R J Bateman (Engineering) Limited - Limited company accounts 18.2

REGISTERED NUMBER: 01497923 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2018

FOR

R J BATEMAN (ENGINEERING) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTORS:

R J Bateman (non exec chairman)

J J Bateman

SECRETARY:

S M Bateman

REGISTERED OFFICE:

124 High Street

Midsomer Norton

Radstock

BA3 2DA

REGISTERED NUMBER:

01497923 (England and Wales)

AUDITORS:

PG Owen Limited

Chartered Accountants and

Statutory Auditors

124 High Street

Midsomer Norton

Bath

BA3 2DA

BANKERS:

National Westminster Bank plc

P O Box 333

Silbury House

300 Silbury Boulevard

Milton Keynes

MK9 2ZF

The directors present their strategic report for the year ended 31 August 2018.

REVIEW OF BUSINESS

The principal activity of the company during the year was that of the manufacture and supply of self propelled

agricultural crop sprayers. In addition, the company continues to support and maintain customers with machines already

in the marketplace.

During the year the company has again continued to improve its existing models together with making and developing

future models. The time spent on ensuring the upgraded machines were reliable and built to the standards expected by its

customers has ensured the company's reputation has been maintained and even enhanced in it's sector. This hard work

and time expended over the last few years is now beginning to reap benefits for the company. This has resulted in an

increase in turnover with margins remaining relatively constant from last year.

The company continues to have a reasonable order book with orders well into 2019 and the directors do not foresee any

downturn in either the demand for the company's products or within the market in which the company operates.The

directors are satisfied with the period's trading and financial position as at 31 August 2018 and look forward to increased

sales and profits in 2019 and beyond.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors are constantly reviewing the risks and uncertainties both internally and externally in relation to the market

place. They consider the existing systems in place to be robust enough to identify and deal with events as they arise in a

timely and compliant manner.

As with a number of companies, the effects of BREXIT may have some as yet unknown risk to the company. Some of

the parts required for manufacture can only be sourced from within the European Community which may result in

changing production costs. Against this the company does export a small number of machines to both countries within

and outside the European Community and again whilst the sale price may need reconsideration the director considers the

risks are manageable.

The company continues to invest efforts in streamlining its production process as much as is possible for the bespoke

manner in which machines are produced. With the assistance of technology, the company is well on the way to a fully

integrated stock control system which will seek to efficiently manage stock levels whilst ensuring a constant supply of

parts to its customers. The recent bespoke product upgrade has also provided the director with an opportunity to analyse

and reorganise parts of the production process to ensure a more efficient but still consistent standard of manufacture.

The company seeks to undertake constant development of existing machines and with a great emphasis on the ecological

affects of exhaust emissions, the future focus on development of machines is undertaken with this in mind, be it a hybrid

or even battery only method of propulsion. The company has already incurred some expenditure to investigate how this

is being achieved already and may evolve in the future. By continually seeing to improve its range of products and

maintaining its award winning standards the director ensures that any risks and uncertainties are minimised.

ON BEHALF OF THE BOARD:

Director

17 December 2018

The directors present their report with the financial statements of the company for the year ended 31 August 2018.

DIVIDENDS

The total distribution of dividends for the year ended 31 August 2018 will be £ 750,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 September 2017 to the date of this

report.

R J Bateman (non exec chairman)

J J Bateman

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and of the profit or loss of the company for that period. In preparing these financial statements, the directors

are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken

as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, PG Owen Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J J Bateman - Director

17 December 2018

Opinion

We have audited the financial statements of R J Bateman (Engineering) Limited (the 'company') for the year ended

31 August 2018 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in

Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted

Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 August 2018 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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 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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors 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.

R N Browning BA(Hons) FCCA FCA FAIA (Senior Statutory Auditor)

for and on behalf of PG Owen Limited

Chartered Accountants and

Statutory Auditors

124 High Street

Midsomer Norton

Bath

BA3 2DA

17 December 2018

TURNOVER

15,582,261

11,285,216

Cost of sales

12,181,178

8,768,723

GROSS PROFIT

3,401,083

2,516,493

Administrative expenses

1,274,076

1,187,436

OPERATING PROFIT

4

2,127,007

1,329,057

Interest receivable and similar income

3,924

1,376

PROFIT BEFORE TAXATION

2,130,931

1,330,433

Tax on profit

5

346,021

330,136

PROFIT FOR THE FINANCIAL YEAR

1,784,910

1,000,297

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,784,910

1,000,297

FIXED ASSETS

Tangible assets

7

733,745

686,792

CURRENT ASSETS

Stocks

8

2,797,309

3,074,585

Debtors

9

2,493,968

1,839,208

Cash at bank and in hand

2,820,964

2,006,543

8,112,241

6,920,336

CREDITORS

Amounts falling due within one year

10

2,477,462

2,218,600

NET CURRENT ASSETS

5,634,779

4,701,736

TOTAL ASSETS LESS CURRENT LIABILITIES

6,368,524

5,388,528

PROVISIONS FOR LIABILITIES

12

41,771

96,685

NET ASSETS

6,326,753

5,291,843

CAPITAL AND RESERVES

Called up share capital

13

10,000

10,000

Retained earnings

14

6,316,753

5,281,843

SHAREHOLDERS' FUNDS

6,326,753

5,291,843

The financial statements were approved by the Board of Directors on 17 December 2018 and were signed on its behalf by:

J J Bateman - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2016

10,000

4,681,546

4,691,546

Changes in equity

Dividends

-

(400,000

)

(400,000

)

Total comprehensive income

-

1,000,297

1,000,297

Balance at 31 August 2017

10,000

5,281,843

5,291,843

Changes in equity

Dividends

-

(750,000

)

(750,000

)

Total comprehensive income

-

1,784,910

1,784,910

Balance at 31 August 2018

10,000

6,316,753

6,326,753

Cash flows from operating activities

Cash generated from operations

1

1,952,873

1,083,105

Tax paid

(88,503

)

(296,889

)

Net cash from operating activities

1,864,370

786,216

Cash flows from investing activities

Purchase of tangible fixed assets

(252,480

)

(225,129

)

Sale of tangible fixed assets

101,256

20,000

Interest received

3,924

1,376

Net cash from investing activities

(147,300

)

(203,753

)

Cash flows from financing activities

Amount withdrawn by directors

(152,649

)

(203,301

)

Equity dividends paid

(750,000

)

(400,000

)

Net cash from financing activities

(902,649

)

(603,301

)

Increase/(decrease) in cash and cash equivalents

814,421

(20,838

)

Cash and cash equivalents at beginning of year

2

2,006,543

2,027,381

Cash and cash equivalents at end of year

2

2,820,964

2,006,543

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit before taxation

2,130,931

1,330,433

Depreciation charges

83,492

125,275

Loss/(profit) on disposal of fixed assets

20,779

(13,099

)

Finance income

(3,924

)

(1,376

)

2,231,278

1,441,233

Decrease/(increase) in stocks

277,276

(112,071

)

(Increase)/decrease in trade and other debtors

(654,760

)

694

Increase/(decrease) in trade and other creditors

99,079

(246,751

)

Cash generated from operations

1,952,873

1,083,105

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 31 August 2018

31.8.18

1.9.17

£

£

Cash and cash equivalents

2,820,964

2,006,543

Year ended 31 August 2017

31.8.17

1.9.16

£

£

Cash and cash equivalents

2,006,543

2,027,381

1.	STATUTORY INFORMATION

R J Bateman (Engineering) Limited is a private company, limited by shares , registered in England and Wales.

The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents invoiced sales of specialist agricultural machinery, net of applicable value added tax.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

2% on cost

Plant and machinery

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Employer-financed retirement benefit scheme (efrbs)

The company has established trusts for the benefit of employees and persons connected with them. Monies held

in these trusts are held by independent trustees and managed at their discretion. The trustees are empowered to

provide both retirement and other employee benefits.

Where the company retains future economic benefit from, and has de facto control of the assets and liabilities of

the trust, they are accounted for as assets and liabilities of the company until the earlier of the date that an

allocation of trust funds to employees in respect of past services is declared and the date that assets of the trust

vest in identified individuals.

Where monies held in a trust are determined by the company on the basis of employees' past services to the

business and the company can obtain no future economic benefit from those monies, such monies, whether in the

trust or accrued for by the company are charged to the profit and loss account in the period to which they relate.

Where monies held in a trust are determined by the company on the basis of employees' past services to the

business and are payable after completion of the employment, such monies are charged to the profit and loss

account in the period during which services are rendered by employees.

3.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

2,298,523

2,184,263

Social security costs

242,139

228,330

Other pension costs

22,277

13,898

2,562,939

2,426,491

The average number of employees during the year was as follows:

2018

2017

67

66

2018

2017

£

£

Directors' remuneration

86,785

86,566

Directors' pension contributions to money purchase schemes

564

380

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2018

2017

£

£

Depreciation - owned assets

83,492

125,275

Loss/(profit) on disposal of fixed assets

20,779

(13,099

)

Audit & accountancy

24,030

22,965

5.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2018

2017

£

£

Current tax:

UK corporation tax

400,935

233,451

Deferred tax

(54,914

)

96,685

Tax on profit

346,021

330,136

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2018

2017

£

£

Profit before tax

2,130,931

1,330,433

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 20%)

404,877

266,087

Effects of:

Capital allowances in excess of depreciation

(3,942

)

(27,638

)

Deferred Tax movement

(54,914

)

96,685

Change in Corporation tax charge rate

-

(4,998

)

Total tax charge

346,021

330,136

6.

DIVIDENDS

2018

2017

£

£

Interim

750,000

400,000

7.	TANGIBLE FIXED ASSETS

Improvements

to

Plant and

Motor

Computer

property

machinery

vehicles

equipment

Totals

£

£

£

£

£

COST

At 1 September 2017

470,463

761,409

1,250,914

154,011

2,636,797

Additions

-

125,000

127,480

-

252,480

Disposals

-

-

(155,380

)

-

(155,380

)

At 31 August 2018

470,463

886,409

1,223,014

154,011

2,733,897

DEPRECIATION

At 1 September 2017

151,288

695,299

984,152

119,266

1,950,005

Charge for year

9,410

24,341

41,055

8,686

83,492

Eliminated on disposal

-

-

(33,345

)

-

(33,345

)

At 31 August 2018

160,698

719,640

991,862

127,952

2,000,152

NET BOOK VALUE

At 31 August 2018

309,765

166,769

231,152

26,059

733,745

At 31 August 2017

319,175

66,110

266,762

34,745

686,792

8.

STOCKS

2018

2017

£

£

Goods for resale

799,302

810,565

Work-in-progress

1,099,081

930,151

Raw materials

898,926

1,333,869

2,797,309

3,074,585

9.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2018

2017

£

£

Trade debtors

2,427,226

1,774,574

Prepayments and accrued income

66,742

64,634

2,493,968

1,839,208

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2018

2017

£

£

Trade creditors

978,516

840,566

Tax

368,880

56,448

Social security and other taxes

122,830

156,805

Other creditors

8,689

13,585

Directors' current accounts

979,547

1,132,196

Accruals

19,000

19,000

2,477,462

2,218,600

11.	SECURED DEBTS

The bank holds a fixed and floating charge over all assets of the company.

12.	PROVISIONS FOR LIABILITIES

2018

2017

£

£

Deferred tax

41,771

96,685

Deferred

tax

£

Balance at 1 September 2017

96,685

Credit to Statement of Comprehensive Income during year

(54,914

)

Balance at 31 August 2018

41,771

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2018

2017

value:

£

£

10,000

Ordinary

£1

10,000

10,000

14.

RESERVES

Retained

earnings

£

At 1 September 2017

5,281,843

Profit for the year

1,784,910

Dividends

(750,000

)

At 31 August 2018

6,316,753

15.	CONTINGENT LIABILITIES

The company has appointed assets to an Employer Financed Retirement Benefit Scheme. The company is liable

for PAYE/NIC that may arise on awards made by the Trustees. The Directors are of the opinion that the Trustees

will award most of the benefits in a way that will not result in a PAYE/NIC liability.

16.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The company charged the Director interest at the official rate on the overdrawn loan account on a monthly basis.

17.	RELATED PARTY DISCLOSURES

The company was under the control of Mr and Mrs Bateman, being majority shareholders, throughout both this

year and last year. Mr R J Bateman has now waived his rights to future rent.

Any overdrawn directors' loan accounts are charged at the official rate of interest on a monthly basis.