Company registration number SC335165 (Scotland)
NWH GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
NWH GROUP LIMITED
COMPANY INFORMATION
Directors
R A Williams
C D Williams
N G Black
R F D Ray
C D Robertson
G A Hill
G Money
(Appointed 24 January 2024)
N I Williams
(Appointed 24 January 2024)
Company number
SC335165
Registered office
Unit 5 Mayfield Industrial Estate
Mayfield
Dalkeith
Midlothian
United Kingdom
EH22 4AD
Auditor
Azets Audit Services
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
Bankers
The Royal Bank of Scotland PLC
36 St Andrew Square
Edinburgh
United Kingdom
EH2 2YB
NWH GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 27
NWH GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Principal activities
The principal activity of the company in the year under review was the collection, recycling, and production of resources in addition to other ancillary services. Waste collection services to the hospitality, retail, energy, healthcare, local authorities, commercial, industrial and construction sectors are provided.
Waste such as glass, food, dry mixed recycling, general residual, cardboard, paper, plastics, inert demolition spoil, soils, wood, green garden, asbestos, incinerator bottom ash, household, road sweepings, civic amenity is collected. This is undertaken by the fleet of trade refuse vehicles, skips, tippers, grabs and articulated vehicles which transport it to the Material Recycling Facilities.
Valuable products - cardboard, paper, washed sands & gravels, concrete, metals, refuse derived fuel, biomass, topsoil and animal bedding - are produced.
Headquartered in Midlothian, in central Scotland, the business services all of Scotland and the North East of England from ten sites.
Review of business performance
The company achieved record turnover of £52.2m (2022: £49.2m) in the year to 30 September 2023; an increase of 6%. This generated an operating profit of £2.5m (2022: £1.8m) and a profit after tax of £1.3m (2022: £1.7m).
The FY23 trading performance was resilient and produced the Company’s highest revenue and profit to date in a challenging economic environment; the escalation of the Ukrainian war, volatility following the Truss premiership, supply chain challenges, higher fuel costs, increasing finance costs and rising people costs.
Our Collection and Compaction (Trade Waste) division continued to expand with consistent quality customer service and incremental infill selling underpinning the trading performance. In a sluggish market impacted by the Construction and Demolition sector slowdown, Complementary Services vehicles struggled to achieve high utilisation. Collection, Processing & Disposal grew significantly in the year with the new aggregate washplant processing well and strong returns seen from our wood processing site in Petterden.
2024 Outlook
The start of 2024 has been extremely difficult for everyone at NWH following the passing of our CEO Mark Williams. He led and grew the business with unparalleled knowledge, force of personality, commitment and purpose for over 20 years. His devotion to the NWH Family was and remains inspirational. Mark’s passing has undoubtedly left a huge void in the business but, under the stewardship of the senior management team that Mark established during his tenure, the business is well positioned to build on recent trading success. We know Mark would have wanted us to keep driving the business forward, and for us to make him proud.
Under the leadership of our Managing Director Gavin Money, the business is well placed to build on the robust 2023 trading performance. Gavin joined from a large competitor where he worked for five years, as Regional General Manager and latterly Operations Director.
As the uncertain economic climate and softer markets ease, the diversity of our sectors, geographies and service offering, as well as the significant amount of repeat work we undertake, will accelerate further growth.
The business strategy was refreshed. Our Purpose, Values, Mission and Vision hold true and remain unchanged.
The business is focused on delivering sustainable growth across all three divisions - Collection & Compaction, Complementary Services and Collection, Processing & Disposal. Margin improvement will come from increased efficiencies from the new plants at both our Aggregates and Wood recycling facilities, large muckshifting jobs and operationally efficient route in-fill selling. The investment in recent senior sales appointments has been the catalyst for some recent, large tender wins.
Acquisition targets which meet the business’ strategy and will continue to be considered.
NWH GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Our waste processing diverts from landfill and our production of secondary materials results in the avoidance of CO2 in displacing traditional, extractive raw materials. We shall continue to promote and leverage our work that significantly reduces carbon emissions and pressure on the Earth’s limited natural resources through our business model.
Key Performance Indicators ("KPIs")
One of the main tools to address risk is the extensive use of KPIs and continuous commercial planning within the long term strategic framework. As part of a rolling monthly performance cycle, the company monitors KPIs such as new business pipeline, service levels, collection movements and tonnages, vehicle and plant utilisation, processing throughput, profitability and liquidity on a daily and weekly basis which are reviewed both operationally and at board level.
Principal Risks and Uncertainties
The nature of the company's business and strategy are subject to a number of risks. The directors are of the opinion that the adopted risk management processes assist to identify, monitor and mitigate these risks.
Risk Management Committees
The company operates a Risk, Health and Safety Committee with the purpose of reviewing and making recommendations on the adequacy and reliability of risk identification, mitigation and reporting. It fulfils the Board’s corporate governance and supervisory responsibility for risk, health and safety and for developing policy to ensure best practice as well as the health and wellbeing of staff, contractors and visitors to the sites.
The committee meets quarterly ensuring the objectives, measures and targets of the company’s policy are appropriate, adhered to and reported on. Risks addressed include regulatory, people & safety, business continuity, legal, reputational, environmental and community. A risk management plan is prepared and reviewed annually.
The Safety, Health, Environment, Fire and Quality Committee meets monthly and comprises all site managers. Its findings feed into the monthly Operational and Main Board meetings as well as the Risk, Health and Safety Committee.
The principal risks and uncertainties that affect the business are:
Compliance
This is the largest risk facing the company; from health and safety legalisation, environmental regulation and vehicular rules. Compliance has maximum focus in the business and is addressed through constant review and is one of the company’s core values. The Compliance Director sits on the Board with responsibility for delivering a fully compliant business.
Macroeconomic climate
A challenging economic environment has been created by a cycle of interest rate rises, increased costs and geopolitical crises. The company’s strategy is robust enough to counter these headwinds.
Environment
The company is cognisant of its environmental responsibilities and processes and systems are in place to manage the impact on, as well as protect and enhance, the environment. There is strict adherence to the SEPA and EA waste management regulations.
Credit risk
The company's principal financial assets are bank balances, cash and trade debtors. The company's credit risk is primarily attributable to its trade debtors. Credit Risk is managed by monitoring the aggregate amount and duration of exposure to any one customer. Trade debtors are insured on an individual account basis. The amounts presented in the balance sheet are net of allowances for doubtful debts, estimated by company's management based on prior experiences and their assessment of the current environment.
Liquidity risk
The financial risk management policy is to ensure continuity of funding for operations via facilities where limits have been established based on growth requirements of the business, together with inter-company debt and through acquiring an element of the Group's fixed assets under finance leases as appropriate. The group has an Invoice Finance Facility with RBS, providing flexibility to meet the growth requirements of the business. No treasury transactions or derivatives are entered into.
NWH GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
Legislation
Waste recycling is a regulated sector which can impact the revenue opportunities. The Scottish Government and its delivery body, Zero Waste Scotland, have introduced ambitious waste recycling policies such as waste reduction targets for food and a landfill ban on municipal biodegradable waste by next year. Major Scottish cities continue to introduce Low Emission Zones which are designed to target the most polluting vehicles; our fleet has been modernised to ensure it is compliant with the new regulations. The business has visibility of changes to the legal environment and the prevailing political sentiment and plans accordingly
Human resources
People are the company’s greatest asset, and as the business expands, the reliance on high-calibre employees becomes increasingly crucial. To support this growth, significant investment has been made and will continue to be directed towards enhancing both capacity and capability throughout the organisation. Furthermore, the apprenticeship program and the Driver Academy play a pivotal role in this strategy. These initiatives not only bolster the workforce but also ensure a steady influx of skilled, dedicated drivers, meeting the ongoing demand for quality and efficiency in operations.
End markets
The company operates in the construction sector which has experienced challenges in previous years. The risk faced by the company is significantly diversified as there is increasing sales activity in other markets eg hospitality, local government, facilities management, manufacturing, industrial, commercial, retail and leisure.
Commodities market
Volatility in global commodity prices can impact the revenues generated from the resource produced. Working with industry partners helps to mitigate any downside risk.
Business infrastructure
The business is reliant on various software and IT systems. Further improvements to our operational systems continued to be implemented throughout the business offering greater stability, analysis and reporting capability.
Acquisitions
A key plank of the growth strategy is through acquisitions. There are many potential deals sourced and only those that are aligned to the strategy of, and have a strong culture fit with, NWH are progressed. This disciplined approach limits the risk of poor integration.
N G Black
Director
9 April 2024
NWH GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 30 September 2023.
Results and dividends
The results for the year are set out on page 9.
During the year under review interim dividends were paid amounting to £540k (2022: £546k). The directors recommend that no final dividend be paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M P Williams
(Deceased 31 October 2023)
R A Williams
C D Williams
N G Black
R F D Ray
C D Robertson
G A Hill
G Money
(Appointed 24 January 2024)
N I Williams
(Appointed 24 January 2024)
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
NWH GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 5 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial instruments and risk.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
N G Black
Director
9 April 2024
NWH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NWH GROUP LIMITED
- 6 -
Opinion
We have audited the financial statements of NWH Group Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 September 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
NWH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NWH GROUP LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
NWH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NWH GROUP LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
David MacCallum
Senior Statutory Auditor
For and on behalf of Azets Audit Services
9 April 2024
Chartered Accountants
Statutory Auditor
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
NWH GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
52,221,830
49,248,264
Cost of sales
(42,550,117)
(40,754,878)
Gross profit
9,671,713
8,493,386
Administrative expenses
(7,192,160)
(6,697,595)
Other operating income
35,815
24,548
Operating profit
4
2,515,368
1,820,339
Interest payable and similar expenses
7
(737,266)
(411,306)
Profit before taxation
1,778,102
1,409,033
Tax on profit
8
(428,643)
297,431
Profit for the financial year
1,349,459
1,706,464
NWH GROUP LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
733,124
850,699
Other intangible assets
10
8,864
25,512
Total intangible assets
741,988
876,211
Tangible assets
11
26,738,408
26,503,864
27,480,396
27,380,075
Current assets
Stocks
12
367,957
380,118
Debtors
13
9,300,456
8,326,357
Cash at bank and in hand
1,306,234
520,989
10,974,647
9,227,464
Creditors: amounts falling due within one year
14
(27,451,199)
(27,269,856)
Net current liabilities
(16,476,552)
(18,042,392)
Total assets less current liabilities
11,003,844
9,337,683
Creditors: amounts falling due after more than one year
15
(5,933,161)
(5,505,098)
Provisions for liabilities
Deferred tax liability
18
1,527,057
1,098,418
(1,527,057)
(1,098,418)
Net assets
3,543,626
2,734,167
Capital and reserves
Called up share capital
20
100,001
100,001
Profit and loss reserves
21
3,443,625
2,634,166
Total equity
3,543,626
2,734,167
The financial statements were approved by the board of directors and authorised for issue on 9 April 2024 and are signed on its behalf by:
N G Black
Director
Company Registration No. SC335165
NWH GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
100,001
1,473,702
1,573,703
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
1,706,464
1,706,464
Dividends
9
-
(546,000)
(546,000)
Balance at 30 September 2022
100,001
2,634,166
2,734,167
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
1,349,459
1,349,459
Dividends
9
-
(540,000)
(540,000)
Balance at 30 September 2023
100,001
3,443,625
3,543,626
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 12 -
1
Accounting policies
Company information
NWH Group Limited is a private company limited by shares incorporated in Scotland. The registered office is Unit 5 Mayfield Industrial Estate, Mayfield, Dalkeith, Midlothian, United Kingdom, EH22 4AD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
- Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of NWH Holdings Limited. These consolidated financial statements are available from its registered office, Unit 5, Mayfield Industrial Estate, Mayfield, Dalkeith, Midlothian, EH22 4AD.
1.2
Business combinations
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.3
Going concern
At 30 September 20true23, the company had net current liabilities of £16,476,552 (2022: £18,042,392).
This is largely due to balances owed to its parent entity, who have confirmed that it will continue to support the entity and not demand repayment of their loans until such time that the company has the ability and means to repay them.
The current and future financial position of the company, including its cash flows and liquidity, has been reviewed by the directors. The directors have prepared detailed financial projections for a period extending over 12 months from the date of approval of these financial statements. These projections have also been sensitised to reflect plausible downside scenarios. Based on these projections, the directors have a reasonable expectation that the company has adequate resources with sufficient levers available to continue in operational existence for the foreseeable future and to meet its obligations as they fall due.
As such, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue relates to the collection and processing of materials, sale of recycled materials and skip hire.
Revenue from collection services is recognised when the materials have been collected and the loads weighed upon return to the processing facility. Revenue from processing services is recognised at the point in time when the processing service takes place. Revenue from the sale of recycled materials is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from skip hire is recognised on despatch of the skip to the customer.
1.5
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2005 has been fully amortised.
Goodwill, being the amount paid in connection with the acquisition of a business in 2017 and 2021 is being amortised over 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
33% on cost
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% on cost
Leasehold land and buildings
20% on cost
Plant and equipment
20% on cost
Computer equipment
33% on cost
Motor vehicles
10% - 20% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.8
Borrowing costs related to fixed assets
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
1.9
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.10
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.11
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.12
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.13
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.15
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.17
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The key sources of estimation uncertainty in applying accounting policies in the financial statements are:
- Useful economic lives of intangible and tangible assets
- Residual values of tangible assets
The annual amortisation or depreciation charge for intangible and tangible assets is sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values are assessed annually and amended when necessary to reflect current estimates, based on technological advancements, future investments, economic utilisation and physical condition of the assets.
The directors review the debtors ledger for customers who have overdue balances. Provision are made against balances which present a credit risk to the company. The directors also monitor customers' insured limits to mitigate the risk of bad or doubtful debts.
Stock to tip provisions are measured at the directors best estimate of the company's obligations in respect of unusable or unsellable materials held on site.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Collection, processing and disposal
32,699,645
26,080,662
Complimentary services
10,934,102
15,218,552
Collection and compaction
8,588,083
7,949,050
52,221,830
49,248,264
The directors consider there to be one geographical market of turnover, the United Kingdom.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
38,000
36,000
Depreciation of owned tangible fixed assets
2,276,166
1,596,720
Depreciation of tangible fixed assets held under finance leases
1,617,248
1,918,035
(Profit)/loss on disposal of tangible fixed assets
(626,366)
21,326
Amortisation of intangible assets
151,889
207,129
Operating lease charges
1,875,127
1,772,496
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Drivers
103
133
Recycling
166
142
Directors
8
6
Administration
81
60
Total
358
341
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
13,154,496
12,124,309
Social security costs
1,358,666
1,313,084
Pension costs
261,346
239,592
14,774,508
13,676,985
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
356,848
142,437
Company pension contributions to defined contribution schemes
10,806
3,879
367,654
146,316
The analysis of auditor's remuneration is as follows:
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
176,309
-
Company pension contributions to defined contribution schemes
7,891
-
7
Interest payable and similar expenses
2023
2022
£
£
Interest on invoice finance arrangements
313,554
82,641
Interest on finance leases and hire purchase contracts
387,860
328,665
Other interest
35,852
737,266
411,306
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
4
(148,804)
Adjustments in respect of prior periods
(1,122)
Total current tax
4
(149,926)
Deferred tax
Origination and reversal of timing differences
428,639
(147,505)
Total tax charge/(credit)
428,643
(297,431)
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
8
Taxation
(Continued)
- 21 -
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,778,102
1,409,033
Expected tax charge based on the standard rate of corporation tax in the UK of 22.01% (2022: 19.00%)
391,329
267,716
Tax effect of expenses that are not deductible in determining taxable profit
6,484
10,122
Adjustments in respect of prior years
(1,122)
Research and development tax credit
(148,804)
Fixed asset timing differences
(74,215)
(287,125)
Chargeable gains / (losses)
53,750
Remeasurement of deferred tax to current tax rate
51,295
23,839
Enhanced deduction for R&D expenditure
(110,209)
Surrender of tax losses for R&D tax credit
194,985
Adjust in respect of business reorganisations
(246,833)
Taxation charge/(credit) for the year
428,643
(297,431)
9
Dividends
2023
2022
£
£
Final paid
540,000
546,000
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 22 -
10
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 October 2022
1,927,409
210,799
2,138,208
Transfers
17,666
17,666
At 30 September 2023
1,927,409
228,465
2,155,874
Amortisation and impairment
At 1 October 2022
1,076,710
185,287
1,261,997
Amortisation charged for the year
117,575
34,314
151,889
At 30 September 2023
1,194,285
219,601
1,413,886
Carrying amount
At 30 September 2023
733,124
8,864
741,988
At 30 September 2022
850,699
25,512
876,211
11
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 October 2022
2,283,239
992,468
21,587,482
548,037
13,149,007
38,560,233
Additions
34,339
30,031
2,282,829
48,714
2,784,444
5,180,357
Disposals
(231,605)
(2,743,170)
(34,805)
(1,016,111)
(4,025,691)
Transfers
(17,666)
(17,666)
At 30 September 2023
2,085,973
1,004,833
21,127,141
561,946
14,917,340
39,697,233
Depreciation and impairment
At 1 October 2022
459,653
49,089
7,486,177
204,015
3,857,435
12,056,369
Depreciation charged in the year
83,902
49,203
2,074,723
151,349
1,534,237
3,893,414
Eliminated in respect of disposals
(21,619)
(2,273,372)
(34,805)
(661,162)
(2,990,958)
At 30 September 2023
521,936
98,292
7,287,528
320,559
4,730,510
12,958,825
Carrying amount
At 30 September 2023
1,564,037
906,541
13,839,613
241,387
10,186,830
26,738,408
At 30 September 2022
1,823,586
943,379
14,101,305
344,022
9,291,572
26,503,864
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11
Tangible fixed assets
(Continued)
- 23 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
6,584,626
7,432,224
Motor vehicles
7,006,711
6,422,802
13,591,337
13,855,026
12
Stocks
2023
2022
£
£
Raw materials and consumables
367,957
380,118
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,863,873
7,287,319
Corporation tax recoverable
148,804
Other debtors
49,965
Prepayments and accrued income
1,436,583
840,269
9,300,456
8,326,357
Included within trade debtors is £8,082,153 (2022: £7,482,005) which is subject to an invoice discounting arrangement.
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
3,581,617
3,332,344
Invoice finance borrowings
17
5,090,315
4,327,852
Trade creditors
4,073,505
2,971,641
Amounts owed to group undertakings
11,315,896
11,023,965
Taxation and social security
1,071,127
1,737,414
Other creditors
278,422
523,235
Accruals and deferred income
2,040,317
3,353,405
27,451,199
27,269,856
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 24 -
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
5,933,161
5,505,098
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
3,581,617
3,332,344
In two to five years
5,933,161
5,505,098
9,514,778
8,837,442
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance lease liabilities are secured over the assets they were used to acquire.
17
Loans and overdrafts
2023
2022
£
£
Invoice finance borrowings
5,090,315
4,327,852
Payable within one year
5,090,315
4,327,852
The Royal Bank of Scotland holds a bond and floating charge over the whole assets of the company together with cross guarantees between NWH Group Limited and other group companies. The total amount of debt over which cross guarantees had been provided amounted to £10,195,454 (2022: £10,704,545).
RBS Invoice Finance Ltd (RBSIF) hold a floating charge in relation to the purchased debts. RBSIF's floating charge shall insofar as it relates to the purchased debts, but no further or otherwise, rank in priority to the bank's floating charge.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 25 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
3,843,441
3,052,779
Tax losses
(2,316,384)
(1,953,181)
Other timing differences
-
(1,180)
1,527,057
1,098,418
2023
Movements in the year:
£
Liability at 1 October 2022
1,098,418
Charge to profit or loss
428,639
Liability at 30 September 2023
1,527,057
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
261,346
239,592
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,001
100,001
100,001
100,001
Each share holds the right to one vote. Dividends are allotted in proportion to shareholdings. If the company was to be dissolved on a winding up basis distributions would be shared in proportion to shareholdings. Issued shares hold no right of redemption.
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 26 -
21
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
2,634,166
1,473,702
Profit for the year
1,349,459
1,706,464
Dividends declared and paid in the year
(540,000)
(546,000)
At the end of the year
3,443,625
2,634,166
22
Operating lease commitments
Lessee
2023
2022
£
£
Within one year
860,785
766,229
Between two and five years
2,188,840
1,878,565
In over five years
3,811,570
4,136,674
6,861,195
6,781,468
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
1,617,486
804,546
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Purchases
2023
2022
£
£
Other related parties
-
300,000
NWH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
24
Related party transactions
(Continued)
- 27 -
Management charges receivable
2023
2022
£
£
Other related parties
12,000
12,000
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Other related parties
-
300,000
Other information
The company has taken exemption provided by Paragraph 33.1A of Financial Reporting Standard 102 and accordingly has not disclosed any transactions with group undertakings.
25
Ultimate controlling party
The company is a 100% subsidiary of NWH Holdings Limited, a company registered in Scotland.
The largest and smallest group into which the results of the company are consolidated is that headed by NWH Holdings Limited. The consolidated accounts of this company are available to the public and may be obtained from Companies House.
No other group accounts include the results of the company.
The directors are of the opinion that there is no controlling party.
As at the balance sheet date, the company was under the control of the directors, M P Williams, C D Williams and R A Williams, by virtue of their majority shareholding in NWH Holdings Limited.
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