Company registration number SC029454 (Scotland)
David Ritchie (Implements) Limited
Annual report and consolidated financial statements
for the year ended 31 May 2023
David Ritchie (Implements) Limited
Company information
Directors
R Ritchie AI Agr E
D Ritchie
Dr AR Edwards
Secretary
S Blair
Company number
SC029454
Registered office
Carseview Road
Suttieside
Forfar
DD8 3BT
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
David Ritchie (Implements) Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 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 - 36
David Ritchie (Implements) Limited
Strategic report
for the year ended 31 May 2023
- 1 -

The Directors present the strategic report for the year ended 31 May 2023.

Fair review of the business

The business entered the financial year with a strong order book, anticipating a year of growth, and had budgeted accordingly. Investments in our people, plant and machinery, health and safety, and infrastructure were maintained. There were no COVID-19 restrictions in place during the financial year however there has been some continued fallout, notably the reduced availability of labour. Protracted constraints will be a risk and a concern. Overall, the resulting outcomes are considered acceptable. Erratic dynamics in input costs, energy prices, global politics, labour shortages, and the ongoing Brexit situation will continue to have consequences for the Group.

Principal risks and uncertainties

The principal risks and uncertainties affecting the group include the following:

Development and performance

The directors continue to recognise the need for investment and will maintain such investment in staff, equipment, training and infrastructure necessary to support the viability and growth of the Group.

Key performance indicators

The directors rely upon a number of financial KPIs. Turnover fell by 3.5% as a result of difficult trading conditions in some markets, however gross margin % improved as material cost pressures eased.

 

 

2023

2022

 

 

 

Turnover

£14,469,662

£14,987,589

Gross margin %

19%

16%

Operating profit/(loss)

£286,570

£280,668

        

Other financial KPIs such as wage costs and overheads are analysed on a regular basis.

David Ritchie (Implements) Limited
Strategic report (continued)
for the year ended 31 May 2023
- 2 -
Other performance indicators

In assessing business performance, the directors also monitor a number of non-financial measurements, including customer and supplier service levels, distribution efficiency, staff turnover and absence, and health and safety reports.

By order of the board

S Blair
Secretary
29 February 2024
David Ritchie (Implements) Limited
Directors' report
for the year ended 31 May 2023
- 3 -

The Directors present their annual report and financial statements for the year ended 31 May 2023.

Principal activities

The principal activity of the company and group continued to be that of the design, manufacture, surface coating and marketing of a range of agricultural and industrial equipment and machinery.

Directors

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

R Ritchie AI Agr E
D Ritchie
Dr AR Edwards
Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The Directors do not recommend payment of a further dividend.

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.

Strategic Report

Included within the strategic report is an indication of the principal risks and uncertainties including the risks associated with the market conditions, commodity prices, credit, foreign currency, interest and liquidity and legislative and compliance.

By order of the board
S Blair
Secretary
29 February 2024
David Ritchie (Implements) Limited
Directors' responsibilities statement
for the year ended 31 May 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:

 

 

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.

David Ritchie (Implements) Limited
Independent auditor's report
to the members of David Ritchie (Implements) Limited
- 5 -
Opinion

We have audited the financial statements of David Ritchie (Implements) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise 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:

Basis for opinion

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.

Other information

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.

David Ritchie (Implements) Limited
Independent auditor's report (continued)
to the members of David Ritchie (Implements) Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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:

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, are detailed below.

David Ritchie (Implements) Limited
Independent auditor's report (continued)
to the members of David Ritchie (Implements) Limited
- 7 -

As part of our planning process:

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

David Ritchie (Implements) Limited
Independent auditor's report (continued)
to the members of David Ritchie (Implements) Limited
- 8 -

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.

Gavin Black (Senior Statutory Auditor)
For and on behalf of Henderson Loggie LLP
29 February 2024
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
David Ritchie (Implements) Limited
Group statement of comprehensive income
for the year ended 31 May 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
14,469,662
14,987,589
Cost of sales
(11,746,954)
(12,646,501)
Gross profit
2,722,708
2,341,088
Distribution costs
(1,581,608)
(1,405,598)
Administrative expenses
(1,050,591)
(934,761)
Other operating income
196,061
279,939
Operating profit
4
286,570
280,668
Share of profits of joint ventures
58,227
17,775
Interest receivable and similar income
8
271
671
Interest payable and similar expenses
9
(68,834)
(35,640)
Profit before taxation
276,234
263,474
Tax on profit
10
(2,868)
(20,748)
Profit for the financial year
28
273,366
242,726
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

The group statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

David Ritchie (Implements) Limited
Group balance sheet
as at 31 May 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
(28,755)
(43,131)
Tangible assets
12
2,525,123
2,596,858
Investments
13
194,142
135,915
2,690,510
2,689,642
Current assets
Stocks
16
4,329,855
4,344,550
Debtors
17
3,313,432
3,678,186
Cash at bank and in hand
355,297
494,485
7,998,584
8,517,221
Creditors: amounts falling due within one year
18
(2,607,100)
(3,258,697)
Net current assets
5,391,484
5,258,524
Total assets less current liabilities
8,081,994
7,948,166
Creditors: amounts falling due after more than one year
19
(752,771)
(899,235)
Provisions for liabilities
Deferred tax liability
22
(44,825)
(37,899)
Net assets
7,284,398
7,011,032
Capital and reserves
Called up share capital
24
35,000
35,000
Share premium account
25
11,878
11,878
Revaluation reserve
26
34,727
34,727
Capital redemption reserve
27
9,650
9,650
Profit and loss reserves
28
7,193,143
6,919,777
Total equity
7,284,398
7,011,032
The financial statements were approved by the board of directors and authorised for issue on 29 February 2024 and are signed on its behalf by:
Dr AR Edwards
Director
David Ritchie (Implements) Limited
Company Balance sheet
as at 31 May 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,863,240
2,011,068
Investments
13
293,427
680,742
2,156,667
2,691,810
Current assets
Stocks
16
3,634,503
3,754,868
Debtors
17
3,270,426
3,554,038
Cash at bank and in hand
355,251
494,428
7,260,180
7,803,334
Creditors: amounts falling due within one year
18
(2,079,155)
(2,784,439)
Net current assets
5,181,025
5,018,895
Total assets less current liabilities
7,337,692
7,710,705
Creditors: amounts falling due after more than one year
19
(740,771)
(871,235)
Provisions for liabilities
22
-
0
(37,899)
Net assets
6,596,921
6,801,571
Capital and reserves
Called up share capital
24
35,000
35,000
Share premium account
25
11,878
11,878
Revaluation reserve
26
34,727
34,727
Capital redemption reserve
27
9,650
9,650
Profit and loss reserves
28
6,505,666
6,710,316
Total equity
6,596,921
6,801,571

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £204,650 (2022 - £39,178 profit).

The financial statements were approved by the board of directors and authorised for issue on 29 February 2024 and are signed on its behalf by:
Dr AR Edwards
Director
Company Registration No. SC029454
David Ritchie (Implements) Limited
Group statement of changes in equity
for the year ended 31 May 2023
- 12 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 June 2021
35,000
11,878
34,727
9,650
6,677,051
6,768,306
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
-
-
-
242,726
242,726
Balance at 31 May 2022
35,000
11,878
34,727
9,650
6,919,777
7,011,032
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
-
-
273,366
273,366
Balance at 31 May 2023
35,000
11,878
34,727
9,650
7,193,143
7,284,398
David Ritchie (Implements) Limited
Company statement of changes in equity
for the year ended 31 May 2023
- 13 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 June 2021
35,000
11,878
34,727
9,650
6,671,138
6,762,393
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
-
-
-
39,178
39,178
Balance at 31 May 2022
35,000
11,878
34,727
9,650
6,710,316
6,801,571
Year ended 31 May 2023:
Loss and total comprehensive income for the year
-
-
-
-
(204,650)
(204,650)
Balance at 31 May 2023
35,000
11,878
34,727
9,650
6,505,666
6,596,921
David Ritchie (Implements) Limited
Group statement of cash flows
for the year ended 31 May 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
31
286,586
(227,166)
Interest paid
(68,834)
(35,640)
Income taxes (paid)/refunded
(32,246)
55,291
Net cash inflow/(outflow) from operating activities
185,506
(207,515)
Investing activities
Purchase of tangible fixed assets
(147,837)
(90,770)
Proceeds from disposal of tangible fixed assets
11,166
17,795
Interest received
271
671
Net cash used in investing activities
(136,400)
(72,304)
Financing activities
Proceeds from new bank loans
-
250,000
Repayment of bank loans
(111,652)
(98,181)
Payment of finance leases obligations
(89,956)
(174,793)
Net cash used in financing activities
(201,608)
(22,974)
Net decrease in cash and cash equivalents
(152,502)
(302,793)
Cash and cash equivalents at beginning of year
263,858
566,651
Cash and cash equivalents at end of year
111,356
263,858
Relating to:
Cash at bank and in hand
355,297
494,485
Bank overdrafts included in creditors payable within one year
(243,941)
(230,627)
David Ritchie (Implements) Limited
Company statement of cash flows
for the year ended 31 May 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
32
141,287
(205,616)
Interest paid
(54,751)
(24,987)
Income taxes (paid)/refunded
(39,340)
53,322
Net cash inflow/(outflow) from operating activities
47,196
(177,281)
Investing activities
Purchase of tangible fixed assets
(12,202)
(32,524)
Proceeds from disposal of tangible fixed assets
11,166
17,795
Interest received
271
671
Net cash used in investing activities
(765)
(14,058)
Financing activities
Proceeds from new bank loans
-
250,000
Repayment of bank loans
(95,652)
(82,181)
Payment of finance leases obligations
(89,956)
(174,793)
Net cash used in financing activities
(185,608)
(6,974)
Net decrease in cash and cash equivalents
(139,177)
(198,313)
Cash and cash equivalents at beginning of year
494,428
692,741
Cash and cash equivalents at end of year
355,251
494,428
David Ritchie (Implements) Limited
Notes to the financial statements
for the year ended 31 May 2023
- 16 -
1
Accounting policies
Company information

David Ritchie (Implements) Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Carseview Road, Forfar, DD8 3BT.

 

The group consists of David Ritchie (Implements) Limited 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. 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 David Ritchie (Implements) Limited 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 31 May 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.

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 17 -

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

The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the financial projections, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from rising input costs and the likelihood of the UK falling into economic recession. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.

 

Based on these assessments and having regard to the resources available to the company and group, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and 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.

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.

1.5
Intangible fixed assets - goodwill

Negative goodwill is the excess of the Group's share of the fair value of the attributable net identifiable assets at the date of acquisition over the purchase consideration in a business combination.

 

Negative goodwill that can be attributed to monetary assets is recognised as income when the assets are realised. The remaining portion of negative goodwill, not exceeding the fair value of acquired identifiable non-monetary assets, is recognised as income on a straight line basis over its expected useful life of 10 years.

1.6
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.

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:

Land and buildings Freehold
2% straight line
Plant and machinery, etc
10%  to 25% straight line
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 18 -

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.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

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.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 19 -

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.

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.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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.

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 20 -
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.

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.

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.

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 21 -
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

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease 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.

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
1
Accounting policies (continued)
- 22 -
1.17
Government grants

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.

1.18
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.

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provisions

At the end of each financial year, the group makes a provision against obsolete or slow moving stock. Such provisions are calculated using a combination of actual current information and an element of estimation using historical data as a basis.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Principal activity
14,469,662
14,987,589
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
3
Turnover and other revenue (continued)
- 23 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
9,687,448
12,334,924
Europe
3,927,081
2,322,639
North America
208,202
208,713
Rest of World
646,931
121,313
14,469,662
14,987,589
2023
2022
£
£
Other revenue
Interest income
271
671
Grants received
14,673
49,603
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses
8,603
84
Government grants
(14,673)
(49,603)
Depreciation of owned tangible fixed assets
200,007
196,621
Depreciation of tangible fixed assets held under finance leases
80,343
192,332
Profit on disposal of tangible fixed assets
(10,875)
(17,795)
Amortisation of intangible assets
(14,376)
(14,376)
Operating lease charges
122,084
129,222
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
16,345
13,620
Audit of the financial statements of the company's subsidiaries
5,415
4,515
21,760
18,135
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 24 -
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
Average number of employees
124
123
112
110

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,614,595
3,352,793
3,328,865
3,075,329
Social security costs
365,675
314,952
340,350
291,640
Pension costs
161,424
155,718
149,649
139,566
4,141,694
3,823,463
3,818,864
3,506,535
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
147,665
152,551
Company pension contributions to defined contribution schemes
33,340
35,873
181,005
188,424

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 3).

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 25 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
271
671

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
271
671
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
57,843
26,297
Other finance costs:
Interest on finance leases and hire purchase contracts
10,991
9,343
Total finance costs
68,834
35,640
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
86,475
95,585
Adjustments in respect of prior periods
(103,059)
8,247
Total current tax
(16,584)
103,832
Deferred tax
Origination and reversal of timing differences
(36,082)
(57,639)
Changes in tax rates
-
0
(10,761)
Adjustment in respect of prior periods
55,534
(14,684)
Total deferred tax
19,452
(83,084)
Total tax charge
2,868
20,748
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
10
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
276,234
263,474
Expected tax charge based on the standard rate of corporation tax in the UK of 20% (2022: 19%)
55,247
50,060
Tax effect of income not taxable in determining taxable profit
-
0
(4,876)
Tax effect of utilisation of tax losses not previously recognised
-
0
(5,416)
Adjustments in respect of prior years
(103,059)
8,247
Effect of change in corporation tax rate
(7,211)
(24,596)
Permanent capital allowances in excess of depreciation
(3,075)
-
Depreciation on assets not qualifying for tax allowances
18,527
17,600
Deferred tax adjustments in respect of prior years
55,534
(14,684)
Goodwill amortisation
(2,875)
(2,731)
Share of results of joint venture
(11,646)
(3,377)
Margin
1,426
521
Taxation charge
2,868
20,748

The Finance (No.2) Act 2015 reduced the main rate of UK corporation tax to 19% and this was effective from 1 April 2017. A further reduction in the UK corporation tax rate to 17% was expected to come into effect from 1 April 2020 (as enacted by the Finance Act 2016 on 15 September 2016). However, legislation introduced in the Finance Act 2020 (enacted on 22 July 2020) repealed the reduction of corporation tax, maintaining the current rate of 19%.

 

On 3 March 2021, the UK Budget 2021 announcements included measures to support economic recovery as a result of the COVID-19 pandemic. These included an increase to the UK’s main corporation tax rate to 25%, which became effective from 1 April 2023. The corporation tax rate for first 10 months was 19% and for the final 2 months it was 25%, giving an effective corporation tax rate for the group for the year of 20%. The 25% rate was enacted at the balance sheet date and, as a result, the closing deferred tax balances as at 31 May 2023 are recognised at 25% (2022 - 25%).

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 27 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 June 2022 and 31 May 2023
(733,505)
Amortisation and impairment
At 1 June 2022
(690,374)
Amortisation charged for the year
(14,376)
At 31 May 2023
(704,750)
Carrying amount
At 31 May 2023
(28,755)
At 31 May 2022
(43,131)
The company had no intangible fixed assets at 31 May 2023 or 31 May 2022.
12
Tangible fixed assets
Group
Land and buildings Freehold
Plant and machinery, etc
Total
£
£
£
Cost
At 1 June 2022
3,769,585
3,509,791
7,279,376
Additions
-
0
208,906
208,906
Disposals
-
0
(23,816)
(23,816)
At 31 May 2023
3,769,585
3,694,881
7,464,466
Depreciation and impairment
At 1 June 2022
1,602,912
3,079,606
4,682,518
Depreciation charged in the year
76,931
203,419
280,350
Eliminated in respect of disposals
-
0
(23,525)
(23,525)
At 31 May 2023
1,679,843
3,259,500
4,939,343
Carrying amount
At 31 May 2023
2,089,742
435,381
2,525,123
At 31 May 2022
2,166,673
430,185
2,596,858
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
12
Tangible fixed assets (continued)
- 28 -
Company
Land and buildings Freehold
Plant and machinery, etc
Total
£
£
£
Cost
At 1 June 2022
2,848,983
1,623,395
4,472,378
Additions
-
0
73,271
73,271
Disposals
-
0
(23,816)
(23,816)
At 31 May 2023
2,848,983
1,672,850
4,521,833
Depreciation and impairment
At 1 June 2022
1,118,657
1,342,653
2,461,310
Depreciation charged in the year
56,979
163,829
220,808
Eliminated in respect of disposals
-
0
(23,525)
(23,525)
At 31 May 2023
1,175,636
1,482,957
2,658,593
Carrying amount
At 31 May 2023
1,673,347
189,893
1,863,240
At 31 May 2022
1,730,326
280,742
2,011,068

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and machinery, etc
117,918
132,267
117,918
132,267

Included in the cost of the property is land, which not being separately identifiable, and is therefore depreciated. Also included is land of £46,000 (2022 - £46,000) which is separately identifiable and as such is not depreciated.

13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
262,735
650,050
Investments in joint ventures
15
194,142
135,915
30,692
30,692
194,142
135,915
293,427
680,742
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
13
Fixed asset investments (continued)
- 29 -
Movements in fixed asset investments
Group
Shares in joint ventures
£
Cost or valuation
At 1 June 2022
135,915
Share of profit/loss
58,227
At 31 May 2023
194,142
Carrying amount
At 31 May 2023
194,142
At 31 May 2022
135,915
Movements in fixed asset investments
Company
Shares in subsidiaries and joint ventures
£
Cost or valuation
At 1 June 2022 and 31 May 2023
680,742
Impairment
At 1 June 2022
-
Impairment losses
387,315
At 31 May 2023
387,315
Carrying amount
At 31 May 2023
293,427
At 31 May 2022
680,742
14
Subsidiaries

Details of the company's subsidiaries at 31 May 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Forfar Galvanisers Limited
Scotland
Galvanising services
Ordinary
100.00
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 30 -
15
Joint ventures

Details of joint ventures at 31 May 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Weihai Ritchie Hua Engineering
China
Production and sale of machinery parts
Ordinary
50.00
16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
1,798,797
2,124,343
1,103,445
1,534,661
Work in progress
800,560
884,816
800,560
884,816
Finished goods and goods for resale
1,730,498
1,335,391
1,730,498
1,335,391
4,329,855
4,344,550
3,634,503
3,754,868
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,113,319
3,341,187
3,100,454
3,308,585
Corporation tax recoverable
9,517
16,611
-
0
-
0
Other debtors
15,131
8,297
7,437
-
0
Prepayments and accrued income
152,830
276,930
139,900
245,453
3,290,797
3,643,025
3,247,791
3,554,038
Deferred tax asset (note 22)
22,635
35,161
22,635
-
0
3,313,432
3,678,186
3,270,426
3,554,038
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 31 -
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
348,267
332,017
88,326
85,390
Obligations under finance leases
21
68,831
65,842
68,831
65,842
Trade creditors
1,623,913
1,925,327
1,495,906
1,728,175
Corporation tax payable
86,476
142,400
86,476
142,400
Other taxation and social security
86,530
264,402
77,064
255,293
Accruals and deferred income
393,083
528,709
262,552
507,339
2,607,100
3,258,697
2,079,155
2,784,439
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
674,174
788,762
662,174
760,762
Obligations under finance leases
21
55,037
86,913
55,037
86,913
Government grants
23,560
23,560
23,560
23,560
752,771
899,235
740,771
871,235
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
778,500
890,152
750,500
846,152
Bank overdrafts
243,941
230,627
-
0
-
0
1,022,441
1,120,779
750,500
846,152
Payable within one year
348,267
332,017
88,326
85,390
Payable after one year
674,174
788,762
662,174
760,762

Bank borrowings are secured by fixed charges over the assets they relate to and floating charges over the assets of the David Ritchie (Implements) Limited and its subsidiary.

 

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 32 -
21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
68,831
65,842
68,831
65,842
In two to five years
55,037
86,913
55,037
86,913
123,868
152,755
123,868
152,755

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The finance lease creditors are secured over the assets to which they relate.

Finance leases are secured over the assets concerned.

22
Deferred taxation

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
ACAs
45,083
58,249
(31,642)
(26,489)
Tax losses
-
-
-
60,934
Other
(258)
(20,350)
54,277
716
44,825
37,899
22,635
35,161
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
ACAs
-
58,249
(31,642)
-
Other
-
(20,350)
54,277
-
-
37,899
22,635
-
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
22
Deferred taxation (continued)
- 33 -
Group
Company
Movements in the year:
£
£
Liability at 1 June 2022
2,738
37,899
Charge/(credit) to profit or loss
19,452
(60,534)
Liability/(Asset) at 31 May 2023
22,190
(22,635)

 

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
161,424
155,718

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.

24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
35,000
35,000
35,000
35,000

Ordinary shares carry full ownership, voting and equity rights.

25
Share premium account

This reserve includes any premiums received on the issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

26
Revaluation reserve

This is a non-distributable reserve and represents the cumulative effect of revaluations of fixed assets less deferred tax.

27
Capital redemption reserve

This is a non-distributable reserve representing the nominal value of shares following the redemption or purchase of the company's own shares.

David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 34 -
28
Profit and loss reserves

Profit and loss reserves includes all the current and prior period retained profits and losses.

29
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
134,740
72,900
134,740
72,900
Between two and five years
329,529
30,321
329,529
30,321
464,269
103,221
464,269
103,221
30
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
4,780
-
4,780
-
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 35 -
31
Cash generated from/(absorbed by) group operations
2023
2022
£
£
Profit for the year after tax
273,366
242,726
Adjustments for:
Share of results of associates and joint ventures
(58,227)
(17,775)
Taxation charged
2,868
20,748
Finance costs
68,834
35,640
Investment income
(271)
(671)
Gain on disposal of tangible fixed assets
(10,875)
(17,795)
Amortisation and impairment of intangible assets
(14,376)
(14,376)
Depreciation and impairment of tangible fixed assets
280,350
388,953
Movements in working capital:
Decrease/(increase) in stocks
14,695
(1,060,226)
Decrease/(increase) in debtors
345,134
(951,445)
(Decrease)/increase in creditors
(614,912)
1,147,055
Cash generated from/(absorbed by) operations
286,586
(227,166)
32
Cash generated from/(absorbed by) operations - company
2023
2022
£
£
(Loss)/profit for the year after tax
(204,650)
39,178
Adjustments for:
Taxation (credited)/charged
(77,118)
58,014
Finance costs
54,751
24,987
Investment income
(271)
(671)
Gain on disposal of tangible fixed assets
(10,875)
(17,795)
Depreciation and impairment of tangible fixed assets
220,808
322,386
Impairment of investments
387,315
-
Movements in working capital:
Decrease/(increase) in stocks
120,365
(951,430)
Decrease/(increase) in debtors
306,247
(760,420)
(Decrease)/increase in creditors
(655,285)
1,080,135
Cash generated from/(absorbed by) operations
141,287
(205,616)
David Ritchie (Implements) Limited
Notes to the financial statements (continued)
for the year ended 31 May 2023
- 36 -
33
Analysis of changes in net debt - group
1 June 2022
Cash flows
New finance leases
31 May 2023
£
£
£
£
Cash at bank and in hand
494,485
(139,188)
-
355,297
Bank overdrafts
(230,627)
(13,314)
-
(243,941)
263,858
(152,502)
-
111,356
Borrowings excluding overdrafts
(890,152)
111,652
-
(778,500)
Obligations under finance leases
(152,755)
89,956
(61,069)
(123,868)
(779,049)
49,106
(61,069)
(791,012)
34
Analysis of changes in net debt - company
1 June 2022
Cash flows
New loans and finance leases
31 May 2023
£
£
£
£
Cash at bank and in hand
494,428
(139,177)
-
355,251
Borrowings excluding overdrafts
(846,152)
95,652
-
(750,500)
Obligations under finance leases
(152,755)
89,956
(61,069)
(123,868)
(504,479)
46,431
(61,069)
(519,117)
35
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
263,483
262,976
Other information

During the year the company received income from Ritchie Hua Engineering Limited a company with common directors, of £181,297 (2022 - £229,953). Included in accrued income at the year end is £80,000 (2022 - £140,987).

36
Controlling party

There is no single controlling party.

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