Company registration number 02326847 (England and Wales)
HENRY WILLIAMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HENRY WILLIAMS LIMITED
COMPANY INFORMATION
Directors
Mr R H S Dilley
Mr R J Dilley
Mr D Neil
Mr M Wilson
Dr J C Dilley
Mr C P Stephenson
Secretary
Mr D Neil
Company number
02326847
Registered office
Henry Williams Group Limited
Dodsworth Street
Darlington
DL1 2NJ
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
HENRY WILLIAMS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 24
HENRY WILLIAMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
The financial statements for the year to 31 December 2023 comprise the results for the 52 week period to 29 December 2023.
Review of the business
The principal activities of the company are machining of forged components, sheet metal enclosures and electrical wiring. These are mainly for the railway, highways and oil and gas industries.
At the end of 2023 we ceased forge manufacturing with the loss of twenty-eight jobs. We are continuing to machine these forgings and generate revenues and accordingly a discontinued activity is not disclosed in the statement of comprehensive income.
We continue to operate sheet metal and electrical wiring departments. Demand has been lower in the last few months, and we will have to wait for the next cycle of railway spending to be fully underway to see significant increases in project work. Steel prices have now stabilised and in some cases slightly reduced.
Exceptional costs arose from the closure of the Forge division and have been charged to the profit and loss account in the year, comprising £542k of redundancy and £286k impairment of fixed assets.
Overall sales were up 26.9% which resulted in an operating profit of £968k (2022 - £707k). Working capital increased slightly during the year and is now expected to reduce as the company is no longer making forged product.
Principal risks and uncertainties
The main risk to the business is the amount of project work available. Currency risk is now much lower as all the project work is for the UK market
Key performance indicators
The company's key performance indicators are sales and operating profit which have been significantly above the original budget set by the directors. The directors see this good performance continuing into 2024.
Future developments
We will be looking to see how much the volume of signalling work increases as the new railway investment cycle gets going.
Mr R H S Dilley
Director
29 August 2024
HENRY WILLIAMS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
The financial statements for the year to 31 December 2023 comprise the results for the 52 week period to 29 December 2023.
Results and dividends
The results for the year are set out on page 7.
No interim ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R H S Dilley
Mr R J Dilley
Mr D Neil
Mr M Wilson
Dr J C Dilley
Mr C P Stephenson
Mr D Brookes
(Resigned 30 April 2023)
Mrs C Ames
(Resigned 31 August 2023)
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
Mr R H S Dilley
Director
29 August 2024
HENRY WILLIAMS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 company’s transactions and disclose with reasonable accuracy at any time the financial position of 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HENRY WILLIAMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HENRY WILLIAMS LIMITED
- 4 -
Opinion
We have audited the financial statements of Henry Williams Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its 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.
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 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 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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HENRY WILLIAMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HENRY WILLIAMS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the 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 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 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 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'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.
HENRY WILLIAMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HENRY WILLIAMS LIMITED
- 6 -
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:
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.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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.
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.
Alan Sidebottom
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
29 August 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
HENRY WILLIAMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
10,988,290
8,656,997
Cost of sales
(7,048,548)
(6,168,957)
Gross profit
3,939,742
2,488,040
Distribution costs
(143,475)
(144,835)
Administrative expenses
(1,999,164)
(2,026,853)
Exceptional items
4
(829,126)
390,296
Operating profit
5
967,977
706,648
Interest receivable and similar income
7
3,314
7
Profit before taxation
971,291
706,655
Tax on profit
8
(251,395)
7,948
Profit for the financial year
719,896
714,603
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
HENRY WILLIAMS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
1,473
2,736
Tangible assets
11
1,076,144
1,633,882
1,077,617
1,636,618
Current assets
Stocks
12
3,115,170
3,081,182
Debtors
13
1,291,997
1,301,878
Cash at bank and in hand
2,272,731
466,432
6,679,898
4,849,492
Creditors: amounts falling due within one year
14
(1,985,242)
(1,327,408)
Net current assets
4,694,656
3,522,084
Total assets less current liabilities
5,772,273
5,158,702
Provisions for liabilities
Deferred tax liability
15
121,200
227,525
(121,200)
(227,525)
Net assets
5,651,073
4,931,177
Capital and reserves
Called up share capital
17
200,000
200,000
Share premium account
7,897
7,897
Capital redemption reserve
450,000
450,000
Profit and loss reserves
4,993,176
4,273,280
Total equity
5,651,073
4,931,177
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr R H S Dilley
Director
Company Registration No. 02326847
HENRY WILLIAMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
200,000
7,897
450,000
3,908,677
4,566,574
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
714,603
714,603
Dividends
9
-
-
-
(350,000)
(350,000)
Balance at 31 December 2022
200,000
7,897
450,000
4,273,280
4,931,177
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
719,896
719,896
Balance at 31 December 2023
200,000
7,897
450,000
4,993,176
5,651,073
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Henry Williams Limited is a private company limited by shares incorporated in England and Wales. The registered office is Henry Williams Group Limited, Dodsworth Street, Darlington, DL1 2NJ.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the exemption conferred by section 33.1A of FRS 102 allowing it not to disclose transactions and balance within its group, on the grounds that those entities are related by virtue of having the same control as defined in 33.11(b).
The financial statements of the company are consolidated in the financial statements of Con Mech Holdings Limited. These consolidated financial statements are available from its registered office, Dodsworth Street, Darlington, DL1 2NJ.
1.2
Going concern
The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Budgets and cashflows have been prepared using assumptions for capital expenditure, customer demand and supply chain costs. These budgets and cashflows indicate continuing profitability and cash generation, consequently the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements. Accordingly, these financial statements have been prepared on the going concern basis.true
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts and is recognised on dispatch.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, 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.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
Turnover from contracts for the provision of services or construction contracts is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
Shorter of the life of the licence or 5 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
10% reducing balance and 20-25% straight line
Fixtures, fittings and equipment
10% reducing balance and 20% straight line
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company 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.
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.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
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.
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.
1.9
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
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 company 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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, and loans from fellow group companies, 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 receipts 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.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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 company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company 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 company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Certain of the activities of the company are eligible for the enhanced taxation reliefs available under the research and development tax regime. A tax asset is only recognised in respect of research and development tax credits when the amount can be reliably measured and receipt is considered probable, which is usually upon completion of the necessary tax return. Accordingly, the company at the balance sheet date may have entitlement to tax credits for which credit is not recognised in the balance sheet as the recognition criteria of the accounting policy have not been met.
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Where the calculation of current tax includes significant uncertainties, the directors apply a point estimate in the calculation of the tax charge and associated asset or liability. This is calculated based on agreement with tax authorities over accepted estimates and adjustments to the company's taxable profits, with the directors considering it probable that a similar outcome will be obtained in the current year by adopting the same estimation methodology, and accordingly have provided for the associated tax relief on the grounds that it is probable this will be received.
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 when the company has 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.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.17
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the profit and loss account.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Recognition of profit on service and construction contracts
The company undertakes a number of contracts which run over an extended period on which turnover and profits are recognised as disclosed in notes 1.3 and 1.9 and on which there is a key judgement as to the stage of completion and the expected profitability of the contract.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock valuation
The company converts raw materials to finished goods. Stock values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
The company has a high reliance on metal commodities and is therefore exposed to fluctuations in the commodity market leaving its stock exposed to losses compared to replacement cost. Management also have regard to this exposure in calculating the net realisable value of stock, and make a suitable provision as necessary. Stock provisions also expense any absorbed overheads as necessary.
Depreciation of tangible fixed assets
The depreciation policy has been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £350,410 (2022 - £383,389) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Forging and fabrication
6,877,149
3,450,190
Electrical components, contracts and other
4,111,141
5,206,807
10,988,290
8,656,997
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
10,839,661
8,654,227
European Union
52,347
2,770
Rest of the World
96,282
-
10,988,290
8,656,997
2023
2022
£
£
Other revenue
Interest income
3,314
7
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Exceptional items
2023
2022
£
£
Expenditure
Exceptional legal fees
-
(390,296)
Impairment of property, plant and equipment
286,507
-
Redundancy costs
542,619
-
829,126
(390,296)
The exceptional expenditure incurred in the year relates to the closure of the Forge. The exceptional item in the prior year relates to a legal case in respect of the protection of intellectual property of the company which was settled in 2022.
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
27
Research and development costs
10,622
-
Fees payable to the company's auditor for the audit of the company's financial statements
12,125
11,400
Depreciation of owned tangible fixed assets
350,410
383,389
Impairment of property, plant and equipment
286,507
(Profit)/loss on disposal of tangible fixed assets
(1,477)
430
Amortisation of intangible assets
590
5,725
Operating lease charges
19,229
17,780
Additionally, the company incurs research and development expenditure by way of staff salary costs, which are included in note 6.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
56
59
Sales and distribution
6
5
Administration and support
10
10
Directors
7
8
Total
79
82
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 18 -
Their aggregate remuneration (including directors) comprised:
2023
2022
£
£
Wages and salaries
2,597,822
2,330,563
Social security costs
258,487
257,873
Pension costs
111,236
215,003
2,967,545
2,803,439
In addition to the above, redundancy costs were incurred in the year of £542,619 (2022: £Nil) which are included within exceptional items.
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
2,885
Other interest income
429
7
Total income
3,314
7
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
99,361
30,400
Adjustments in respect of prior periods
29,867
(170,789)
UK income tax
(229)
Group tax relief
228,492
Total current tax
357,720
(140,618)
Deferred tax
Origination and reversal of timing differences
(106,325)
132,670
Total tax charge/(credit)
251,395
(7,948)
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -
The actual charge/(credit) 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
971,291
706,655
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
228,453
134,264
Tax effect of expenses that are not deductible in determining taxable profit
85
203
Adjustments in respect of prior years
29,867
(170,789)
Depreciation on assets not qualifying for tax allowances
16,314
Research and development tax credit
(117,051)
Deferred tax adjustments in respect of prior years
132,670
Other adjustments
(7,010)
(3,559)
Taxation charge/(credit) for the year
251,395
(7,948)
9
Dividends
2023
2022
£
£
Final paid
350,000
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Intangible fixed assets
Software
£
Cost
At 1 January 2023
234,513
Disposals
(231,563)
At 31 December 2023
2,950
Amortisation and impairment
At 1 January 2023
231,777
Amortisation charged for the year
590
Disposals
(230,890)
At 31 December 2023
1,477
Carrying amount
At 31 December 2023
1,473
At 31 December 2022
2,736
More information on impairment movements in the year is given in note .
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
6,042,849
282,216
39,124
6,364,189
Additions
81,269
1,672
82,941
Disposals
(853,952)
(102,618)
(28,124)
(984,694)
At 31 December 2023
5,270,166
181,270
11,000
5,462,436
Depreciation and impairment
At 1 January 2023
4,429,260
266,789
34,258
4,730,307
Depreciation charged in the year
345,516
3,944
950
350,410
Impairment losses
286,507
286,507
Eliminated in respect of disposals
(850,533)
(105,749)
(24,650)
(980,932)
At 31 December 2023
4,210,750
164,984
10,558
4,386,292
Carrying amount
At 31 December 2023
1,059,416
16,286
442
1,076,144
At 31 December 2022
1,613,589
15,427
4,866
1,633,882
The impairment charge recognised within plant and machinery has arisen as a result of the closure of the Forge and the agreed sale proceeds of the respective plant items.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
956,562
1,286,090
Work in progress
711,976
758,128
Finished goods and goods for resale
1,446,632
1,036,964
3,115,170
3,081,182
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,184,559
879,082
Corporation tax recoverable
318,972
Other debtors
44,205
Prepayments and accrued income
107,438
59,619
1,291,997
1,301,878
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
226,792
703,742
Amounts owed to group undertakings
346,300
47,809
Corporation tax
99,360
30,400
Other taxation and social security
403,369
218,081
Other creditors
505,070
41,592
Accruals and deferred income
404,351
285,784
1,985,242
1,327,408
Amounts owed to group undertakings are interest free and are repayable on demand.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances in excess of depreciation
124,900
231,825
Provisions
(3,700)
(4,300)
121,200
227,525
2023
Movements in the year:
£
Liability at 1 January 2023
227,525
Credit to other comprehensive income
(106,325)
Liability at 31 December 2023
121,200
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
111,236
215,003
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
As at the year end, other creditors include an amount of £14,777 (2022 - £17,252) which is accrued for payment to the pension scheme.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
200,000
200,000
200,000
200,000
Each ordinary share is entitled to one vote, and carries rights to any discretionary dividend payments but no rights to fixed income. Each share carries equal rights to any capital distributions made.
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
18
Financial commitments, guarantees and contingent liabilities
The company is party to a group guarantee over any bank overdrafts which may from time to time arise. At the year end, bank overdrafts of relevant group companies totalled £677,173 (2022 - 670,454), although at the year end the group as a whole had net cash at bank.
As at the date of approval of the financial statements, no default has occurred which would trigger the above liability, nor is one anticipated. As such, the directors consider that the fair value of this obligation is £nil, and as such there is no recognition of a liability on the balance sheet.
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
24,559
10,521
Between two and five years
19,299
15,781
43,858
26,302
20
Related party transactions
Transactions with related parties
Other information
The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS 102 which permit it to not present details of its transactions with members of the group headed by Con Mech Holdings Limited where relevant group companies are all wholly owned. During the year the company has been wholly owned and accordingly current year transactions are not disclosed above.
21
Ultimate controlling party
The immediate parent company is Henry Williams Group. The ultimate parent company and controlling party is Con Mech Holdings Limited. Con Mech Holdings Limited is the smallest and largest group into which these financial statements are consolidated, and these group accounts can be obtained from its registered office Dodsworth Street, Darlington, County Durham, DL1 2NJ.
22
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
183,632
218,153
Company pension contributions to defined contribution schemes
53,512
114,924
237,144
333,077
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
HENRY WILLIAMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Directors' remuneration
(Continued)
- 24 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
116,781
113,811
Company pension contributions to defined contribution schemes
12,922
24,602
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