Registered number: 01665017
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
CONTENTS
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Independent Auditor's Report
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Consolidated Statement of Comprehensive Income
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2022
The Directors present the Group Strategic Report for the year ended 31 August 2022.
The Directors acknowledge the profit level for the year and consider that the position at the Balance Sheet date is satisfactory and that future trading will continue to be profitable.
The Group operates in an increasingly challenging and competitive environment. In spite of the challenges faced, revenue increased by 33% from 2021. Net assets at the year end amounted to £39.5m and investments in tangible fixed assets over the past two years amounted to £8.2m. Continued investment and strong operational performance provide a solid platform for the future growth and success of the Group.
There is currently no material plan to change the operations of the group during the coming financial year and as a result the group is expected to operate at similar levels to the year ended 31 August 2023.
Principal risks and uncertainties
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The Group is subject to commercial uncertainties regarding future pricing in respect of power generated, and demand for its fabrication services.
The Group's principal financial instruments comprise cash (via intra-Group balances) and various items, such as trade debtors and trade creditors, that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations.
The existence of these financial instruments exposes the group to a number of financial risks. The main risks arising from the Group's financial instruments are credit risk and currency risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
Principal risks and uncertainties (continued)
Market risk
Market risk encompasses currency risk and interest rate risk. The Group's policies for managing interest rate risk are considered along with those for managing cash flow interest rate risk and are set out in the sub section below.
Currency risk
The Group is exposed to transaction foreign exchange risk. If considered necessary, transaction exposures, including· those associated with forecast transactions, are hedged when known, principally using forward currency contracts. Whilst the aim is to achieve an economic hedge the group does not adopt an accounting policy of hedge accounting for these financial statements.
Interest rate risk
The Group finances its operations through a mixture of retained profits and loans from Directors and commonly held companies, the latter generally without interest.
Credit risk
The Group seeks to manage its credit risk by dealing with established customers or otherwise checking the creditworthiness of new customers, establishing clear contractual relationships with those customers, and by identifying and addressing any credit issues arising in a timely manner.
In order to manage credit risk the Directors set limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history.
Key performance indicators
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Revenue
Revenue for the year ended 31 August 2022 was £40,990k (2021 - £30,766k).
Gross profit
Gross profit for the year was £10,534k (2021 - £8,403k).
Net assets
Net worth of the Group is regarded as a key performance indicator. At 31 August 2022 the net assets of the Group were £38,749k (2021 - £35,289k).
Debtor days
Debtor days are regularly monitored. As at 31 August 2022, debtor days were 42 (2021 - 54).
This report was approved by the board and signed on its behalf.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2022
The Directors present their report and the financial statements for the year ended 31 August 2022.
Directors' responsibilities statement
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The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Group'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;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Group is engaged in fabrication of metal, electrical and mechanical equipment, the generation and sale of electricity and the rental of industrial plant.
The profit for the year, after taxation, amounted to £3,460k (2021 - £2,200k).
Post year end, a dividend of £2k has been declared and paid (2021 - £Nil).
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
UK businesses are currently facing many uncertainties such as the consequences of Brexit, COVID-19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
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.
The Group and Company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
In forming a conclusion on going concern, The Directors have considered the Group and the Company's likely business activities for the period of 12 months from the date of approval of these financial statements, material elements of which are unaffected by the global economy, the strong forecast cash generation produced by current activities, and the financial resources available to the business from its own forecast cash resources, the financial resources available to the company from other companies under common control, and the supportive relationship with the Group and Company's bankers. Taking all of these into consideration, the Directors have concluded that the Group and Company will continue to operate as a going concern for the foreseeable future, and accordingly the financial statements are prepared on a going concern basis.
The Director who served during the year was:
Subsequent to the year end W J Wykes was appointed as a Director on 14 September 2022.
Matters covered in the Group Strategic Report
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As permitted by Paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and reports) Regulations 2008 certain matters which are required to be disclosed in the Directors' report have been omitted as they are included in the Strategic Report instead. These matters relate to business review, future developments, principal risk and uncertainties and key performance indicators.
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 Directors are aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and
∙the Directors have 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 and the Group's auditor is aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group or Parent Company since the year end.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
The auditor, 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 their behalf.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WYKES ENGINEERING CO. (RUSHDEN) LIMITED
Opinion
We have audited the financial statements of Wykes Engineering Co. (Rushden) Limited (the ‘Parent Company’) and its subsidiaries (the 'Group') for the year ended 31 August 2022 which comprise of the Consolidated Statement of Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated Consolidated Statement of Cash Flows, the Consolidated and Company 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 Group and Parent Company's affairs as at 31 August 2022 and of the Group's 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 Group and Parent 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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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WYKES ENGINEERING CO. (RUSHDEN) LIMITED
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 Group 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 Group 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 Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 Parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of Directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WYKES ENGINEERING CO. (RUSHDEN) LIMITED
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 Group and Parent 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 Group or the Parent 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 Group and Parent 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 and 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 Group and Parent 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 Group and Parent 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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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WYKES ENGINEERING CO. (RUSHDEN) LIMITED
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, depreciation and deferred tax and revenue recognition (which we pinpointed to the occurrence assertion).
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 Group and Parent 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 Group and Parent 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 Group and Parent Company and the Group and Parent Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Yuvan Deena (Senior statutory auditor)
for and on behalf of
Mazars LLP
Chartered Accountants and Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
31 August 2023
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2022
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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Profit for the year attributable to:
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Owners of the parent company
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There were no recognised gains and losses for 2022 or 2021 other than those included in the Consolidated Statement of Comprehensive Incone.
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There was no other comprehensive income for 2022 (2021 - £Nil).
The Consolidated Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
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The notes on pages 16 to 37 form part of these financial statements.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
REGISTERED NUMBER: 01665017
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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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 16 to 37 form part of these financial statements.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
REGISTERED NUMBER: 01665017
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2022
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Debtors: amounts falling due within one year
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Cash and cash equivalents
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Creditors: amounts falling due within one year
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Profit and loss account brought forward
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Profit and loss account carried forward
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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 16 to 37 form part of these financial statements.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2022
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Comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2021
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At 1 September 2020 (as restated)
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Comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 16 to 37 form part of these financial statements.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2022
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Comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2021
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Comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 16 to 37 form part of these financial statements.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2022
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible fixed assets
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Profit on disposal of tangible fixed assets
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(Increase)/decrease in stocks
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Increase/(decrease) in creditors
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash used in investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net (decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 16 to 37 form part of these financial statements.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
Wykes Engineering Co. (Rushden) Limited is a private limited company, registered number 01665017, limited by share capital and incorporated in England and Wales. The registered office address and principal place of business is Goosey Lodge, Wymington, Rushden, Northants, NN10 9LU.
The principal activity of the Group is general metal fabrication and mechanical engineering, the generation and sale of electricity and the rental of industrial plant.
The functional currency of the Company is Pounds Sterling as this is the currency of the primary economic environment in which the Company operates.
Monetary amounts in these financial statements are rounded to the nearest whole thousand £.
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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. lntercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
UK businesses are currently facing many uncertainties such as the consequences of Brexit, COVID 19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
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.
The Company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
In forming a conclusion on going concern, The Directors have considered the Group and the Company's likely business activities for the period of 12 months from the date of approval of these financial statements, material elements of which are unaffected by the global economy, the strong forecast cash generation produced by current activities, and the financial resources available to the business from its own forecast cash resources, the financial resources available to the company from other companies under common control, and the supportive relationship with the Group and Company's bankers. Taking all of these into consideration, the Directors have concluded that the Group and Company will continue to operate as a going concern for the foreseeable future, and accordingly the financial statements are prepared on a going concern basis.
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Foreign currency translation
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Functional and presentation currency
The Group and Company's functional and presentational currency is GBP.
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 the Consolidated Statement of Comprehensive Income 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 Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Consolidated Statement of Comprehensive Income within 'other operating income'.
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue 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 revenue is recognised:
Fabrication of metal, electrical and mechanical equipment
Revenue from the fabrication of metal, electrical and mechanical equipment is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
• the Group has transferred the significant risks and rewards of ownership to the buyer (on completion);
• the amount of revenue can be measured reliably;
• it is probable that the Company will receive the consideration due.
Generation and sale of electricity
Revenue from the sale of electricity is recognised on an accruals basis at the point of generation and when all of the following conditions are satisfied:
• the Group has transferred the significant risks and rewards of ownership to the buyer;
• the amount of revenue 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.
Rental of plant
Revenue from the rental of plant is recognised on an accruals basis during the period of rental.
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
Finance costs are charged to the Consolidated 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.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
|
|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income 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 balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
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 balance sheet date.
Tangible fixed 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.
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
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Tangible fixed assets (continued)
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis:
Depreciation is provided on the following basis:
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Assets under construction
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Fixtures, fittings & computers
|
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15% - 33% reducing balance
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Land is not depreciated.
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 Consolidated Statement of Comprehensive Income.
Investments in subsidiaries are measured at cost less accumulated impairment.
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 first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
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 the Consolidated 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
|
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.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown as repayable on demand and form an integral part of the Group's cash management.
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
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.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance Sheet date.
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Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
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|
Financial instruments (continued)
|
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
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Judgments in applying accounting policies and key sources of estimation uncertainty
|
The Directors make estimates and assumptions concerning the future. The resulting accounting estimates
and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are outlined below.
Fixed assets
Depreciation is charged with due consideration to the useful economic life and residual value of fixed assets and the continuing appropriateness of the applied policy is considered on an annual basis by the Directors. There is judgement in assessing the appropriateness of the useful economic life and the criteria regarding when to commence depreciation following the installation of items of plant.
Deferred tax
The recognition of the deferred tax asset involves an assessment of likely future taxable profits and the consequent realisation of the deferred tax asset.
Critical areas of judgement
Currently K. J. Wykes Limited is jointly owned on a 50/50 basis between the Company and RenEco Ltd (formerly known as Ancillary Components Limited), another company owned by the Director D J Wykes. The Company exercises full control over K. J. Wykes Limited and its decisions and operations. Due to this judgement, the Company consolidates 100% of the position and reults of K. J. Wykes Limited into the group financial statements.
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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The whole of the turnover is attributable to the principal activities of the Group.
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Fabrication of metal, electrical and mechanical equipment
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Generation and sale of electricity
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|
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Analysis of turnover by country of destination:
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Renewable generation charge
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|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
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The operating profit is stated after charging/(crediting):
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Depreciation of tangible fixed assets
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Profit on disposal of tangible fixed assets
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Fees payable to the Group's auditor for the audit of the Group's annual accounts
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Fees payable to the Group's auditor in respect of:
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Taxation compliance services
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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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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Administrative and management staff
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There were £1k of retirement benefits accruing to the Director (2021 - £1k).
The Director is considered to be the key management personnel.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
Interest payable and similar expenses
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Current tax on profits for the year
|
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Taxation on profit/(loss) on ordinary activities
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Factors affecting tax charge for the year
|
|
The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
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Expenses not deductible for tax purposes
|
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Adjustments to tax charge in respect of prior periods
|
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|
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Remeasurement of deferred tax for changes in tax rates
|
|
|
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Other differences leading to an increase (decrease) in the tax charge
|
|
|
|
Total tax charge for the year
|
|
|
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
12.Taxation (continued)
|
Factors that may affect future tax charges
|
The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase. Deferred tax is provided for at 25% as that was the substantially enacted rate at the reporting date.
|
Parent company profit for the year
|
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the Parent Company for the year was £3,130k (2021 - £2,061k).
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
|
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Assets Under Construction
|
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Transfers between classes
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|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
14.Tangible fixed assets (continued)
|
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Fixtures, Fittings & Computers
|
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Transfers between classes
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
14.Tangible fixed assets (continued)
|
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|
Assets Under Construction
|
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|
Fixtures, Fittings & Computers
|
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Transfers between classes
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|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
14.Tangible fixed assets (continued)
|
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Transfers between classes
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|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
|
Investments in subsidiary companies
|
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The following were subsidiary undertakings of the Company:
|
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|
Wykes Engineering (Europe) Limited
|
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* Please refer to note 3 in respect of the judgement applied by the Directors and management in these financial statements.
|
|
Raw materials and consumables
|
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|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
|
|
|
|
|
|
|
|
|
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|
|
Amounts owed by group undertakings
|
|
|
|
|
|
Amounts owed by related parties (note 26)
|
|
|
|
|
|
Short term loans to related parties (note 26)
|
|
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|
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|
|
Prepayments and accrued income
|
|
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|
Amounts owed by group undertakings, amounts owed by related parties and short term loans to related parties are repayable on demand. Within these amounts is a loan and accrued interest of £5,209k (2021 - £5,209k) and interest on the principal amount is charged at 1.7%. All other amounts are interest free.
|
|
Cash and cash equivalents
|
|
|
|
|
|
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|
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|
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|
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|
|
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
Creditors: Amounts falling due within one year
|
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Payments received on account
|
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Amounts owed to group undertakings
|
|
|
|
|
|
Amounts owed to related parties (note 26)
|
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|
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|
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Other taxation and social security
|
|
|
|
|
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|
Accruals and deferred income
|
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|
|
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|
Amounts owed to group undertakings and amounts owed to related parties are interest free and repayable on demand, with the exception of the balances as disclosed under note 26.
|
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|
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|
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|
Financial assets measured at fair value through profit or loss
|
|
|
|
|
|
Financial assets that are debt instruments measured at amortised cost
|
|
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|
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Financial liabilities measured at amortised cost
|
|
|
|
|
|
Financial assets measured at fair value through profit or loss comprise cash and cash equivalents.
|
|
Financial assets measured at amortised cost comprise trade debtors, amounts owed by group undertakings and related parties, other debtors, short term loans to other related parties and accrued income.
|
|
Financial liabilities measured at amortised cost comprise payments received on account, trade creditors, amounts owed to group undertakings and related parties, other creditors and accruals.
|
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
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Charged to the Consolidated Statement of Comprehensive Income
|
|
|
|
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|
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|
|
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|
|
Charged to the Consolidated Statement of Comprehensive Income
|
|
|
|
|
|
The deferred tax asset is made up as follows:
|
|
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|
|
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|
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|
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Accelerated capital allowances
|
|
|
|
|
|
Short term timing differences
|
|
|
|
|
|
|
|
|
|
|
|
WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
|
|
|
|
|
|
|
|
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|
|
3,000 (2021 - 3,000) Ordinary shares of £1.00 each
|
|
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|
|
|
|
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|
|
Allotted, called up and fully paid
|
|
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|
|
|
|
|
|
|
1,000 (2021 - 1,000) Ordinary shares of £1.00 each
|
|
|
|
Each share carries one voting right but not right to fixed income.
|
Profit and loss account
Includes all current and prior period retained profits and losses.
The Group entered into an omnibus guarantee and set off agreement with associated and commonly held companies in respect of any indebtedness to Lloyds Bank Plc in respect of a loan to Chelveston Renewable Energy Limited. This is secured by fixed and floating charges over all of the Company's assets.
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £169k (2021 - £43k). Contributions totalling £16k (2021 - £14k) were payable to the fund at the balance sheet date and are included in creditors.
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WYKES ENGINEERING CO. (RUSHDEN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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Related party transactions
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The Company and Group has taken advantage of the exemption available according with 'Section 33 'Related party disclosures' not to disclose transactions entered into between two or more members of a Group that are wholly owned.
During the year, the Group traded with a number of companies in which Mr D J Wykes is the director and/or shareholder, transactions are as follows:
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Entities over which individuals with significant influence or control over the entity have significant influence or control
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Amounts included in debtors
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Amounts included in creditors
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At 31 August 2022, the group owed £5,679k (2021 - £4,112k) to Mr D J Wykes and related parties in respect of director's loan accounts and related balances, which includes accrued interest. These balances are also included in amounts owed by related parties within creditors due under one year. £4,295k of this balance attracts interest at 8%, the remaining balance is interest free. The capital is repayable on demand.
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Post balance sheet events
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There have been no significant events affecting the Group or Company since the year end.
Mr D J Wykes is this group's controlling related party by virtue of his office and shareholding in the company.
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