity Commission in correspondence culminating in the registration of the Charity on 10 December 2015.
While making a profit is not the primary purpose of the Charity, it is necessary that its trading is profitable in order to ensure its long-term survival. The second object allows any excess profits not required for the maintenance of the Charity’s activities to be donated to other charities working in the field of the relief of poverty.
Activities
The principal activity of the company is the sale of fair trade goods through its shop in a porch of St Peter’s Church in the centre of Harrogate.
The shop is staffed by volunteers, some of whom are members and some of whom are trustees. All volunteers are invited and encouraged to become voting members at no cost. The volunteers are organised by our shop manager who is supported by an assistant, both of whom are paid and work part-time.
Fair trade goods are also sold by members and others through stalls in local churches, schools etc. Apart from the income stalls generate, they are of course a useful way of raising awareness of fair trade. Alongside this, some of our trustees and members and our shop manager have undertaken outreach work in churches and schools from time to time and a new trustee has recently provided the impetus to make this a more frequent activity, though at little or no cost to the charity.
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In 2020 the first steps were taken to sell our goods online and the online shop was further developed in 2021. While the small amount of income generated through this channel has yet to cover costs, the online shop functions effectively as a website to display our goods and principles to the outside world both near and far.
The only source of income of the Charity is the sale of fair trade goods as described above. Donations are not sought and any donations made by customers in the small collecting box in the shop, and occasionally by other persons, are passed directly to Transform Trade (formerly Traidcraft Exchange), a charity registered in England and Wales.
Similarly, none of the goods sold are donated, as is the case with the majority of “charity shops” and the main expense of the trade is the purchase of goods for resale. It is actually the purchase of fair trade goods, rather than the sale, which generates the public benefit but of course the enterprise would not continue very long if the purchased goods were not sold to the public to provide fresh working capital to buy new stock.
Financial Review
As reported last year, sales exceeded the threshold for VAT registration in 2022 and, as anticipated, the requirement to account for and pay VAT made a significant impact on the net profit in 2023, reducing it to only £166. As noted previously however, our primary object is to sell fairtrade goods on behalf of the producers, so although we strive to maximise our sales, even a small net profit will allow us to remain viable and continue to meet that object.
The requirement to present figures in the accounts net of VAT in accordance with standard accounting practice also has an effect on the appearance of the accounts, in particular that the sales figures, being net of VAT, are not directly comparable with those for the previous year. This will resolve itself in the 2024 accounts when both years will be shown net and, for this year, note 3 to the accounts shows the 2023 figures inclusive of VAT for a direct comparison.
On this basis gross total sales at £94194 were 5.5% up on those for 2022. In the light of the cost of living crisis and the much worse results reported by other fair trade shops around the country this is considered to be very satisfactory.
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Reserves
In 2022 the trustees decided that, instead of making outright donations of the bulk of the annual profit, the sum voted by the AGM should be added to the deposit with the Shared Interest Society, which uses the deposits of its investors to provide loans and credit facilities to primarily fair trade businesses.
This deposit is identified as our Business Development Reserve and thus the Shared Interest account fulfils the purpose of applying our surplus funds to benefit fair trade producers while remaining available should an opportunity be found to expand our business activities in the future. It should be noted however that the deposit is not covered by the Financial Services Compensation Scheme (FSCS) and is therefore at risk.
The general reserve is required to ensure continuity of trading through the quiet first nine months of the year when funds are always run down and to provide sufficient liquidity to enable restocking prior to the opening of the Christmas Shop in early October. Approximately 60% of sales and all the annual profit is generated in the period leading up to Christmas.
In view of the very small profit this year and the fact that the total on current account is somewhat below what it was at the end of the previous year, the trustees propose that no transfer be made to the Shared Interest account / Business Development Reserve.
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Reference and Administrative details
Charity name: Harrogate Fairtrade Shop Registered charity number: 1164801 Registered company number: 07097275 Registered office: Community House 46 – 50 East Parade Harrogate HG1 5RR
Directors and trustees
The directors of the charitable company (the charity) are its trustees for the purpose of charity law. The trustees and officers serving during the year and since the year end were as follows:
Dr Gillian Parkin Chair David Seaman Treasurer Resigned as a trustee 29/05/2023 but continues to act as treasurer Judith Simpson Resigned 17/04/2023 Rachel Batchelor Resigned 26/01/24 Diane Maguire Roger Elliott Zoe Robinson Appointed 29/09/2023
None of the trustees receive remuneration or other benefits from their work with the charity.
This report has been approved by the trustees and is signed on their behalf
Dr Gillian Parkin Chair
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HARROGATE FAIRTRADE SHOP
Company limited by guarantee No 07097275
Charity No 1164801
BALANCE SHEET AT 31 DECEMBER 2023
| Fixed Assets Computer and Till Equipment Fixtures & Fittings Current Assets Cash at Bank Co-operative Bank Cash at Bank CAF Bank Cash at Bank Shared Interest Society Cash in Hand Stock Debtors Current Liabilities Creditors and Accruals Net Assets Reserves Harrogate Fair Trade Group Funds Business Development Reserve General Reserve |
31 December 2023 250 170 420 24932 9961 18736 222 22000 470 76321 -6019 70722 1511 18736 50475 70722 |
31 December 2022 330 230 560 7625 28669 11730 516 22300 536 71376 -2196 69740 0 Note 1 11730 Note 2 58010 69740 |
|---|---|---|
Harrogate Fairtrade Shop Trustees Annual Report 2023 Page 6 | 9
HARROGATE FAIRTRADE SHOP Company limited by guarantee No 07097275 Charity No 1164801
TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st DECEMBER 2023
| Year to | Year to | ||||
|---|---|---|---|---|---|
| 31/12/2023 | 31/12/2022 | ||||
| Shop sales (card) | 61980 | 69312 | |||
| Shop sales (cash) | 12663 | 74643 | 14550 | 83862 | |
| Online sales | 1346 | 1950 | |||
| Stalls etc | 4220 | 3512 | |||
| Total Sales | 80209 | Note 3 | 89324 | ||
| Cost of Sales | 43189 | 51395 | |||
| Gross profit | 37020 | 37929 | |||
| Employee costs | 26072 | 18963 | |||
| Rent & Rates | 5916 | 5754 | |||
| Credit Card Fees (Shop) | 1110 | 1049 | |||
| Online sales expenses | 613 | 1118 | |||
| Electricity | 741 | 493 | |||
| Music licences | 382 | 414 | |||
| Insurance | 305 | 349 | |||
| BAFTS Conference | 344 | 229 | |||
| WiFi charges | 270 | 311 | |||
| Consumables and Sundries | 242 | 244 | |||
| Subscriptions & fees | 195 | 96 | |||
| Bank charges | 121 | 161 | |||
| Window cleaning | 104 | 100 | |||
| Recycling charges | 86 | 49 | |||
| Refreshments | 73 | 0 | |||
| Transport of Stock | 57 | 0 | |||
| Postage, Phone & Stationery | 51 | 43 | |||
| Microsoft licence | 20 | 0 | |||
| Gifts | 12 | 163 | |||
| Small equipment purchase & repair | 0 | 219 | |||
| Harrogate BID | 0 | 360 | |||
| Consultancy | 0 | 300 | |||
| Depreciation | 140 | 36854 | 220 | 30635 | |
| Net Profit / Loss | 166 | 7294 | |||
| PROFIT AND LOSS Balance b/f 58010 |
ACCOUNT | 51437 | |||
| Profit / Loss for the year | 166 | 7294 | |||
| Interest | 42 | 28 | |||
| Donation Christmas Card profit |
-737 | Note 4 | 0 | ||
| To Business Development Reserve | -7006 | Note 2 | -749 | ||
| Balance c/f | 50475 | 58010 |
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HARROGATE FAIRTRADE SHOP
Notes to the 2023 Accounts
Note 1 Harrogate Fair Trade Group Funds
The Harrogate Borough Fair Trade Group was wound up during the year and transferred its remaining funds to HFTS to be used to promote Fair Trade locally. A small amount was spent during the year and the balance of £1511 is carried forward.
Note 2 Business Development Reserve
The Shared Interest account is identified as our Business Development Reserve. A further £7000 was transferred to the account from General Reserve accordance with the resolution of the 2023 AGM and, in addition, a small amount of interest accrued.
Note 3 Comparision of trading figures with 2022
Sales crossed the threshold for registration for VAT for the first time in December 2022 and we began accounting for VAT from 1 February 2023.
In accordance with accounting standards, sales, purchases and expenses for 2023 are stated net of VAT which results in the figures not being directly comparable with those for 2022.
The gross trading figures, shown below, provide a direct comparision.
| Shop sales (card) Shop sales (cash) Online sales Stalls etc Total Sales |
72787 14871 |
Year to 31/12/2023 87658 1580 4956 94194 |
69312 14550 |
Year to 31/12/2022 83862 1950 3512 89324 |
|---|---|---|---|---|
Note 4 Christmas Card profit
Prior to Christmas 2022 the trustees approved the production of our own Christmas card and agreed that the profits from sales of the cards should be donated toTransform Trade, previously known as Traidcraft Exchange.
A payment of £800 was made, representing the contents of the Transform Trade collecting box plus the profit on the cards, slightly rounded up to £737.
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Independent Examiner's Report to the Trustees of Harrogate Fairtrade Shop {'the Company.) I report to the charity trustees on my examination of the accounts of the Company for the year ended 31 December 2023, as set out on pages 6 to 8 of your report. Responsibilities and basis of report As the charity's trustees (who are also the directors of the Company for the purposes of company law), you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ("the 2006 Acf). Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination. I report in respect of my examination of your charity's accounts as carried out under section 145 of the Charities Act 2011 ("the 2011 Act")- In carrying out my examination. I have followed the Directions given by the Charity Commission under section 145{5)(b) of the 2011 Act. Independent examiner's statement I have completed my examination. I confirm that no material matters have come to my attention in connection with the examination giving me cause to believe- accounting records were not kept in respect of the Company as required by section 386 of the Companies Act 2006., or 2. the accounts do not accord with those records., or 3. the accounts do not comply with relevant accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a 'true and fair, view which is not a matter considered as part of an independent examination., or 4. the accounts have not been prepared in accordance with the methods and principles of the Charities SORP (FRS102). I have no concems and have come across no other malters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached. Signed: Date: April 2024 Karen Washer ACA Harrogate Harrogate Fairtrade Shop Trustees Annual Report 2023 Page919