ETHICAL_TEA_PARTNERSHIP - Accounts

The directors present their annual report and financial statements for the year ended 30 September 2021.

The principal activity of the company is to promote a thriving tea sector which is socially just and environmentally sustainable.

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

Executive Director’s narrative on annual accounts for year ended 30 September 2021

As a membership organisation ETP relies on membership levies for income which is supplemented by members’ discretionary funding of projects and funds from donor partners, plus a small amount from fee-based work in Kenya. In the year ending 30 September 2021 our income remained healthy, thanks to our loyal members and enabled our diverse activities in seven tea-producing countries, supported by a UK-based secretariat.

We received a COVID grant from the Tower Hamlets council intended to support small companies which we donated to a local social enterprise since ETP did not need the financial support.

Our expenditure is divided between staff and project costs. Inevitably, project costs and related travel were impacted by the pandemic in the financial period. Despite disruptions to planned project work in tea communities, we did mobilise a COVID-19 response in all seven countries and based on local needs members supported this response with additional funding.

Finally, we are carrying forward a surplus of over £1 million and are developing plans to invest this to support our organisation’s mission in the coming years.

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

For the financial year ended 30 September 2021 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.

Ethical Tea Partnership is a private company limited by guarantee incorporated in England and Wales. The registered office is Unit 1.6 The Green House, 244-254 Cambridge Heath Road, London, E2 9DA.

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 financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

Income represents amounts receivable for membership levys and projects.

Project surpluses are recognised on long-term contracts, if the final outcome can be assessed with reasonable certainty, by including in the income and expenditure account turnover and related costs as contract activity progresses.

Income on projects is recognised in the income and expenditure account when the entity has earned the right to recognise the income.

Acquired goodwill is included in the accounts at cost and amortised over its estimated useful life.

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 surplus or deficit.

Equipment purchased with project income will not be capitalised but will be allocated directly to the income and expenditure account.

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’ to all of its financial intruments.

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 instruments, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using effective interest methods unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at market rate of interest. Financial assets are classified as receivable within one year are not amortised.

Financial liabilities 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, are recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.

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.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

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.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at a rate set by the directors in line with reporting requirements. Transactions in foreign currencies are recorded at the rate ruling as set by the directors. All differences are taken to the income and expenditure account.

Taxation

The company has obtained exemption from the Revenue Commissioners in respect of corporation tax, it being a company not carrying on a business for the purposes of making a profit.

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 14 (2020 - 15).

The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £1.

The operating lease commitment figure includes the lease of the building and a photocopier.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

As a direct consequence of the Coronavirus (COVID-19) pandemic there are material uncertainties which may cause doubt on the company's ability to continue trading. These uncertainties have the potential to suppress world demand and therefore any future surplus of the company. However, the directors believe they have sufficient ongoing and new contracts to sustain the company for at least the next 12 months. It has not been possible to quantify or ascertain with any certainty the financial impact of COVID-19, therefore no adjustments have been made to any figures in the accounts as a result of the pandemic.

During the year the company didn't enter into any transactions with related parties.