Company registration number SC561247 (Scotland)
RTS FORESTRY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
RTS FORESTRY LIMITED
COMPANY INFORMATION
Directors
Norman P O'Neill
Harry C Wilson
Ross F Kennedy
Secretary
Harry C Wilson
Company number
SC561247
Registered office
Earnside House
Muthill Road
Crieff
Perthshire
PH7 4HQ
Auditor
Azets Audit Services
5 Whitefriars Crescent
Perth
United Kingdom
PH2 0PA
RTS FORESTRY LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 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 - 33
RTS FORESTRY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -

The directors present the strategic report for the year ended 30 September 2023.

Fair review of the business

2023 has seen the company continue to build on the success of the previous year reporting our strongest turnover and profit levels to date. It is particularly pleasing to note that each division contributed to the overall result and have combined strong in year performance with further development of the client portfolio and future order book. All staff share deserved credit for this achievement and their continued commitment to both the company and our clients.

 

We are pleased to note across the company a strong level of staff retention. It is also encouraging to see the high levels of professional competence within our recent recruits and indeed with many of the job applicants approaching RTS Forestry. This provides the opportunity to further improve our service levels to existing clients and to both explore and deliver on those new business opportunities, which remain significant across our industry.

 

2023 saw the company's management team increase by seven across both senior managers and trainees/students. We have a strong tradition of growing our senior management team from within and the calibre of the new entrants and development of other staff suggests we will continue to deliver on this aspiration. To support our work portfolio we also recruited four additional administration team members, which reflects both our continued commitment to delivering a high standard of client and company reporting while also ensuring the important support function to the management team.

 

The year has seen both increased turnover and importantly client development and retention from each of the company's four offices in Crieff, Hexham, Inverness and Inverurie.

 

Following employee liaison the team in North East Scotland relocated office from Aboyne to Inverurie, this move provided increased office space, better reflected client geographic spread and most importantly will assist in staff recruitment and retention through providing more options for accommodation and partner employment. Despite this minor disruption the Inverurie office delivered a very strong performance, utilising the new staff to develop the client portfolio across forest management and harvesting whilst still delivering an exceptionally strong financial performance.

 

Our Inverness office continued to develop with additional staff and client base. Even though only having this office for 2 years, this period and the strength of the local professional management team is leading to an expanded forest portfolio under RTS management. As with other offices/geographic locations these new clients have come both through collaboration with the forest investment companies, and directly with individual forest owners. Both have welcomed the increased presence of RTS Forestry within the Highlands and this new option for the delivery of forest management in North and West Scotland. We view this geographic region as having considerable growth potential for the company.

 

Hexham has had another successful year and is benefiting from further recruitment in staff covering North England and South Scotland. Our increased management portfolio for the Hexham office is sourced from a strong good mix of investment forestry companies, renewable energy organisations and private individuals. While the lack of new forest planting in England still frustrates, to their credit the Hexham team have continued to secure new woodland management opportunities on both sides of the border.

 

Our Crieff Head office has benefitted from additional administration and management staff and has seen new clients appointing RTS to manage their forests, with the company's overall forest portfolio now exceeding 37,000 Ha. The addition of specialist administrative support staff in finance, conformance and specific major project administration support based in Crieff is already showing benefits across all offices and divisions.

 

 

Renewable Energy/Grid Consultancy has continued to deliver a strong performance for the company with the client base in terms of both developers and larger broad base consultancies engaging RTS services. We have a relatively unique offering in this sphere, being both experienced in the planning/development but additionally providing in house practical delivery expertise through the Infrastructure Division. We are seeing a widening portfolio of clients in both consultancy and delivery which reflects the company's profile as a market leader in both the provision of professional forestry consultancy support and the delivery of the associated works of tree clearance, roading and site restoration.

RTS FORESTRY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
The Renewable Energy/Infrastructure project delivery division (Infrastructure) has enjoyed a strong performance. The company took the decision to provide increased staff to this division in recent years to support multiple projects of scale, the results from this Division are showing this was the correct decision. The Infrastructure Division has a strong order book for the upcoming year and we anticipate further recruitment and development.
RTS was initially founded, 40 years ago, as a Harvesting and Marketing company and this Division continues to report strong figures with increased turnover financially and tonnage yield. The harvesting division continues to deliver harvesting activities both for long term established forest owning clients and also through purchases on the open market of standing timber sales. 2023 has seen additional staff recruitment into the Harvesting and Marketing teams both in Inverurie and Crieff. The Aboyne/Inverurie team have been heavily engaged in works resulting from Storm Arwen, which are beginning to reduce. However to their credit the management team have utilised this increased market presence to build market share, with a strong order book for 2024.
RTS Woodfuel , company's biomass and firewood business has enjoyed its strongest ever annual performance with a significant increase in sales delivering a healthy contribution to the company's overall net profit. Increased sales were delivered due both to a combination of increased market share and the improved performance of several key biomass installations. The company now has a client base of over 120 individual users of varying scale which brings welcome continuity of demand. RTS Woodfuel are active in providing larger clients with performance data whereby they were able to understand the environmental and financial benefits of improving the performance of existing systems, this has brought associated additional usage. A further additional benefit to our company was seen in the conversion of pellet using biomass boilers to woodchip as a result of the embargo on Russian imports of woodchip (Russia historically was the largest importer of pellets to the UK) .
It is important to acknowledge the significant contribution this year of the Administration team within RTS Forestry. As the company has continued to grow, the benefit of a well-organized and run administration support team is fully recognized. This not only protects the company's financial interests throughout the year but also provides our clients with accurate and timely reporting on our activities within their forests. The improvements in administration also has the knock on benefit to the company of affording the forest managers more time to deliver onsite services to our clients with confidence in the high standards of reports being provided.
Principal risks and uncertainties

As always, reliability of procurement, commodity purchase and sales prices, credit exposures and operational performance will continue to present elements of risk and uncertainty.

 

Scottish Forestry as a Scottish Government department charged with granting of the forestry permissions required for our delivery of many projects continues to suffer from low staff recruitment and retention. RTS and our tree planting clients continue to be frustrated by the delays in achieving approval for tree planting through the FGS grant system This continues to be a key constraint to the whole forest industry and one which requires to be addressed by Government led proactive support. Senior managers within the company continue to lobby Scottish Forestry and Government officials to try and resolve this issue. Our continued membership of Confor and SLF has also been important in seeking support for this issue of lack of Scottish Foresty resource.

 

The Board of directors supplemented by the senior management team regularly review these factors through risk management framework and utilises a range of tools and techniques to mitigate risk exposure including:

 

1. Demand forecasting and stock - holding policies

2. Investment in staff and training

3. Long term contractual relationships with reliable and proven joint venture partners

4. Sales price monitoring

5. Credit management

6. Clearly defined and measured operational responsibilities

7. Close management of service providers

8. Health and safety environment policy frameworks

 

The company remains committed to ensuring high standards of performance in relation to health, safety and environment.

RTS FORESTRY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
Key performance indicators

The Board of Directors monitor operating and financial performance of the company on an ongoing basis through the use of key performance indicators (KPIs). These KPIs include measures of product costs and margin, operational efficiency, stock management effectiveness with profit and cash performance.

Future Developments

Following a successful strategy of staff recruitment the senior management team will continue to liaise with the various Forestry universities to encourage the uptake of forestry careers across the country. This has already proven to also deliver a flow of good new staff to the company by way of student placements leading to exposure to RTS and recruitment following graduation. With this model and current staffing the company is in a strong position to deliver the targeted continued growth and development of our business.

On behalf of the board

Norman P O'Neill
Director
20 February 2024
RTS FORESTRY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 30 September 2023.

Principal activities

The principal activity of the company continued to be that of a holding company.

 

The principal activities of the subsidiary continued to be that of:

 

1. Harvesting and Marketing

2. Contracting

3. Forestry Consulting

4. Forest Management

5. Biomass Woodfuel

Results and dividends

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

Ordinary dividends were paid amounting to £197,508. The directors do not recommend payment of a further dividend.

Directors

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

Norman P O'Neill
Harry C Wilson
Ross F Kennedy
Auditor

Azets Audit Services were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
Norman P O'Neill
Director
20 February 2024
RTS FORESTRY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 5 -

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.

RTS FORESTRY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RTS FORESTRY LIMITED
- 6 -
Opinion

We have audited the financial statements of RTS Forestry Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 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.

Opinions on other matters prescribed by the Companies Act 2006

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

RTS FORESTRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RTS FORESTRY LIMITED
- 7 -
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.

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.

RTS FORESTRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RTS FORESTRY LIMITED
- 8 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

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.

Neil Morrison (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
20 February 2024
Chartered Accountants
Statutory Auditor
5 Whitefriars Crescent
Perth
United Kingdom
PH2 0PA
RTS FORESTRY LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
24,269,452
21,723,907
Cost of sales
(21,655,530)
(20,079,323)
Gross profit
2,613,922
1,644,584
Administrative expenses
(1,227,624)
(863,830)
Other operating income
4,113
4,147
Operating profit
4
1,390,411
784,901
Interest receivable and similar income
7
3,991
3,458
Interest payable and similar expenses
8
(34,129)
(5,182)
Profit before taxation
1,360,273
783,177
Tax on profit
9
(337,314)
(86,573)
Profit for the financial year
1,022,959
696,604
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.
RTS FORESTRY LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
230,478
299,665
Tangible assets
12
1,963,297
1,816,092
2,193,775
2,115,757
Current assets
Stocks
15
1,318,633
1,234,890
Debtors
16
5,099,850
5,183,239
Cash at bank and in hand
352,887
111,575
6,771,370
6,529,704
Creditors: amounts falling due within one year
17
(5,729,317)
(5,852,511)
Net current assets
1,042,053
677,193
Total assets less current liabilities
3,235,828
2,792,950
Creditors: amounts falling due after more than one year
18
(254,232)
(635,719)
Provisions for liabilities
Deferred tax liability
21
186,323
187,409
(186,323)
(187,409)
Net assets
2,795,273
1,969,822
Capital and reserves
Called up share capital
24
6
6
Share premium account
435,597
435,597
Profit and loss reserves
2,359,670
1,534,219
Total equity
2,795,273
1,969,822
The financial statements were approved by the board of directors and authorised for issue on
20 February 2024
2024-02-20
and are signed on its behalf by:
Norman P O'Neill
Director
Company registration number SC561247 (Scotland)
RTS FORESTRY LIMITED
COMPANY BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
13
1,459,280
1,459,280
Current assets
Debtors
16
85,008
48,148
Cash at bank and in hand
1,215
3,599
86,223
51,747
Creditors: amounts falling due within one year
17
(11,958)
(11,332)
Net current assets
74,265
40,415
Net assets
1,533,545
1,499,695
Capital and reserves
Called up share capital
24
6
6
Share premium account
435,597
435,597
Profit and loss reserves
1,097,942
1,064,092
Total equity
1,533,545
1,499,695

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's profit for the year was £221,108 (2022 - £174,686).

The financial statements were approved by the board of directors and authorised for issue on
20 February 2024
2024-02-20
and are signed on its behalf by:
Norman P O'Neill
Director
Company registration number SC561247 (Scotland)
RTS FORESTRY LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2021
6
435,597
963,115
1,398,718
Year ended 30 September 2022:
Profit and total comprehensive income
-
-
696,604
696,604
Dividends
10
-
-
(125,500)
(125,500)
Balance at 30 September 2022
6
435,597
1,534,219
1,969,822
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
1,022,959
1,022,959
Dividends
10
-
-
(197,508)
(197,508)
Balance at 30 September 2023
6
435,597
2,359,670
2,795,273
RTS FORESTRY LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2021
6
435,597
1,014,906
1,450,509
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
-
174,686
174,686
Dividends
10
-
-
(125,500)
(125,500)
Balance at 30 September 2022
6
435,597
1,064,092
1,499,695
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
231,358
231,358
Dividends
10
-
-
(197,508)
(197,508)
Balance at 30 September 2023
6
435,597
1,097,942
1,533,545
RTS FORESTRY LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,443,565
817,567
Interest paid
(34,129)
(5,182)
Income taxes paid
(142,884)
(159,737)
Net cash inflow from operating activities
1,266,552
652,648
Investing activities
Purchase of tangible fixed assets
(471,037)
(446,447)
Proceeds from disposal of tangible fixed assets
9,065
137,275
Interest received
3,991
-
0
Net cash used in investing activities
(457,981)
(309,172)
Financing activities
Repayment of borrowings
(88,443)
-
0
Repayment of bank loans
(27,440)
(53,005)
Payment of finance leases obligations
(253,868)
(81,078)
Dividends paid to equity shareholders
(197,508)
(125,500)
Net cash used in financing activities
(567,259)
(259,583)
Net increase in cash and cash equivalents
241,312
83,893
Cash and cash equivalents at beginning of year
111,575
27,682
Cash and cash equivalents at end of year
352,887
111,575
RTS FORESTRY LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
28
5,518
(6,477)
Income taxes paid
(7,902)
(7,336)
Net cash outflow from operating activities
(2,384)
(13,813)
Investing activities
Dividends received
197,508
141,000
Net cash generated from investing activities
197,508
141,000
Financing activities
Dividends paid to equity shareholders
(197,508)
(125,500)
Net cash used in financing activities
(197,508)
(125,500)
Net (decrease)/increase in cash and cash equivalents
(2,384)
1,687
Cash and cash equivalents at beginning of year
3,599
1,912
Cash and cash equivalents at end of year
1,215
3,599
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 16 -
1
Accounting policies
Company information

RTS Forestry Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Earnside House, Muthill Road, Crieff, Perthshire, PH7 4HQ.

 

The group consists of RTS Forestry 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. The principal accounting policies adopted are set out below.

1.2
Business combinations

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.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company RTS Forestry 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 30 September 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 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.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the truegroup has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
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.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Heritable property
4% straight line on buildings, land not depreciated
Long leasehold property
Straight line over the life of the lease
Plant and machinery
10%/20%/25%/50% straight line
Fixtures and equipment
15%/33% straight line
Motor vehicles
25% straight line
Tractors and trailers
25% straight line

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.

1.8
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.

1.9
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.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

 

Work in progress is stated at cost after making provision for any known losses.

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.

1.11
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.

1.12
Financial instruments

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

 

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

 

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

Basic financial assets

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

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.13
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.

1.14
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.

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.

1.15
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.

1.16
Retirement benefits

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

1.17
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 profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 22 -

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

1.18
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.

2
Judgements and key sources of estimation uncertainty

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

 

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

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Harvesting
13,223,206
12,826,290
Management
7,447,529
6,138,047
Woodfuel
3,598,717
2,759,570
24,269,452
21,723,907
2023
2022
£
£
Other revenue
Interest income
3,991
3,458
Grants received
4,113
4,147
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(4,113)
(4,147)
Depreciation of owned tangible fixed assets
259,499
139,719
Depreciation of tangible fixed assets held under finance leases
103,328
188,008
Profit on disposal of tangible fixed assets
(9,065)
(1,098)
Amortisation of intangible assets
69,187
69,187
Operating lease charges
94,357
69,820
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
1,650
3,575
Audit of the financial statements of the company's subsidiaries
15,692
15,400
17,342
18,975
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
Directors
3
3
-
-
Management and office staff
5
5
-
-
Operational staff
37
35
-
-
Total
45
43
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,480,095
1,300,242
-
0
-
0
Social security costs
143,393
130,723
-
-
Pension costs
254,321
217,039
-
0
-
0
1,877,809
1,648,004
-
0
-
0
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 24 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
3,991
3,458
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
34,129
5,698
Other finance costs:
Interest on finance leases and hire purchase contracts
-
(516)
Total finance costs
34,129
5,182
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
338,400
142,884
Adjustments in respect of prior periods
-
0
(4,983)
Total current tax
338,400
137,901
Deferred tax
Origination and reversal of timing differences
(1,086)
(51,328)
Total tax charge
337,314
86,573
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
9
Taxation
(Continued)
- 25 -

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
1,360,273
783,177
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
340,068
148,804
Tax effect of expenses that are not deductible in determining taxable profit
732
332
Tax effect of income not taxable in determining taxable profit
(2,265)
(209)
Adjustments in respect of prior years
-
0
(4,982)
Amortisation on assets not qualifying for tax allowances
-
0
10,865
Tax at marginal rate
(31,705)
-
0
Effect of capital allowances and depreciation
31,570
(16,909)
Movement in deferred tax
(1,086)
(51,328)
Taxation charge
337,314
86,573
10
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
197,508
125,500
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 26 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 October 2022 and 30 September 2023
661,866
Amortisation and impairment
At 1 October 2022
362,201
Amortisation charged for the year
69,187
At 30 September 2023
431,388
Carrying amount
At 30 September 2023
230,478
At 30 September 2022
299,665
The company had no intangible fixed assets at 30 September 2023 or 30 September 2022.
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 27 -
12
Tangible fixed assets
Group
Heritable property
Long leasehold property
Plant and machinery
Fixtures and equipment
Motor vehicles
Tractors and trailers
Total
£
£
£
£
£
£
£
Cost
At 1 October 2022
490,003
882,233
1,430,591
165,698
490,884
28,520
3,487,929
Additions
125,000
-
0
52,116
37,756
271,130
24,030
510,032
Disposals
-
0
-
0
-
0
-
0
(135,872)
-
0
(135,872)
At 30 September 2023
615,003
882,233
1,482,707
203,454
626,142
52,550
3,862,089
Depreciation and impairment
At 1 October 2022
196,968
276,016
748,152
127,085
307,828
15,788
1,671,837
Depreciation charged in the year
18,483
34,528
188,805
18,944
93,435
8,632
362,827
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(135,872)
-
0
(135,872)
At 30 September 2023
215,451
310,544
936,957
146,029
265,391
24,420
1,898,792
Carrying amount
At 30 September 2023
399,552
571,689
545,750
57,425
360,751
28,130
1,963,297
At 30 September 2022
293,035
606,217
682,439
38,613
183,056
12,732
1,816,092
The company had no tangible fixed assets at 30 September 2023 or 30 September 2022.
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
12
Tangible fixed assets
(Continued)
- 28 -

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
87,621
381,450
-
0
-
0
Motor vehicles
195,870
249,373
-
0
-
0
283,491
630,823
-
0
-
0
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
1,459,280
1,459,280
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 October 2022 and 30 September 2023
1,459,280
Carrying amount
At 30 September 2023
1,459,280
At 30 September 2022
1,459,280
14
Subsidiaries

Details of the company's subsidiaries at 30 September 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
RTS Limited
Earnside House, Muthill, Crieff, PH7 4DH
Ordinary
100.00
Earnside Limited
Earnside House, Muthill Road, Crieff, Perthshire PH7 4DH
Ordinary
100.00
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 29 -
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
810,688
618,447
-
-
Work in progress
507,945
616,443
-
-
1,318,633
1,234,890
-
-
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,768,756
4,733,570
-
0
148
Amounts owed by group undertakings
-
0
-
0
74,758
48,000
Other debtors
272,642
397,691
10,250
-
0
Prepayments and accrued income
58,452
51,978
-
0
-
0
5,099,850
5,183,239
85,008
48,148

Included within trade debtors are balances totalling £1,827,695 (2022 - £1,450,586) that are subject to factoring arrangements. The trade debtor balances have been transferred to the counterparty, though the transaction does not qualify for derecognition on the basis that the risk and reward is retained by the company. The associated liability recognised in creditors amounts to £1,827,695 (2022 - £1,450,586).

17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
19
188,701
26,663
-
0
-
0
Obligations under finance leases
20
94,257
209,710
-
0
-
0
Trade creditors
1,927,898
2,766,929
-
0
-
0
Corporation tax payable
338,400
142,884
9,552
7,902
Other taxation and social security
288,900
258,221
-
0
-
0
Other creditors
1,865,177
1,512,571
-
0
-
0
Accruals and deferred income
1,025,984
935,533
2,406
3,430
5,729,317
5,852,511
11,958
11,332

Banking facilities are secured by way of standard securities and floating charges. Hire purchase liabilities

are secured over the assets financed.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 30 -
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
10,278
199,756
-
0
-
0
Obligations under finance leases
20
98,796
198,216
-
0
-
0
Other borrowings
19
61,558
150,001
-
0
-
0
Government grants
22
83,600
87,746
-
0
-
0
254,232
635,719
-
0
-
0
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
198,979
226,419
-
0
-
0
Other loans
61,558
150,001
-
0
-
0
260,537
376,420
-
0
-
0
Payable within one year
188,701
26,663
-
0
-
0
Payable after one year
71,836
349,757
-
0
-
0

 

Banking facilities are secured by way of standard securities and floating charges. Hire purchase liabilities

are secured over the assets financed. Other loans are secured by a share pledge.

 

20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
94,257
209,710
-
0
-
0
In two to five years
98,796
198,216
-
0
-
0
193,053
407,926
-
0
-
0

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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 31 -
21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
186,323
187,409
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 October 2022
187,409
-
0
Credit to profit or loss
(1,086)
-
0
Liability at 30 September 2023
186,323
-
0

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

22
Government grants
Group
Company
2023
2022
2023
2022
£
£
£
£
Arising from government grants
83,600
87,746
-
0
-
0

Income of £4,113 has been released during the year.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
254,321
217,039

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.

RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 32 -
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
600
600
6
6
25
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
34,216
50,379
-
0
-
0
Between two and five years
71,572
94,348
-
0
-
0
In over five years
89,398
98,045
-
0
-
0
195,186
242,772
-
0
-
0
26
Controlling party

Norman P O'Neill, Harry C Wilson and Ross F Kennedy control the company by virtue of their shareholding of 30% each.

27
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
1,022,959
696,604
Adjustments for:
Taxation charged
337,314
86,573
Finance costs
34,129
5,182
Investment income
(533)
-
0
Gain on disposal of tangible fixed assets
(9,065)
(1,098)
Amortisation and impairment of intangible assets
69,187
69,187
Depreciation and impairment of tangible fixed assets
362,827
327,727
Movements in working capital:
Increase in stocks
(83,743)
(254,118)
Decrease/(increase) in debtors
83,389
(832,437)
(Decrease)/increase in creditors
(365,295)
724,094
Decrease in deferred income
(4,146)
(4,147)
Cash generated from operations
1,447,023
817,567
RTS FORESTRY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 33 -
28
Cash generated from/(absorbed by) operations - company
2023
2022
£
£
Profit for the year after tax
231,358
174,686
Adjustments for:
Taxation charged
9,552
7,902
Investment income
(197,508)
(141,000)
Movements in working capital:
Increase in debtors
(36,860)
(48,148)
(Decrease)/increase in creditors
(1,024)
83
Cash generated from/(absorbed by) operations
5,518
(6,477)
29
Analysis of changes in net debt - group
1 October 2022
Cash flows
New finance leases
30 September 2023
£
£
£
£
Cash at bank and in hand
111,575
241,312
-
352,887
Borrowings excluding overdrafts
(376,420)
115,883
-
(260,537)
Obligations under finance leases
(407,926)
253,868
(38,995)
(193,053)
(672,771)
611,063
(38,995)
(100,703)
30
Analysis of changes in net funds - company
1 October 2022
Cash flows
30 September 2023
£
£
£
Cash at bank and in hand
3,599
(2,384)
1,215
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