Company registration number SC092505
RUSSWOOD LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
RUSSWOOD LTD.
COMPANY INFORMATION
Directors
Ms C E Howie
Mr J D Russell
Mrs I Russell
Mr M Russell
Ms N Russell
Secretary
Mr J D Russell
Company number
SC092505
Registered office
Station Yard
Newtonmore
Inverness-shire
PH20 1AR
Auditor
MacKenzie Kerr Limited
Chartered Accountants and Statutory Auditors
Redwood
19 Culduthel Road
Inverness
IV2 4AA
RUSSWOOD LTD.
CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Statement of cash flows
9
Notes to the financial statements
10 - 24
The following pages do not form part of the statutory financial statements:
Detailed trading and profit and loss account
RUSSWOOD LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Review of the business
Issues with sourcing Siberian Larch due to the conflict in Ukraine and Russia has meant that building relationships with new suppliers has been the principle focus this year. Russwood have successfully gained new suppliers and business partnerships which ensure reliable access to quality products, some exclusive to the UK. The company holds shares in SiOO:X, a Swedish company specializing in advanced silicon wood protection. The company continues to research and develop innovative new value added products and solutions to help our customers achieve design excellence in the built environment.
The company has 4 main strategic goals; To provide the best quality products, technical expertise and customer service in our industry, to become the leading UK manufacturer in our market by implementing a culture of constant improvement and innovation, to continue to grow revenue and profitability to reinvest in the future of the company, to reduce our impact on the environment. Our Management Team hold an annual strategy review and monitor progress monthly at Managers Meetings. The wider team is updated on strategic objectives and targets at departmental team meeting and during companywide ‘Continuous Improvement Meetings’. Our strategy is ongoing with no wholescale changes to business practices, rather we look to make constant improvements and be proactive to meet changes in the market.
The profit after tax for the year ended 31st March 2024 was £862,727 (2023: £1,176,701).
Mr J D Russell
Director
23 September 2024
RUSSWOOD LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
Russwood Ltd is a supplier of timber cladding, flooring, decking and interior cladding products.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £320,010. 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:
Ms C E Howie
Mr J D Russell
Mrs I Russell
Mr M Russell
Ms N Russell
Auditor
The auditor, MacKenzie Kerr Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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.
RUSSWOOD LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
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 J D Russell
Director
23 September 2024
RUSSWOOD LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RUSSWOOD LTD.
- 4 -
Opinion
We have audited the financial statements of Russwood Ltd. (the 'company') for the year ended 31 March 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 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.
RUSSWOOD LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RUSSWOOD LTD. (CONTINUED)
- 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
RUSSWOOD LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RUSSWOOD LTD. (CONTINUED)
- 6 -
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the Responsible Individual (RI) drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the RI's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
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.
Mark D Sanderson BSc CA
Senior Statutory Auditor
For and on behalf of MacKenzie Kerr Limited
24 September 2024
Chartered Accountants
Statutory Auditor
Redwood
19 Culduthel Road
Inverness
IV2 4AA
RUSSWOOD LTD.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
Notes
£
£
Turnover
2
9,851,303
10,268,895
Cost of sales
(6,717,370)
(6,879,897)
Gross profit
3,133,933
3,388,998
Administrative expenses
(2,011,951)
(1,888,913)
Other operating income
93,581
76,636
Operating profit
3
1,215,563
1,576,721
Interest receivable and similar income
6
64,679
131
Interest payable and similar expenses
7
(28,305)
(4,312)
Profit before taxation
1,251,937
1,572,540
Tax on profit
9
(378,325)
(395,839)
Profit for the financial year
873,612
1,176,701
Retained earnings brought forward
8,014,560
7,042,374
Dividends
8
(320,010)
(204,515)
Retained earnings carried forward
8,568,162
8,014,560
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RUSSWOOD LTD.
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
9,346
Tangible assets
13
4,282,536
4,036,353
Investments
11
254,694
254,694
4,537,230
4,300,393
Current assets
Stocks
14
1,946,649
2,859,438
Debtors
15
668,288
798,578
Cash at bank and in hand
4,741,213
2,805,172
7,356,150
6,463,188
Creditors: amounts falling due within one year
16
(2,034,086)
(1,465,487)
Net current assets
5,322,064
4,997,701
Total assets less current liabilities
9,859,294
9,298,094
Creditors: amounts falling due after more than one year
17
(425,606)
(451,144)
Provisions for liabilities
Deferred tax liability
20
436,087
368,519
(436,087)
(368,519)
Deferred income
21
(429,339)
(463,771)
Net assets
8,568,262
8,014,660
Capital and reserves
Allotted, called up and fully paid share capital
23
100
100
Profit and loss reserves
8,568,162
8,014,560
Total equity
8,568,262
8,014,660
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
Mr J D Russell
Director
Company registration number SC092505
RUSSWOOD LTD.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
2,855,725
1,944,857
Interest paid
(28,305)
(4,312)
Income taxes paid
(49,384)
(548,189)
Net cash inflow from operating activities
2,778,036
1,392,356
Investing activities
Purchase of tangible fixed assets
(591,044)
(923,854)
Proceeds from disposal of tangible fixed assets
25,058
39,750
Proceeds from disposal of investments
(254,694)
Interest received
51,829
131
Other income received from investments
12,850
Net cash used in investing activities
(501,307)
(1,138,667)
Financing activities
Proceeds from borrowings
38,881
Repayment of borrowings
(2,431)
Proceeds from new bank loans
380,000
Repayment of bank loans
(28,328)
(2,281)
Payment of finance leases obligations
(28,800)
(20,311)
Dividends paid
(320,010)
(204,515)
Net cash (used in)/generated from financing activities
(340,688)
152,893
Net increase in cash and cash equivalents
1,936,041
406,582
Cash and cash equivalents at beginning of year
2,805,172
2,398,590
Cash and cash equivalents at end of year
4,741,213
2,805,172
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
1
Accounting policies
Company information
Russwood Ltd. is a private company limited by shares incorporated in Scotland. The registered office is Station Yard, Newtonmore, Inverness-shire, PH20 1AR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents net invoiced sales of timber products, excluding value added tax arising wholly in the UK.
Revenue from sale of goods and services is recognised when the significant risks and rewards of ownership have passed to the buyer and the amount of revenue can be reliably measured.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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:
Website development
3 years straight line
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies (Continued)
- 11 -
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:
Freehold land and buildings
50 years straight line
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
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
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies (Continued)
- 12 -
1.8
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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the 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.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies (Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
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.
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.
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.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
2
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Cladding and decking
8,769,778
8,828,072
Flooring
1,081,525
1,440,823
9,851,303
10,268,895
2024
2023
£
£
Other revenue
Interest income
51,829
131
Grants received
34,432
49,923
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
3
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Research and development costs
7,791
820
Government grants
(34,432)
(49,923)
Fees payable to the company's auditor for the audit of the company's financial statements
11,485
10,758
Depreciation of owned tangible fixed assets
264,760
261,898
Depreciation of tangible fixed assets held under finance leases
32,708
24,167
Loss on disposal of tangible fixed assets
22,335
1,900
Amortisation of intangible assets
9,346
18,930
Operating lease charges
20,598
38,619
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Cladding and decking
35
36
Flooring
4
5
Management and admin
21
20
Total
60
61
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,646,467
1,594,284
Social security costs
150,447
152,618
Pension costs
304,686
204,063
2,101,600
1,950,965
5
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
98,916
158,563
Company pension contributions to defined contribution schemes
247,092
81,064
346,008
239,627
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
46,211
131
Other interest income
5,618
Total interest revenue
51,829
131
Income from fixed asset investments
Income from other fixed asset investments
12,850
Total income
64,679
131
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
46,211
131
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
24,369
2,294
Other finance costs:
Interest on finance leases and hire purchase contracts
3,936
2,018
28,305
4,312
8
Dividends
2024
2023
£
£
Interim paid
320,010
204,515
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
346,740
230,259
Adjustments in respect of prior periods
(35,983)
Total current tax
310,757
230,259
Deferred tax
Origination and reversal of timing differences
67,568
165,580
Total tax charge
378,325
395,839
2024
2023
£
£
Profit before taxation
1,251,937
1,572,540
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
312,984
298,783
Tax effect of expenses that are not deductible in determining taxable profit
3,856
(20,541)
Tax effect of income not taxable in determining taxable profit
(28,525)
Adjustments in respect of prior years
(35,983)
Effect of change in corporation tax rate
64,086
Permanent capital allowances in excess of depreciation
29,900
(19,458)
Deferred tax
67,568
101,494
Taxation charge for the year
378,325
395,839
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
10
Intangible fixed assets
Website development
£
Cost
At 1 April 2023 and 31 March 2024
58,373
Amortisation and impairment
At 1 April 2023
49,027
Amortisation charged for the year
9,346
At 31 March 2024
58,373
Carrying amount
At 31 March 2024
At 31 March 2023
9,346
11
Fixed asset investments
2024
2023
£
£
Unlisted investments
254,694
254,694
12
Subsidiaries
The company has taken advantage of section 405 of the Companies Act 2006 on the grounds that its subsidiary is not material for the purposes of giving a true and fair view.
Accordingly these financial statements present information about the company as an individual undertaking and not about its group.
Details of the company's subsidiaries at 31 March 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
SIOO UK Ltd
The Saw Mill Station Road
Newtonmore PH20 1AR
Ordinary £1
100.00
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
13
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
3,399,307
1,516,433
384,937
426,346
5,727,023
Additions
374,732
177,726
38,586
591,044
Disposals
(59,843)
(54,796)
(114,639)
At 31 March 2024
3,714,196
1,639,363
423,523
426,346
6,203,428
Depreciation and impairment
At 1 April 2023
466,324
833,373
222,653
168,320
1,690,670
Depreciation charged in the year
67,905
114,709
50,346
64,508
297,468
Eliminated in respect of disposals
(28,640)
(38,606)
(67,246)
At 31 March 2024
505,589
909,476
272,999
232,828
1,920,892
Carrying amount
At 31 March 2024
3,208,607
729,887
150,524
193,518
4,282,536
At 31 March 2023
2,932,983
683,060
162,284
258,026
4,036,353
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Motor vehicles
98,125
130,833
14
Stocks
2024
2023
£
£
Finished goods and goods for resale
1,946,649
2,859,438
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
462,772
468,593
Other debtors
153,098
301,523
Prepayments and accrued income
52,418
28,462
668,288
798,578
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
18
27,375
27,375
Obligations under finance leases
19
28,800
28,800
Other borrowings
18
4,860
Trade creditors
350,930
455,313
Corporation tax
311,631
50,258
Other taxation and social security
289,606
259,569
Other creditors
627,543
431,239
Accruals and deferred income
393,341
212,933
2,034,086
1,465,487
17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
322,016
350,344
Obligations under finance leases
19
72,000
100,800
Other borrowings
18
31,590
425,606
451,144
18
Loans and overdrafts
2024
2023
£
£
Bank loans
349,391
377,719
Other loans
36,450
385,841
377,719
Payable within one year
32,235
27,375
Payable after one year
353,606
350,344
The company received a bank loan from Royal Bank of Scotland of £380,000, interest is charged at 2.05% plus base rate. The loan is repayable over 10 years. The Royal Bank of Scotland hold a floating charge and standard security over assets in the company.
The company received a loan of £38,881 from The Energy Saving Trust Limited, the loan is interest free and is repayable over a period of 8 years.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
28,800
28,800
In two to five years
72,000
100,800
100,800
129,600
Hire purchase and finance lease creditors are secured over the assets they relate to.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
436,087
368,519
2024
Movements in the year:
£
Liability at 1 April 2023
368,519
Charge to profit or loss
67,568
Liability at 31 March 2024
436,087
21
Deferred income
2024
2023
£
£
Government grants brought forward
429,339
363,729
Arising from Grants received/released in year
-
100,042
429,339
463,771
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
304,686
204,063
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.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
10,000
10,000
100
100
24
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:
2024
2023
£
£
Within one year
55,051
17,276
Between two and five years
112,273
20,220
167,324
37,496
25
Capital commitments
At the balance sheet date the company has committed to a rebuild of the processing shed. The expected costs of this work is approximately £504,000 with just over £270,000 already spent on this project. The company has set aside some of its existing reserves to go towards this project.
26
Related party transactions
At 31 March 2024 the company owed the directors £252,269 (2023: £77,827) and this is included in other creditors. This loan is unsecured, interest free and has no fixed terms of repayment.
During the year the company purchased materials from Sioo Holding AB, a Swedish company which Russwood Ltd own 1% share capital, of £530,776 an amount of £37,180 is included in trade creditors due from this company. Russwood Ltd issued sales invoices totalling £275 to Sioo Holding AB Ltd during the year.
RUSSWOOD LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
27
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
873,612
1,176,701
Adjustments for:
Taxation charged
378,325
395,839
Finance costs
28,305
4,312
Investment income
(64,679)
(131)
Loss on disposal of tangible fixed assets
22,335
1,900
Amortisation and impairment of intangible assets
9,346
18,930
Depreciation and impairment of tangible fixed assets
297,468
286,065
(Decrease)/increase in deferred income
(34,432)
100,042
Movements in working capital:
Decrease/(increase) in stocks
912,789
(88,213)
Decrease/(increase) in debtors
130,290
(62,576)
Increase in creditors
302,366
111,988
Cash generated from operations
2,855,725
1,944,857
28
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
2,805,172
1,936,041
4,741,213
Borrowings excluding overdrafts
(377,719)
(8,122)
(385,841)
Obligations under finance leases
(129,600)
28,800
(100,800)
2,297,853
1,956,719
4,254,572
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