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Registration number: 01661106

The West Group (Fluid Power) Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 August 2023

 

The West Group (Fluid Power) Limited

Contents

Company Information

1

Strategic Report

2

Directors' Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 8

Consolidated Profit and Loss Account and Statement of Retained Earnings

9

Consolidated Balance Sheet

10

Balance Sheet

11

Consolidated Statement of Cash Flows

12

Statement of Cash Flows

13

Notes to the Financial Statements

14 to 27

 

The West Group (Fluid Power) Limited

Company Information

Directors

Mr M T Middleton

Mr B E West

Mr R J R Oddy

Registered office

29 Aston Road
Waterlooville
Hampshire
PO7 7XJ

Auditors

MMO Limited
Chartered Accountants & Statutory Auditors
Wellesely House
204 London Road
Waterlooville
Hampshire
PO7 7AN

 

The West Group (Fluid Power) Limited

Strategic Report for the Year Ended 31 August 2023

The directors present their strategic report for the year ended 31 August 2023.

Principal activity

The principal activity of the group is that of a parent company.

Principal risks and uncertainties

The principal risks and uncertainties are the level of demand for the group products due to the economic environment and competion.

Approved and authorised by the Board on 13 August 2024 and signed on its behalf by:
 

.........................................
Mr M T Middleton
Director

 

The West Group (Fluid Power) Limited

Directors' Report for the Year Ended 31 August 2023

The directors present their report and the for the year ended 31 August 2023.

Directors of the group

The directors who held office during the year were as follows:

Mr M T Middleton

Mr B E West

Mr R J R Oddy

Financial instruments

Objectives and policies

The company's main objective is to continue to grow the group and increase turnover.

Price risk, credit risk, liquidity risk and cash flow risk

The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding through the use of overdrafts at floating rates of interest. All of the business' cash balances are held in such a way that it achieves a competitive rate of interest. The business makes use of the money market facilities where funds are available.

Trade debtors are managed in respect of credit and cashflow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

The trade creditor liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of MMO Limited as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved and authorised by the Board on 13 August 2024 and signed on its behalf by:
 

.........................................
Mr M T Middleton
Director

 

The West Group (Fluid Power) Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the 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 the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The West Group (Fluid Power) Limited

Independent Auditor's Report to the Members of The West Group (Fluid Power) Limited

Opinion

We have audited the financial statements of The West Group (Fluid Power) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2023, which comprise the Consolidated Profit and Loss Account and Statement of Retained Earnings, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Cash Flows, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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:

give a true and fair view of the state of the group's and the parent company's affairs as at 31 August 2023 and of the group's profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

The West Group (Fluid Power) Limited

Independent Auditor's Report to the Members of The West Group (Fluid Power) Limited

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 4], 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

The West Group (Fluid Power) Limited

Independent Auditor's Report to the Members of The West Group (Fluid Power) Limited

Extent to which the audit was considered 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:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
• Reviewing minutes of meetings of those charged with governance;
• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.

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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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.

 

The West Group (Fluid Power) Limited

Independent Auditor's Report to the Members of The West Group (Fluid Power) Limited

......................................
Mrs Gillian McIntosh (Senior Statutory Auditor)
For and on behalf of MMO Limited , Statutory Auditor

Wellesely House
204 London Road
Waterlooville
Hampshire
PO7 7AN

14 August 2024

 

The West Group (Fluid Power) Limited

Consolidated Profit and Loss Account and Statement of Retained Earnings for the Year Ended 31 August 2023

Note

2023
£

2022
£

Turnover

3

24,347,048

24,744,230

Cost of sales

 

(11,982,552)

(11,811,030)

Gross profit

 

12,364,496

12,933,200

Administrative expenses

 

(11,321,843)

(10,457,968)

Other operating income

4

420,001

363,533

Operating profit

6

1,462,654

2,838,765

Other interest receivable and similar income

7

258

1,345

Interest payable and similar charges

8

(154,615)

(127,152)

 

(154,357)

(125,807)

Profit before tax

 

1,308,297

2,712,958

Taxation

12

(253,563)

(423,345)

Profit for the financial year

 

1,054,734

2,289,613

Profit/(loss) attributable to:

 

Owners of the company

 

1,054,734

2,289,613

Retained earnings brought forward

 

10,497,991

8,912,499

Dividends paid

 

(476,665)

(704,121)

Retained earnings carried forward

 

11,076,060

10,497,991

 

The West Group (Fluid Power) Limited

(Registration number: 01661106)
Consolidated Balance Sheet as at 31 August 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

13

2,364,323

2,409,015

Tangible assets

14

8,565,558

8,200,654

 

10,929,881

10,609,669

Current assets

 

Stocks

16

3,781,811

3,942,531

Debtors

17

5,301,010

5,842,567

Cash at bank and in hand

 

650,831

1,279,298

 

9,733,652

11,064,396

Creditors: Amounts falling due within one year

19

(5,348,758)

(6,650,517)

Net current assets

 

4,384,894

4,413,879

Total assets less current liabilities

 

15,314,775

15,023,548

Creditors: Amounts falling due after more than one year

19

(2,640,514)

(2,766,377)

Provisions for liabilities

(783,547)

(671,862)

Net assets

 

11,890,714

11,585,309

Capital and reserves

 

Called up share capital

21

11,585

2,600

Revaluation reserve

722,920

722,920

Other reserves

(55,930)

2,500

Retained earnings

11,076,060

10,497,991

Equity attributable to owners of the company

 

11,754,635

11,226,011

Minority interests

 

136,079

359,298

Shareholders' funds

 

11,890,714

11,585,309

Approved and authorised by the Board on 13 August 2024 and signed on its behalf by:
 

.........................................
Mr M T Middleton
Director

 

The West Group (Fluid Power) Limited

(Registration number: 01661106)
Balance Sheet as at 31 August 2023

Note

2023
£

2022
£

Fixed assets

 

Investments

15

3,846,244

3,846,244

Current assets

 

Debtors

17

314,090

314,090

Creditors: Amounts falling due within one year

19

(3,721,705)

(3,721,705)

Net current liabilities

 

(3,407,615)

(3,407,615)

Net assets

 

438,629

438,629

Capital and reserves

 

Called up share capital

21

2,600

2,600

Retained earnings

436,029

436,029

Shareholders' funds

 

438,629

438,629

The company made a profit after tax for the financial year of £476,664 (2022 - profit of £704,120).

Approved and authorised by the Board on 13 August 2024 and signed on its behalf by:
 

.........................................
Mr M T Middleton
Director

 

The West Group (Fluid Power) Limited

Consolidated Statement of Cash Flows for the Year Ended 31 August 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

1,054,734

2,289,613

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

665,588

749,406

Profit on disposal of tangible assets

5

-

(124,923)

Finance income

7

(258)

(1,345)

Finance costs

8

154,398

113,884

Income tax expense

12

253,563

423,345

 

2,128,025

3,449,980

Working capital adjustments

 

Decrease/(increase) in stocks

16

160,720

(789,517)

Decrease in trade debtors

17

455,519

7,200,059

Decrease in trade creditors

19

(1,328,204)

(6,450,661)

Cash generated from operations

 

1,416,060

3,409,861

Income taxes paid

12

(105,054)

(533,108)

Net cash flow from operating activities

 

1,311,006

2,876,753

Cash flows from investing activities

 

Interest received

258

1,345

Acquisitions of tangible assets

(1,404,710)

(1,814,613)

Proceeds from sale of tangible assets

 

-

174,579

Net cash flows from investing activities

 

(1,404,452)

(1,638,689)

Cash flows from financing activities

 

Interest paid

8

(154,398)

(113,884)

Proceeds from bank borrowing draw downs

 

(524,280)

(91,610)

Repayment of bank borrowing

 

179,178

-

Repayment of other borrowing

 

322,377

401,936

Payments to finance lease creditors

 

131,158

(127,762)

Dividends paid

(476,665)

(704,121)

Net cash flows from financing activities

 

(522,630)

(635,441)

Net (decrease)/increase in cash and cash equivalents

 

(616,076)

602,623

Cash and cash equivalents at 1 September

 

1,099,122

496,500

Effect of exchange rate fluctuations on cash held

 

1

(1)

Cash and cash equivalents at 31 August

 

483,047

1,099,122

 

The West Group (Fluid Power) Limited

Statement of Cash Flows for the Year Ended 31 August 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

476,664

704,120

Adjustments to cash flows from non-cash items

 

Finance income

(476,664)

(704,120)

 

-

-

Working capital adjustments

 

Increase in trade creditors

19

-

1

Net cash flow from operating activities

 

-

1

Cash flows from investing activities

 

Interest received

476,664

704,120

Cash flows from financing activities

 

Dividends paid

(476,665)

(704,121)

Net decrease in cash and cash equivalents

 

(1)

-

Cash and cash equivalents at 1 September

 

-

-

Effect of exchange rate fluctuations on cash held

 

1

-

Cash and cash equivalents at 31 August

 

-

-

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

1

General information

The company is a private company limited by share capital, incorporated in England .

The address of its registered office is:
29 Aston Road
Waterlooville
Hampshire
PO7 7XJ

These financial statements were authorised for issue by the Board on 13 August 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 August 2023.

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Going concern

The financial statements have been prepared on a going concern basis.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group.

The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Motor vehicles

25% reducing balance

Office equipment

25% reducing balance

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Separately acquired trademarks and licences are shown at historical cost.

Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.

Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10 years straight line

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.


Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

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

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3

Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

24,347,526

24,745,357

Leasing of equipment

(478)

(2,087)

Other revenue

-

960

24,347,048

24,744,230

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2023
£

2022
£

Government grants

-

10,450

Miscellaneous other operating income

420,001

353,083

420,001

363,533

5

Other gains and losses

The analysis of the group's other gains and losses for the year is as follows:

2023
£

2022
£

Gain on disposal of Tangible assets

-

124,923

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

6

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

620,824

699,933

Amortisation expense

44,764

49,473

Research and development cost

405,435

2,345

Operating lease expense - plant and machinery

268,507

204,016

Profit on disposal of property, plant and equipment

-

(124,923)

7

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

52

-

Other finance income

206

1,345

258

1,345

8

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

111,133

88,197

Interest on obligations under finance leases and hire purchase contracts

29,336

20,656

Interest expense on other finance liabilities

13,929

5,031

Foreign exchange gains

217

13,268

154,615

127,152

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

8,148,885

8,450,454

Social security costs

616,210

655,791

Pension costs, defined contribution scheme

126,071

88,256

Other post-employment benefit costs

117,529

131,184

Other employee expense

3,720

3,587

9,012,415

9,329,272

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

9.1

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 142 (2022 - 121).

10

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

2,563,357

2,953,938

11

Auditors' remuneration

2023
£

2022
£

Audit of these financial statements

28,583

23,829


 

12

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

87,009

400,566

UK corporation tax adjustment to prior periods

-

(44,574)

87,009

355,992

Deferred taxation

Arising from origination and reversal of timing differences

166,554

67,353

Tax expense in the income statement

253,563

423,345

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

13

Intangible assets

Group

Goodwill
 £

Trademarks, patents and licenses
 £

Contractual customer relationships
 £

Other intangible assets
 £

Total
£

Cost or valuation

At 1 September 2022

3,505,550

81,625

-

104,576

3,691,751

At 31 August 2023

3,505,550

81,625

-

104,576

3,691,751

Amortisation

At 1 September 2022

1,169,635

35,420

-

77,681

1,282,736

Amortisation charge

18,141

8,162

-

18,459

44,762

Foreign exchange movements

-

-

(70)

-

(70)

At 31 August 2023

1,187,776

43,582

(70)

96,140

1,327,428

Carrying amount

At 31 August 2023

2,317,774

38,043

70

8,436

2,364,323

At 31 August 2022

2,335,915

46,205

-

26,895

2,409,015

The aggregate amount of research and development expenditure recognised as an expense during the period is £405,435 (2022 - £2,345).
 

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

14

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost or valuation

At 1 September 2022

4,280,384

7,263,512

46,549

11,590,445

Additions

238,868

1,165,842

-

1,404,710

At 31 August 2023

4,519,252

8,429,354

46,549

12,995,155

Depreciation

At 1 September 2022

271,347

3,132,380

9,061

3,412,788

Charge for the year

34,839

580,228

9,372

624,439

Foreign exchange movements

-

392,370

-

392,370

At 31 August 2023

306,186

4,104,978

18,433

4,429,597

Carrying amount

At 31 August 2023

4,213,066

4,324,376

28,116

8,565,558

At 31 August 2022

4,009,037

4,154,129

37,488

8,200,654

Included within the net book value of land and buildings above is £4,193,654 (2022 - £3,982,855) in respect of freehold land and buildings and £19,410 (2022 - £26,182) in respect of long leasehold land and buildings.
 

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

15

Investments

Company

2023
£

2022
£

Investments in subsidiaries

3,846,244

3,846,244

Subsidiaries

£

Cost or valuation

At 1 September 2022

3,847,244

Provision

At 1 September 2022

1,000

Carrying amount

At 31 August 2023

3,846,244

At 31 August 2022

3,846,244

16

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Raw materials and consumables

2,429,990

2,963,169

-

-

Work in progress

12,883

10,250

-

-

Finished goods and goods for resale

1,231,742

892,009

-

-

Other inventories

107,196

77,103

-

-

3,781,811

3,942,531

-

-

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

17

Debtors

   

Group

Company

Current

Note

2023
£

2022
£

2023
£

2022
£

Trade debtors

 

3,760,507

5,014,775

-

-

Amounts owed by related parties

-

-

235,706

235,706

Other debtors

 

913,324

177,965

78,384

78,384

Prepayments

 

445,952

382,562

-

-

Deferred tax assets

12

-

87,802

-

-

Income tax asset

12

181,227

179,463

-

-

   

5,301,010

5,842,567

314,090

314,090

18

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash on hand

490

915

-

-

Cash at bank

650,341

1,278,383

-

-

650,831

1,279,298

-

-

Bank overdrafts

(167,784)

(180,176)

-

-

Cash and cash equivalents in statement of cash flows

483,047

1,099,122

-

-

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

19

Creditors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Due within one year

 

Loans and borrowings

864,901

822,175

-

-

Trade creditors

 

1,895,451

2,539,507

-

-

Amounts due to related parties

-

-

3,514,541

3,514,542

Social security and other taxes

 

338,111

304,923

-

-

Outstanding defined contribution pension costs

 

5,654

4,907

-

-

Other payables

 

541,661

517,330

207,164

207,163

Accruals

 

1,694,375

2,436,789

-

-

Corporation tax liability

12

8,605

24,886

-

-

 

5,348,758

6,650,517

3,721,705

3,721,705

Due after one year

 

Loans and borrowings

2,640,514

2,766,377

-

-

 

The West Group (Fluid Power) Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

20

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £126,071 (2022 - £88,256).

Contributions totalling £5,654 (2022 - £4,907) were payable to the scheme at the end of the year and are included in creditors.

21

Share capital

Allotted, called up and fully paid shares

2023

2022

No.

£

No.

£

Ordinary of £0.05 each

52,000

2,600

52,000

2,600

       

22

Dividends

2023

2022

£

£

Interim dividend of £9.1667 (2022 - £13.5407) per ordinary share

476,664

704,120