Registered Number:
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
COMPANY INFORMATION
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WATSON & HILLHOUSE LIMITED
CONTENTS
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WATSON & HILLHOUSE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2024
The Directors present their strategic report for the year ended 30 November 2024.
We are pleased to present the accounts for the financial year ending November 2024, which have again returned very strong trading results.
Although the trading environment has continued to present a number of challenges, in particular slow economic growth and increased cost of living, the Company has continued to see strong turnover and operating profit. In particular, Own Hire Revenue and Agency Sales have seen increases to the prior year, with a notable reduction in Third Party Hire revenue, where increases to our own fleet has unsurprisingly resulted in a reduced need for rehired plant. The Company continues to review the plant and equipment requirements and has made further investments during the year, with the value of this being circa £1.0m. The strategy of continued investment will continue, with a number of capital items committed to during 2025. The financial position at the year end was considered satisfactory by the Directors of the Company to enter its operations for the following year.
The Company considers its financial key performance indicators to be growth in turnover, gross profit margin and EBITDA.
Turnover has decreased by 4.8% in the year (2023 – increase of 33.5%), with this being predominantly attributable to a reduction in re-hire revenue. Gross profit margin has increased to 38.9% (2023 – 38.4%) resulting in gross profit of £5,072,106 (2023 - £5,266,813). The Company reports an EBITDA of £3,019,651 (2023 - £3,253,128).
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WATSON & HILLHOUSE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
The key risks to the Company include, but are not limited to, compliance with legislative and regulatory requirements, business continuity and actions of customers, suppliers and competitors.
Financial instruments: The Company’s principal financial instruments are trade debtors and trade creditors arising directly from operations. The Company ensures that there is sufficient liquid resources to meet its liabilities and trade debtors are managed through regular review to ensure the cash flow risk is reduced to an acceptable level. Some of our key suppliers that we represent are based outside of the UK and we mitigate any exchange risk by using forward exchange arrangements provided by our banking partners. Liquidity and cash flow risk: The Company’s proactive strategy of investment is supported by our strong cash position and the banking facilities that we have in place. We manage this by monitoring cash daily and preparing detailed cash flow forecasts so that any potential funding requirements are identified at an early stage. Supply and price risk: The suppliers we represent are well established with strong brands who also trade globally, some of which we have worked with for over forty years. Given the strength of the suppliers we work with and our position in the UK market, as a leading provider of piling and foundation equipment, we are well placed to manage any trading risk. Credit Risk Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers, with credit insurance arrangements also in place. All credit levels and amounts outstanding are reviewed regularly.
This report was approved by the board on 14 March 2025 and signed on its behalf.
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WATSON & HILLHOUSE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2024
The Directors present their report and the financial statements for the year ended 30 November 2024.
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
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;
∙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 £1,532,953 (2023 - £1,705,775).
Dividends amounting to £1,091,008 (2023 - £206,008) were paid in the year. The Directors do not recommend the payment of a final dividend (2023 - £Nil).
The Directors who served during the year were:
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WATSON & HILLHOUSE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
Although economic growth in the UK over the coming year is predicted to be slow, investment in major infrastructure projects is expected to continue. Therefore, we are forecasting trading to maintain similar levels as seen for the year ending November 2024, both in terms of Hire and Agency Sale income, with the order book reflecting this.
Furthermore, the portfolio of equipment offered by some of the brands we represent continues to grow, which is allowing us to engage with a wider customer base across the construction sector. The Company will continue the strategy to invest in the hire fleet, which includes the opportunity for more environmentally friendly items of plant. The Company has made capital commitments for the coming months which is in excess of £900k, with this relating to additions to the hire fleet and further spend is likely during the remainder of the financial year. We pride ourselves on the quality of services we provide, which is only possible as a result of our employee’s commitment and skills. We continue to ensure the working environment, training and working arrangements are in keeping with industry best practice and market conditions.
Details of the Company's risk management objective and policies, including its use of financial instruments and key risks to which it is exposed, are included in the Strategic Report.
There have been no significant events affecting the Company since the year end.
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WATSON & HILLHOUSE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
On 28 March 2024 our auditor, SB Audit LLP, merged with Sumer Auditco Limited.
Accordingly SB Audit LLP formally resigned as the Company's auditor with the Directors duly appointing Sumer Auditco Limited to fill the vacancy arising. The auditor, Sumer Auditco Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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WATSON & HILLHOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WATSON & HILLHOUSE LIMITED
We have audited the financial statements of Watson & Hillhouse Limited (the 'Company') for the year ended 30 November 2024, which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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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WATSON & HILLHOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WATSON & HILLHOUSE LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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.
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.
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WATSON & HILLHOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WATSON & HILLHOUSE LIMITED (CONTINUED)
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WATSON & HILLHOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WATSON & HILLHOUSE LIMITED (CONTINUED)
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 Auditors' 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.
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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience and through discussions and enquiries of Directors and management. During the engagement team briefing, the outcomes of these discussions were shared with the team, as well as consideration as to where and how fraud may occur in the Company. The following laws and regulations were identified as being of significance to the Company: • Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards and UK Company Law. •Those laws and regulations considered to have an indirect effect on the financial statements including The Health & Safety Act 1974, GDPR, anti-bribery and corruption, human rights and Employment law. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the Company complies with such regulations; enquiries of management and those charged with governance concerning any actual or potential litigation or claims, inspection of relevant legal documentation, review of board minutes, testing of journal entries, performance of analytical review to identify any unexpected movements in account balances which may be indicative of fraud. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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 Auditors' Report.
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WATSON & HILLHOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WATSON & HILLHOUSE LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Fitzroy House
Crown Street
Suffolk
IP1 3LG
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WATSON & HILLHOUSE LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
REGISTERED NUMBER: 01075189
BALANCE SHEET
AS AT 30 NOVEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 17 to 31 form part of these financial statements.
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WATSON & HILLHOUSE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
Watson & Hillhouse Limited is a private company limited by shares and incorporated and domiciled in England and Wales. The address of the registered office is 51 Whitehouse Road, Ipswich, Suffolk, IP1 5NT.
The principal activity of the Company is the sale and hire of plant.
2.Accounting policies
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:
The financial statements are drawn up on a going concern basis.
The Directors have made enquiries and reviewed forecasts and believe that the Company is in a strong position to continue to trade and meet its liabilities as they fall due for a period of 12 months from the date of approval of these financial statements. Turnover in respect to the sale of plant is recognised upon dispatch. Turnover in respect to the hire of plant is recognised over the period to which the service relates.
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line or reducing balance method.
Depreciation is provided on the following basis:
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 profit or loss.
At each balance sheet 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 profit or loss.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements,
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
2.Accounting policies (continued)
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 debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
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 profit or loss.
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 the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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.
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
2.Accounting policies (continued)
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
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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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
2.Accounting policies (continued)
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include: Stock Stocks are stated at the lower of cost and net realisable value, after making due allowance for the stock provision. Management reviews the stock holdings and make a provision based upon historical experience where the recoverable amount on a stock item has fallen below the cost. Useful economic life of assets Depreciation is charged so as to allocate the cost of assets their residual value over their estimated useful lives. The assets' residual values, useful lives and depreciation methods are reviewed and adjusted prospectively if there is an indication of a significant change since the last reporting date.
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
12.Taxation (continued)
There were no factors that may affect future tax charges.
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
Share premium account
Capital redemption reserve
Profit and loss account
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 £52,250 (2023 - £66,382). Contributions totalling £10,932 (2023 - £11,530) were payable to the fund at the balance sheet date and are included in creditors.
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WATSON & HILLHOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
25.Other financial commitments
At 30 November 2024 the Company had foreign currency forward contracts to buy:
- 1.2m Euros at exchange rates against GBP between 1.1862 and 1.1939 - 70.3m Japanese Yen at exchange rates against GBP of 192.6178 At 30 November 2023 the Company had foreign currency forward contracts to buy: - 620k Euros at exchange rates against GBP between 1.1391 and 1.1484 - 68.2m Japanese Yen at exchange rates against GBP of 182.6845
The ultimate controlling party is Mr R H G Watson by virtue of his shareholding in the Company.
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