Registered number: 05214492
WESTLAB LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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WESTLAB LTD
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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WESTLAB LTD
CONTENTS
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Independent Auditor's Report to the members of Westlab Ltd
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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WESTLAB LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their Strategic Report and the audited financial statements of Westlab Ltd for the year ended 31 December 2023.
The principal activities of the Company during the year continues to be the manufacturing and distribution of mineral bath salts within the UK and beyond, sold through wholesale, retail and e-commerce.
The company had a strong year, driven primarily by the easing of supply chain pressures towards the end of Q4 FY22 and the implementation of a trade-wide CPI adjustment to offset rising raw material costs due to inflation. These factors contributed to significantly healthier Gross Profit and EBITDA margins compared to the previous two years.
Principal risks and uncertainties
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Management continually monitors the key risks facing the Company together with assessing the controls used for managing these risks. The Board of Directors formally reviews and documents the principal risks facing the Company annually.
Economic impact of global events
There are several geopolitical events happening today which pose a risk to UK business, such as the Russian invasion of Ukraine and the unrest that is unfolding in the middle east. These issues pose risks to the supply chain, specifically the situation in the Red Sea.
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
Financial risk management
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The Company, in carrying out its business, faces a number of risks and uncertainties including credit, liquidity and interest rate and foreign exchange risk. The Company assesses its risks as part of its continuing operations. Our risk management policy results from a philosophy of pursuing sustainable growth and creating economic value while avoiding and managing risks.
Credit risk
The Company protects itself against customers not paying by intensifying internal credit control and its processes.
Liquidity and interest rate risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities. The Company aims to mitigate liquidity risk by managing cash generation by its operations and monitoring projected future cash flows. The Company’s exposure to liquidity risk and interest rate movements is considered to be low.
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WESTLAB LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial risk management (continued)
Foreign exchange risk
Foreign exchange risk refers to the potential for loss from exposure to foreign exchange rate fluctuations. There is a Hedge Policy in place to protect the ‘Budget Rate’. The policy defines the types of derivative products that can be used and also the foreign exchange partners to cooperate with. The Company performs a regular foreign exchange transactions review in order to ensure that the sufficient cover is in place.
The Company is carrying out supplier questionnaires to better understand sustainability from end to end and continues to monitor its B-Corp score and making gradual improvements where possible.
Key performance indicators
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Management use a range of performance measures to monitor and manage the business. The performance measures are split into financial and non-financial key performance indicators as set out below.
Financial key performance indicators
The Directors believe the financial key performance indicator of the Company is turnover growth. The table below summarises the performance for 2023 against 2022:
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Non-financial key performance indicators
The Company does not consider that there are any non-financial key performance indicators which require disclosure within these financial statements.
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This report was approved by the board and signed on its behalf.
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WESTLAB LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their report and the audited financial statements for the year ended 31 December 2023.
Directors' responsibilities statement
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The Directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
The profit for the year, after taxation, amounted to £410,192 (2022 - a loss after tax of £830,007).
During the year no dividends were paid and the Directors do not propose the payment of any dividends at the year end (2022 - £Nil).
The Directors who served during the year and up until the date of signing, unless otherwise stated, were:
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R Bohan (resigned 31 October 2023)
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The Company is always seeking opportunities to grow the business. This ranges from growing demand for existing stock keeping units ("SKU's"), developing new products as well as opening up new channels. The Company has a comprehensive plan in place for how it plans to grow revenue and EBITDA over the coming years.
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WESTLAB LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
These financial statements have been prepared on a going concern basis. The current economic conditions present risks for all businesses. In response to such conditions, the Directors have carefully considered these risks, including an assessment of uncertainty and downside scenarios on future trading projection for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis. The Directors have considered forecast cash flows, liquidity, borrowing facilities and related covenant requirements and the expected operational activities of the Company. Having due regard for these matters and after making appropriate enquiries, the Directors are satisfied that the Company has adequate resources for a period of at least 12 months from the date of signing the financial statements.
In addition, the Company's assets are assessed for recoverability on a regular basis, the Directors consider that the Company is not exposed to losses on these assets which would affect their decision to adopt the going concern basis.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubt upon the Company's ability to continue as a going concern. Thus, the Directors have continued to adopt the going concern basis of accounting in preparing these financial statements.
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Events subsequent to the reporting date
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There have been no events subsequent to the reporting date that require disclosure within these financial statements.
The auditor, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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WESTLAB LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WESTLAB LTD
Opinion
We have audited the financial statements of Westlab Ltd ("the Company"’) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and Notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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.
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WESTLAB LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WESTLAB LTD
Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor’s Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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.
Matters on which we are required to report by exception
In 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 Directors' remuneration specified by law are not made; and
∙we have not received all the information and explanations we require for our audit.
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WESTLAB LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WESTLAB LTD
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 intend either 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
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WESTLAB LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WESTLAB LTD
Auditor's responsibilities for the audit of the financial statements (continued)
In addition, we evaluated the Directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to, revenue recognition (which we pinpointed to the cut-off assertion), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the Directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.
Use of the audit report
This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Neil Barton (Senior statutory auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
One St. Peter's Square
Manchester
M2 3DE
15 November 2024
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WESTLAB LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest payable and similar expenses
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Profit/(loss) for the financial year
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See note 23 for details of the prior year restatement.
There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2023 (2022 - £NIL).
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The notes on pages 12 to 31 form part of these financial statements.
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WESTLAB LTD
REGISTERED NUMBER: 05214492
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Cash and cash equivalents
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 31 form part of these financial statements.
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WESTLAB LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Total comprehensive income for the year
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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Comprehensive loss for the year
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Total comprehensive income for the year
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Shares issued during the year
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Total transactions with owners
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The notes on pages 12 to 31 form part of these financial statements.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Westlab Ltd ("the Company") is a private company limited by shares, incorporated in the United Kingdom and registered England and Wales. Company registered number 05214492. The address of its registered office and principal place of business is Unit 57 Dunsfold Park, Stovolds Hill, Cranleigh, Surrey, England, GU6 8TB.
The principal activities of the Company during the year continues to be the manufacturing and distribution of mineral bath salts within the UK and beyond, sold through wholesale, retail and e-commerce.
These financial statements have been presented in Pounds Sterling (£), this being the functional currency of the Company and currency of its primary economic environment.
Monetary amounts within these financial statements have been rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Lowry Trading Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.
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Exemption from preparing consolidated financial statements
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The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
These financial statements have been prepared on a going concern basis. The current economic conditions present risks for all businesses. In response to such conditions, the Directors have carefully considered these risks, including an assessment of uncertainty and downside scenarios on future trading projection for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis. The Directors have considered forecast cash flows, liquidity, borrowing facilities and related covenant requirements and the expected operational activities of the Company. Having due regard for these matters and after making appropriate enquiries, the Directors are satisfied that the Company has adequate resources for a period of at least 12 months from the date of signing the financial statements.
In addition, the Company's assets are assessed for recoverability on a regular basis, the Directors consider that the Company is not exposed to losses on these assets which would affect their decision to adopt the going concern basis.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubt upon the Company's ability to continue as a going concern. Thus, the Directors have continued to adopt the going concern basis of accounting in preparing these financial statements.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is Pounds Sterling (£).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
The amortisation expense is charged to administrative expenses within the Statement of Comprehensive Income.
Tangible assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Long-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.
The depreciation expense is charged to administrative expenses within the Statement of Comprehensive Income.
Investments in subsidiaries are measured at cost less accumulated impairment.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
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.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the Statement of Comprehensive Income.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires the Company's directors to exercise judgements and estimates that have been made in preparing the financial statements, as well as make certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.
Critical judgements in applying the Company's accounting policies
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Intangible assets
Intangible assets are amortised over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Tangible assets
Tangible assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
3.Judgments in applying accounting policies (continued)
Critical judgements in applying the Company's accounting policies (continued)
Investments
Management periodically review the carrying value of investments and consider the need for impairment. They take into consideration key factors such as performance and underlying assets of the entities in which the investments are held.
During the current year no impairment was required in respect of investments (2022 - £Nil).
Stock provision
The Company provides for stock deemed to be obsolete. The provision is based on the ratio of historical information of sales and usages compared to quantities of stock held.
As at 31 December 2023 a provision of £158,551 has been recognised against stock (2022 - £48,966). During the year a charge of £158,551 (2022 - £48,966) was recognised within cost of sales in the Statement of Comprehensive Income
Key sources of estimation uncertainty
The Company considers that there are no key sources of estimation uncertainty that require disclosure within these financial statements.
The whole of the turnover is attributable to the principal activity of the Company.
Analysis of turnover by country of destination:
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See note 23 for details of the prior year restatement.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The operating profit/(loss) is stated after charging/(crediting):
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Depreciation of tangible assets
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Amortisation of intangible assets
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Impairment of stock (note 14)
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor in respect of the audit of the Company's financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated financial statements of the parent Company.
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Staff costs, including Directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the Directors, during the year was as follows:
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Company contributions to defined contribution pension schemes
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Interest payable and similar expenses
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Other loan interest payable
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Finance leases and hire purchase contracts
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Adjustments in respect of prior periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Tax on profit/(loss) (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:
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Profit/(loss) on ordinary activities before tax
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Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
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Expenses not deductible for tax purposes
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Adjustments to tax charge in respect of prior periods - corporation tax
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Adjustments to tax charge in respect of prior periods - deferred tax
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Remeasurement of deferred tax for changes in tax rates
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Total tax charge for the year
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Factors that may affect future tax charges
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There are no factors that may affect future tax charges noted at the reporting date.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Long-term leasehold property
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Investments in subsidiary companies
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The following was a subsidiary undertaking of the Company:
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Unit 57 Dunsfold Park, Stovolds Hill,Cranleigh, Surrey, GU6 8TB
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Raw materials and consumables
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During the year a charge of £158,551 (2022 - £48,966) was recognised within cost of sales in the Statement of Comprehensive Income.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and repayable on demand within one year.
Included within other debtors is an amount outstanding from the Directors of £11,000 (2022 - £64,121). This amount is unsecured, interest free and repayable on demand within one year.
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Cash and cash equivalents
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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The bank overdrafts and bank loans, provide by Coutts & Co., are secured under fixed and floating charges which cover all of the property or undertaking of the Company.
Hire purchase liabilities are secured upon the assets to which they relate. Hire purchase liabilities are also secured by a debenture creating a fixed and floating charge over the assets of the Company.
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Creditors: Amounts falling due after more than one year
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The bank overdrafts and bank loans, provide by Coutts & Co., are secured under fixed and floating charges which cover all of the property or undertaking of the Company.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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The bank overdrafts and bank loans, provide by Coutts & Co. are secured under fixed and floating charges which cover all of the property or undertaking of the Company.
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(Charged)/credited to the Statement of Comprehensive Income
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The deferred tax asset is made up as follows:
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Fixed asset timing differences
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Tax losses carried forward
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Short term timing differences
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Allotted, called up and fully paid
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391,333 (2022 - 391,333) Ordinary shares of £0.01 each
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11,535 (2022 - 11,535) Ordinary B shares of £0.01 each
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11,500 (2022 - 11,500) Ordinary C shares of £0.01 each
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18,850 (2022 - 18,850) Ordinary D shares of £0.01 each
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8,544 (2022 - 8,544) Ordinary E shares of £0.01 each
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22,754 (2022 - 22,754) Ordinary F shares of £0.01 each
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22,754 (2022 - 22,754) Ordinary G shares of £0.01 each
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Ordinary shares and Ordinary C shares each carry voting rights and no rights to fixed income.
Ordinary B, D, E, F and G shares carry no voting rights and no rights to fixed income.
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Share premium account
The Share premium account represents amounts paid in excess of the nominal value of the share capital.
Accumulated losses
Accumulated losses represent the cumulative profits and losses of the Company, less the payment of any dividends.
The prior year Statement of Comprehensive Income has been restated in order to reallocate £997,411 from Cost of Sales to Revenue to better reflect the nature of the transactions. As a result, Cost of Sales has increased by £997,411 and revenue has decreased by £997,411. There has been no impact on the overall profit for the year.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £22,631 (2022 - £28,235). Contributions totalling £514 (2022 - £Nil) were payable to the fund at the date of the Statement of Financial Position and are included in creditors.
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WESTLAB LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Commitments under operating leases
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company has taken advantage of the exemption available in accordance with Section 33 of FRS 102 not to disclose transactions entered into between two or more members of a group, as the Company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.
Included within other debtors is an amount outstanding from the directors of £11,000 (2022 - £64,121). This amount is unsecured, interest free and repayable on demand within one year (note 15).
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Events subsequent to the reporting date
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There have been no events subsequent to the reporting date that require disclosure within these financial statements.
The immediate and ultimate parent company is Lowry Trading Limited, a Company incorporated in the United Kingdom and registered in England and Wales. The ultimate parent undertaking is The Scott Fletcher 2008 Discretionary Settlement, which is an unincorporated trust.
The largest and smallest group of which the Company is a member for which consolidated financial statements are drawn up is that of Lowry Trading Limited. Copies of the consolidated financial statements of this Company can be obtained from Companies House.
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