Company registration number 01296660 (England and Wales)
RICHARD WESTERN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
RICHARD WESTERN LIMITED
COMPANY INFORMATION
Directors
Mr Richard Western
Mr Angus Western
Secretary
Mr Angus Western
Company number
01296660
Registered office
D'Urbans Farm
Framlingham
Woodbridge
Suffolk
IP13 9RP
Auditor
Jamieson Alexander Audit Limited
Unit B2
The Point
Weaver Road
Lincoln
LN6 3QN
RICHARD WESTERN LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
RICHARD WESTERN LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the period ended 31 December 2023.
Review of the business
The 11 months ended 31 December 2023 was another strong period of progress for Richard Western Limited but certainly not without challenge. The principal activity of the company throughout the year continued to be the manufacture and sale of agricultural equipment.
Demand for our products is in part driven by the market prices our customers receive for ‘soft commodities’, such as cereal and oilseed crops. As has been well publicised in our industry, these commodity prices fluctuated significantly during the financial period, with a commensurate impact on our sales performance.
However, the directors consider the results of the year to be positive with significant progress made towards achieving our strategic objectives. Given challenging macroeconomic conditions for the majority of our customer base, the results demonstrate the strength of the business, which include our long-standing reputation for quality, our trusted reputation in the marketplace with both our customers and suppliers, and our growing presence in overseas markets.
All of these factors combined create a backdrop for a resilient sales performance, and it is pleasing to see the efforts of all our staff pay off.
Principal risks and uncertainties
Credit risk
The company's main financial assets are trade receivables, cash and bank balances. Those assets represent the company's main exposure to credit risk, which is a risk that a counterparty will fail to discharge its obligations, resulting in financial loss to the company. Whilst the company does provide goods and services to many large customers it is not reliant on any of these to continue its operations and with this in mind the directors believe that credit risk is both limited and mitigated.
Competitive risk
The company operates in a highly competitive industry and faces competition from a number of sources. This competition may lead to pricing pressure which could result in squeezed profit margins and potential loss of business to other market players. The directors continually monitor this risk, and the company holds a strong position in the market and is highly regarded within the industry.
Regulation risk
The company operates in an industry which is subject to numerous laws and regulations covering a wide range of matters including health and safety, employment and other operating issues. The company is continually ensuring that the compliance demands of these regulatory factors are met and the directors have ensured that the policies and culture in relation to this are well communicated to all employees.
Finance risk
The company funded its operations for the year through a combination of retained profits and internally generated cash and asset-backed finance arrangements.
Economic risk
The company operates predominantly in the agricultural sector which can be susceptible to adverse economic conditions, such as weather, harvest yields and soft commodity prices, which can affect demand for our products.
Raw material costs of steel and component parts fluctuate due to global supply chain issues and market forces. The directors monitor this risk.
The company mitigates these risks by ensuring that it continues to improve its production processes, improving quality and maintaining the strong brand image built from over 50 years of trading, controlling costs by fixing purchase prices and other procurement strategies and by providing consistent, supportive after sales service to its customer base.
RICHARD WESTERN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 2 -
Development and performance
In the 11 month period to 31 December 2023, the business returned a profit before tax of £411,000 (year ended 31 January 2023 - £351,000), from a turnover of £11,014,000 (Jan 2023 - £14,056,000) and gross margin of £2,342,000 (Jan 2023 - £1,877,000).
The reduced pro-rated turnover for the period reflects challenging market conditions after a very strong financial year to 31 January 2023. Despite this, a strong focus on cost control had a positive impact on results with gross margin increasing to 21.3% for the period ended 31 December 2023 versus 13.4% for the prior year ended 31 January 2023.
The period ended with £2,350,000 of net assets, which shows the continuing strength of the balance sheet. The directors consider the business to be well-positioned to address the challenges and opportunities that the coming year will bring. These could include weak demand in the short term as consumer confidence reduces in the face of adverse macroeconomic conditions. Whilst the potential insolvency of our competitors presents us with an opportunity, those that remain are likely to create an environment of strong competition. However, the directors remain confident the company's position and reputation in the marketplace, both domestic and overseas, will continue to increase.
Key performance indicators
The performance of the business is monitored using several key performance indicators, most notably turnover growth and profit before tax. These KPIs are discussed above.
Mr Angus Western
Director
29 November 2024
RICHARD WESTERN LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the period ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the manufacture and sale of agricultural machinery.
Results and dividends
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Mr Richard Western
Mr Angus Western
Research and development
During the period, we engaged in research and development activities to further improve the competitiveness of our products in the marketplace.
Future developments
The company anticipates increasing productivity of operations and increasing export sales as a percentage of turnover.
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.
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.
RICHARD WESTERN LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 4 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr Angus Western
Director
29 November 2024
RICHARD WESTERN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RICHARD WESTERN LIMITED
- 5 -
Opinion
We have audited the financial statements of Richard Western Limited (the 'company') for the period ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, 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 December 2023 and of its profit for the period 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 period 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.
RICHARD WESTERN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RICHARD WESTERN LIMITED (CONTINUED)
- 6 -
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.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with the company's professional advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
RICHARD WESTERN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RICHARD WESTERN LIMITED (CONTINUED)
- 7 -
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.
Mr James Rylatt
Senior Statutory Auditor
For and on behalf of Jamieson Alexander Audit Limited
29 November 2024
Chartered Accountants
Statutory Auditor
Unit B2
The Point
Weaver Road
Lincoln
LN6 3QN
RICHARD WESTERN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 8 -
Period
Year
ended
ended
31
31
Dec 2023
Jan 2023
Notes
£000's
£000's
Turnover
3
11,014
14,056
Cost of sales
(8,672)
(12,179)
Gross profit
2,342
1,877
Distribution costs
(266)
(191)
Administrative expenses
(1,594)
(1,289)
Operating profit
4
482
397
Interest receivable and similar income
8
1
Interest payable and similar expenses
9
(71)
(47)
Profit before taxation
411
351
Tax on profit
10
(79)
(5)
Profit for the financial period
332
346
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RICHARD WESTERN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 9 -
Period
Year
ended
ended
31
31
Dec 2023
Jan 2023
£000's
£000's
Profit for the period
332
346
Other comprehensive income
-
-
Total comprehensive income for the period
332
346
RICHARD WESTERN LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
Dec 2023
Jan 2023
Notes
£000's
£000's
£000's
£000's
Fixed assets
Tangible assets
11
2,556
2,052
Current assets
Stocks
13
2,226
1,533
Debtors
14
1,096
2,473
Cash at bank and in hand
7
282
3,329
4,288
Creditors: amounts falling due within one year
15
(1,811)
(3,148)
Net current assets
1,518
1,140
Total assets less current liabilities
4,074
3,192
Creditors: amounts falling due after more than one year
16
(1,173)
(923)
Provisions for liabilities
Provisions
18
185
43
Deferred tax liability
19
366
208
(551)
(251)
Net assets
2,350
2,018
Capital and reserves
Called up share capital
21
1
1
Profit and loss reserves
2,349
2,017
Total equity
2,350
2,018
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 29 November 2024 and are signed on its behalf by:
Mr Angus Western
Director
Company registration number 01296660 (England and Wales)
RICHARD WESTERN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£000's
£000's
£000's
Balance at 1 February 2022
1
1,671
1,672
Year ended 31 January 2023:
Profit and total comprehensive income
-
346
346
Balance at 31 January 2023
1
2,017
2,018
Period ended 31 December 2023:
Profit and total comprehensive income
-
332
332
Balance at 31 December 2023
1
2,349
2,350
RICHARD WESTERN LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 12 -
Dec 2023
Jan 2023
Notes
£000's
£000's
£000's
£000's
Cash flows from operating activities
Cash generated from operations
25
24
655
Interest paid
(71)
(47)
Income taxes refunded
1
Net cash (outflow)/inflow from operating activities
(46)
608
Investing activities
Purchase of tangible fixed assets
(215)
(492)
Proceeds from disposal of tangible fixed assets
21
1
Repayment of loans
26
(9)
Interest received
1
Net cash used in investing activities
(168)
(499)
Financing activities
Proceeds from new bank loans
48
356
Repayment of bank loans
(269)
(153)
Net cash (used in)/generated from financing activities
(221)
203
Net (decrease)/increase in cash and cash equivalents
(435)
312
Cash and cash equivalents at beginning of period
282
(30)
Cash and cash equivalents at end of period
(153)
282
Relating to:
Cash at bank and in hand
7
282
Bank overdrafts included in creditors payable within one year
(160)
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Richard Western Limited is a private company limited by shares incorporated in England and Wales. The registered office is D'Urbans Farm, Framlingham, Woodbridge, Suffolk, IP13 9RP.
1.1
Reporting period
The financial statements have been prepared for an 11 month period ended 31 December 2023 in order to align the company's reporting period with the calendar year.
Comparative amounts presented in the financial statements for the full year ended 31 January 2023 (including the related notes) are not entirely comparable.
1.2
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 thousand.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.3
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.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.5
Tangible fixed assets
Tangible fixed assets are initially and subsequently measured at cost, net of depreciation and any impairment losses. Tangible fixed assets with a cost of less than £5,000 are written off to the profit and loss account.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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 buildings
50 years on straight line basis
Leasehold land and buildings
Life of lease
Plant and equipment
25% reducing balance basis/ 8 years on straight line basis
Office equipment
25% reducing balance basis
Motor vehicles
25% reducing balance basis
Freehold land and assets in the course of construction are not depreciated.
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The 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.
1.7
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.
Stocks are valued under the first-in, first-out method.
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.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.8
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.
1.9
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.
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.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
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.
1.10
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.
1.11
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.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.
1.12
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
Dec 2023
Jan 2023
£000's
£000's
Other revenue
Interest income
-
1
Turnover, which is derived in all material respects from a single class of business, arises in the United Kingdom save for £1,424,000 (Jan 2023 - £2,455,000) of export sales.
4
Operating profit
Dec 2023
Jan 2023
Operating profit for the period is stated after charging/(crediting):
£000's
£000's
Exchange losses
1
Depreciation of owned tangible fixed assets
289
204
Loss/(profit) on disposal of tangible fixed assets
3
(1)
Operating lease charges
2
-
5
Auditor's remuneration
Dec 2023
Jan 2023
Fees payable to the company's auditor and associates:
£000's
£000's
For audit services
Audit of the financial statements of the company
12
12
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 19 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
Dec 2023
Jan 2023
Number
Number
Production
48
48
Administration
13
12
Distribution
1
1
Total
62
61
Their aggregate remuneration comprised:
Dec 2023
Jan 2023
£000's
£000's
Wages and salaries
2,091
2,284
Social security costs
211
243
Pension costs
41
37
2,343
2,564
7
Directors' remuneration
Dec 2023
Jan 2023
£000's
£000's
Remuneration for qualifying services
84
69
Company pension contributions to defined contribution schemes
9
9
93
78
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (Jan 2023 - 1).
8
Interest receivable and similar income
Dec 2023
Jan 2023
£000's
£000's
Interest income
Other interest income
1
9
Interest payable and similar expenses
Dec 2023
Jan 2023
£000's
£000's
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
71
47
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 20 -
10
Taxation
Dec 2023
Jan 2023
£000's
£000's
Current tax
Adjustments in respect of prior periods
(78)
Deferred tax
Origination and reversal of timing differences
157
54
Other adjustments
(49)
Total deferred tax
157
5
Total tax charge
79
5
At the Spring Budget 2021, HM Government announced the main rate of corporation tax would increase from 19% to 25% from 1 April 2023.
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
Dec 2023
Jan 2023
£000's
£000's
Profit before taxation
411
351
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (Jan 2023: 19.00%)
103
67
Tax effect of expenses that are not deductible in determining taxable profit
40
Adjustments in respect of prior years
(78)
Permanent capital allowances in excess of depreciation
(38)
Deferred tax adjustments in respect of prior years
14
(49)
Deferred tax at enacted rate
25
Taxation charge for the period
79
5
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 21 -
11
Tangible fixed assets
Freehold buildings
Leasehold land and buildings
Plant and equipment
Office equipment
Motor vehicles
Total
£000's
£000's
£000's
£000's
£000's
£000's
Cost or valuation
At 1 February 2023
814
277
2,897
16
201
4,205
Additions
759
4
54
817
Disposals
(128)
(128)
Transfers
38
(38)
At 31 December 2023
814
277
3,566
20
217
4,894
Depreciation and impairment
At 1 February 2023
78
277
1,681
16
101
2,153
Depreciation charged in the period
14
245
1
29
289
Eliminated in respect of disposals
(104)
(104)
Transfers
18
(18)
At 31 December 2023
92
277
1,840
17
112
2,338
Carrying amount
At 31 December 2023
722
1,726
3
105
2,556
At 31 January 2023
736
1,216
100
2,052
Freehold land and buildings with a carrying amount of £722,000 (Jan 2023 - £736,000) have been pledged to secure a bank loan and overdraft facility of the company.
Included within the carrying value of tangible fixed assets are assets held under hire purchase contracts with a total carrying value of £1,439,000 (Jan 2023 - £892,000). The amounts falling due are secured on the underlying assets.
12
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Weeks Trailers Limited
D'Urbans Farm, Framlingham, Woodbridge, Suffolk, IP13 9RP
Dormant
Ordinary
100.00
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 22 -
13
Stocks
Dec 2023
Jan 2023
£000's
£000's
Raw materials and consumables
1,042
885
Work in progress
325
295
Finished goods and goods for resale
859
353
2,226
1,533
During the year, a provision for obsolete stock of £63,000 was recognised (Jan 2023: £nil). The total provision at the reporting date was £63,000.
14
Debtors
Dec 2023
Jan 2023
Amounts falling due within one year:
£000's
£000's
Trade debtors
960
2,391
Corporation tax recoverable
83
5
Other debtors
20
67
Prepayments and accrued income
33
10
1,096
2,473
15
Creditors: amounts falling due within one year
Dec 2023
Jan 2023
Notes
£000's
£000's
Bank loans and overdrafts
17
504
213
Trade creditors
695
1,365
Taxation and social security
43
226
Other creditors
469
1,186
Accruals and deferred income
100
158
1,811
3,148
The company utilises a 'with recourse' invoice financing facility which is secured by trade debtors. At the reporting date, a total of £470,000 (Jan 2023 - £1,178,000) was owed by the company.
16
Creditors: amounts falling due after more than one year
Dec 2023
Jan 2023
Notes
£000's
£000's
Bank loans and overdrafts
17
1,173
923
In addition to a fixed charge, long-term borrowings are secured by fixed and floating charges over all assets of the company, including present and future property, chattels, book and other debts and uncalled share capital.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
16
Creditors: amounts falling due after more than one year
(Continued)
- 23 -
Amounts included above which fall due after five years are as follows:
Payable by instalments
164
194
17
Loans and overdrafts
Dec 2023
Jan 2023
£000's
£000's
Bank loans
1,517
1,136
Bank overdrafts
160
1,677
1,136
Payable within one year
504
213
Payable after one year
1,173
923
18
Provisions for liabilities
Dec 2023
Jan 2023
£000's
£000's
Warranty provision
35
43
Legal claim provision
150
-
185
43
Movements on provisions:
Warranty provision
Legal claim provision
Total
£000's
£000's
£000's
At 1 February 2023
43
-
43
Additional provisions in the year
12
150
162
Utilisation of provision
(20)
-
(20)
At 31 December 2023
35
150
185
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 24 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Dec 2023
Jan 2023
Balances:
£000's
£000's
Accelerated capital allowances
518
392
Tax losses
(152)
(184)
366
208
Dec 2023
Movements in the period:
£000's
Liability at 1 February 2023
208
Charge to profit or loss
158
Liability at 31 December 2023
366
The deferred tax liability set out above is expected to reverse as tangible fixed assets are depreciated over their useful economic lives and relates in all material respects to accelerated capital allowances that are expected to mature within the same period and tax losses.
20
Retirement benefit schemes
Dec 2023
Jan 2023
Defined contribution schemes
£000's
£000's
Charge to profit or loss in respect of defined contribution schemes
41
37
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.
Pension contributions of £5,000 were outstanding at the reporting date (Jan 2023 - £3,000).
21
Share capital
Dec 2023
Jan 2023
Dec 2023
Jan 2023
Ordinary share capital
Number
Number
£000's
£000's
Issued and fully paid
Ordinary 'A' shares of of £1 each
600
600
1
1
Ordinary 'B' shares of of £1 each
400
400
-
-
The ordinary 'B' shares rank, in all material respects, pari passu with the class 'A' shares.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 25 -
22
Related party transactions
Transactions with related parties
During the period the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
Dec 2023
Jan 2023
Dec 2023
Jan 2023
£000's
£000's
£000's
£000's
Other entities controlled by the same ultimate controlling party
19
310
48
428
Dec 2023
Jan 2023
Amounts due to related parties
£000's
£000's
Other entities controlled by the same ultimate controlling party
47
54
The amounts due to, and from, related parties are unsecured and will be cash settled.
The following amounts were outstanding at the reporting end date:
Dec 2023
Jan 2023
Amounts due from related parties
£000's
£000's
Other entities controlled by the same ultimate controlling party
-
18
The amounts due to, and from, related parties are unsecured and will be cash settled.
23
Directors' transactions
In both the current and preceding financial years, the company occupied land owned by a director at a peppercorn rent.
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£000's
£000's
£000's
£000's
-
7
-
(7)
-
-
19
15
(34)
-
26
15
(41)
-
24
Ultimate controlling party
The ultimate controlling party is Mr R Western, a director and the majority shareholder.
RICHARD WESTERN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 26 -
25
Cash generated from operations
Dec 2023
Jan 2023
£000's
£000's
Profit for the period after tax
332
346
Adjustments for:
Taxation charged
79
5
Finance costs
71
47
Investment income
(1)
Loss/(gain) on disposal of tangible fixed assets
3
(1)
Depreciation and impairment of tangible fixed assets
289
204
Increase in provisions
142
9
Movements in working capital:
(Increase)/decrease in stocks
(693)
321
Decrease/(increase) in debtors
1,429
(310)
(Decrease)/increase in creditors
(1,628)
35
Cash generated from operations
24
655
26
Analysis of changes in net debt
1 February 2023
Cash flows
Non cash movements
31 December 2023
£000's
£000's
£000's
£000's
Cash at bank and in hand
282
(275)
-
7
Bank overdrafts
(160)
-
(160)
282
(435)
-
(153)
Borrowings excluding overdrafts
(1,136)
(983)
602
(1,517)
(854)
(1,418)
602
(1,670)
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