Company registration number 00972440 (England and Wales)
HY-RAM ENGINEERING COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
HY-RAM ENGINEERING COMPANY LIMITED
COMPANY INFORMATION
Directors
T J Hallam
D R Hallam
P J Hallam
G A Hallam
K Sharratt
J W Thornton
L R Bullock-Jones
(Appointed 1 April 2024)
K Limer
(Appointed 1 April 2024)
Secretary
T J Hallam
Company number
00972440
Registered office
Pelham Street
Mansfield
Nottingham
NG18 2EY
Auditor
UHY Hacker Young
14 Park Row
Nottingham
NG1 6GR
HY-RAM ENGINEERING COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10 - 11
Statement of changes in equity
12
Notes to the financial statements
13 - 26
HY-RAM ENGINEERING COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Review of the business

The business experienced an encouraging set of results for fiscal year during 2023/24. As reported in the company’s statement of comprehensive income, company revenue has increased from £10,595,182 to £11,371,483. Profit before tax has increased from £1,318,363 to £1,866,695. The statement of financial position shows that the company’s net assets at the year end have increased from £5,719,066 to £6,527,544.

 

This growth is welcome, compared with almost static growth for 2021/22 and 2022/23 caused mainly by the Russian/Ukraine conflict (February 2022), and rising costs of materials and energy prices.

 

We saw the market starting to recover in the latter stages of 2022/23 and this recovery was sustained and carried forward into the 2023/24 financial year.

 

Coupled with the increase in revenue, we closely managed and monitored expenditure. Our forecasts for direct and indirect costs are based on prior-year ratios.

 

In terms of direct costs, our 2023/24 results show variance against forecast of c5.5%; Indirect costs were also lower than forecast.

 

The combined effect of increased revenue and lower than anticipated expenditure has led to an increase in gross profit of c20% compared to the previous year and c33% increase in net profit.

 

Looking forward, we anticipate the market continuing to recover and become stronger. We have plans for both product development and market expansion across both the UK and overseas.

 

We have set our budgets and targets for the forthcoming fiscal year, and we are looking forward to future growth.

Principal risks and uncertainties

Competitive risks

The business risks and uncertainties faced by the Company are considered to be the UK market competition, the state of the world economy and its impact on supply and demand.

 

Financial instrument risks

The objectives are to limit exposure, ensure sufficient working capital exists and to monitor the management of risk at all business units.

 

Use of derivatives

The company has no derivative contracts in place. However, any variability of foreign exchange rates will be managed with the use of forward currency contracts.

HY-RAM ENGINEERING COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Key performance indicators

Management use a range of performance measures to monitor and manage the business. The performance measures are split into financial key performance indicators as set out below.

 

Profit ratios:

    Gross profit margin:        39.09% (2023 : 34.72%)

    Operating margin:        16.57% (2023 : 13.05%)

    Net profit margin:        12.47% (2023 : 10.03%)

 

Liquidity ratios:

    Current ratio:            2.74 (2023 : 2.30)

    Quick ratio:            1.71 (2023 : 1.48)

 

Capital ratios:

    Return on capital employed:    0.29 (2023: 0.24)

    Net asset turnover:        1.74 (2023 : 1.85)

On behalf of the board

T J Hallam
Director
19 August 2024
HY-RAM ENGINEERING COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company continued to be that of the design, manufacture and hiring out of specialist pipeline equipment and support services for both domestic and international gas and water industries.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £605,518. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

T J Hallam
D R Hallam
P J Hallam
G A Hallam
K Sharratt
J W Thornton
L R Bullock-Jones
(Appointed 1 April 2024)
K Limer
(Appointed 1 April 2024)
Auditor

The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

HY-RAM ENGINEERING COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
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:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
T J Hallam
Director
19 August 2024
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HY-RAM ENGINEERING COMPANY LIMITED
- 5 -
Opinion

We have audited the financial statements of Hy-Ram Engineering Company Limited (the 'company') for the year ended 31 March 2024 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:

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 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.

INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HY-RAM ENGINEERING COMPANY LIMITED (CONTINUED)
- 6 -

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 our audit:

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:

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.

INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HY-RAM ENGINEERING COMPANY LIMITED (CONTINUED)
- 7 -
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.

Based on our understanding of the Company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation, anti-bribery, corruption and fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated 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 inflated revenue and profit. Audit procedures performed included:

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Other matters which we are required to address

The prior period financial statements were audited by the predecessor auditor, Nuvo Audit Limited. The audit opinion was unmodified and the audit report was dated 25 July 2023.

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 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.

INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HY-RAM ENGINEERING COMPANY LIMITED (CONTINUED)
- 8 -
James Simmonds
Senior Statutory Auditor
For and on behalf of UHY Hacker Young
21 August 2024
HY-RAM ENGINEERING COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
11,371,483
10,595,182
Cost of sales
(6,926,217)
(6,916,392)
Gross profit
4,445,266
3,678,790
Administrative expenses
(2,561,130)
(2,295,727)
Operating profit
4
1,884,136
1,383,063
Interest receivable and similar income
7
15,320
3,301
Interest payable and similar expenses
8
(32,761)
(68,001)
Profit before taxation
1,866,695
1,318,363
Tax on profit
9
(448,699)
(255,687)
Profit for the financial year
1,417,996
1,062,676

The profit and loss account has been prepared on the basis that all operations are continuing operations.

HY-RAM ENGINEERING COMPANY LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,724,973
2,743,031
Current assets
Stocks
11
2,464,376
2,298,619
Debtors
12
2,376,056
2,670,673
Cash at bank and in hand
1,707,270
1,481,025
6,547,702
6,450,317
Creditors: amounts falling due within one year
13
(2,393,813)
(2,798,232)
Net current assets
4,153,889
3,652,085
Total assets less current liabilities
6,878,862
6,395,116
Creditors: amounts falling due after more than one year
14
(123,207)
(507,200)
Provisions for liabilities
Deferred tax liability
17
228,111
168,850
(228,111)
(168,850)
Net assets
6,527,544
5,719,066
Capital and reserves
Called up share capital
19
5,605
5,605
Revaluation reserve
174,608
205,173
Profit and loss reserves
6,347,331
5,508,288
Total equity
6,527,544
5,719,066

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

HY-RAM ENGINEERING COMPANY LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 MARCH 2024
31 March 2024
- 11 -
The financial statements were approved by the board of directors and authorised for issue on 21 August 2024 and are signed on its behalf by:
T J Hallam
Director
Company registration number 00972440 (England and Wales)
HY-RAM ENGINEERING COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
5,605
233,539
5,032,814
5,271,958
Year ended 31 March 2023:
Profit
-
-
1,062,676
1,062,676
Other comprehensive income:
Revaluation of tangible fixed assets
-
(2,000)
-
(2,000)
Total comprehensive income
-
(2,000)
1,062,676
1,060,676
Dividends
20
-
-
(613,568)
(613,568)
Transfers
-
(26,366)
26,366
-
Balance at 31 March 2023
5,605
205,173
5,508,288
5,719,066
Year ended 31 March 2024:
Profit
-
-
1,417,996
1,417,996
Other comprehensive income:
Revaluation of tangible fixed assets
-
(4,000)
-
(4,000)
Total comprehensive income
-
(4,000)
1,417,996
1,413,996
Dividends
20
-
-
(605,518)
(605,518)
Transfers
-
(26,565)
26,565
-
Balance at 31 March 2024
5,605
174,608
6,347,331
6,527,544
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information

Hy-Ram Engineering Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pelham Street, Mansfield, Nottingham, NG18 2EY.

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:

 

 

The financial statements of the company are consolidated in the financial statements of Hy-Ram Pipeline Products Ltd. These consolidated financial statements are available from its registered office, Pelham Street, Mansfield, Nottinghamshire, NG18 2EY.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
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. Turnover is reduced for estimated customer returns, rebates and other similar allowances.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. This is usually at the point that the customer has signed for delivery of the goods.

Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by compared the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
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% straight line
Leasehold improvements
25% straight line
Plant and equipment
10% straight line
Fixtures and fittings
25% straight line
Hire plant
12.5% straight line
Motor vehicles
25% straight line

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.

A number of items of plant and machinery are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss. Revaluation gains in respect of assets subsequently disposed are realised upon disposal.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.7
Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks.

 

Costs are determined using the first-in, first-out method. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

 

Work in progress is reflected in the accounts on a contract by contract basis by recording turnover and related costs as contract activity progresses.

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.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
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.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provisions

Stocks are valued at the lower of cost and net realisable value, which includes estimates for slow moving and obsolete stocks. Calculations of these provisions involves elements of judgement and includes forecast demand based on historical data, which may differ from actual events in the future. Based on managements experience of the demand and industry, these two elements are not expected to vary significantly, unless other known variables are established.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Hire of equipment
2,268,087
1,739,554
Repairs
390,809
313,941
Sale of goods
8,698,690
8,536,242
Miscellaneous
13,897
5,445
11,371,483
10,595,182
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
9,645,004
8,616,279
Europe
703,802
872,053
Rest of the World
1,022,677
1,106,850
11,371,483
10,595,182
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Turnover and other revenue
(Continued)
- 19 -
2024
2023
£
£
Other revenue
Interest income
15,320
3,301
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Research and development costs
50,252
18,188
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
6,000
Depreciation of owned tangible fixed assets
474,054
436,944
Profit on disposal of tangible fixed assets
(80,379)
(88,969)
Operating lease charges
197,879
115,152
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Administration and support
48
49

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,689,232
1,565,733
Social security costs
172,265
160,460
Pension costs
119,164
77,649
1,980,661
1,803,842
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
309,326
286,125
Company pension contributions to defined contribution schemes
86,165
46,375
395,491
332,500

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
115,981
112,795
Company pension contributions to defined contribution schemes
3,106
2,929
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
15,320
3,301
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
12,397
24,853
Interest on finance leases and hire purchase contracts
21,121
21,290
Exchange differences on financing transactions
(757)
21,858
32,761
68,001
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
389,537
207,945
Adjustments in respect of prior periods
(99)
-
0
Total current tax
389,438
207,945
Deferred tax
Origination and reversal of timing differences
59,261
47,742
Total tax charge
448,699
255,687

As of 1 April 2023, the main rate of Corporation Tax increased from 19.00% to 25.00%. The differences are explained below:

The actual charge 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:

2024
2023
£
£
Profit before taxation
1,866,695
1,318,363
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
466,674
250,489
Tax effect of expenses that are not deductible in determining taxable profit
6,404
8,327
Change in unrecognised deferred tax assets
9,862
47,742
Adjustments in respect of prior years
(99)
-
0
Research and development tax credit
(36,804)
(37,420)
Fixed asset differences
2,662
(13,451)
Taxation charge for the year
448,699
255,687
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
10
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Hire plant
Motor vehicles
Total
£
£
£
£
£
£
£
Cost or valuation
At 1 April 2023
1,232,345
204,001
949,066
297,301
1,952,118
467,607
5,102,438
Additions
-
0
30,996
11,813
8,433
307,087
141,417
499,746
Disposals
-
0
(4,950)
-
0
-
0
(68,174)
(47,177)
(120,301)
At 31 March 2024
1,232,345
230,047
960,879
305,734
2,191,031
561,847
5,481,883
Depreciation and impairment
At 1 April 2023
29,281
164,551
715,133
141,840
1,071,962
236,640
2,359,407
Depreciation charged in the year
14,647
19,769
84,432
61,052
195,346
98,808
474,054
Eliminated in respect of disposals
-
0
(4,950)
-
0
-
0
(43,537)
(28,064)
(76,551)
At 31 March 2024
43,928
179,370
799,565
202,892
1,223,771
307,384
2,756,910
Carrying amount
At 31 March 2024
1,188,417
50,677
161,314
102,842
967,260
254,463
2,724,973
At 31 March 2023
1,203,064
39,450
233,933
155,461
880,156
230,967
2,743,031

Plant and machinery assets were revalued in January 2021 by the directors. The depreciation method for plant and machinery was also reviewed at this date, which was subsequently amended to straight line over 10 years, from straight line over 5 years, effective from the date of revaluation.

 

The historic cost of these assets is £599,974 (2023 - £607,049). Under the historical cost method, the net book value of these assets would be £24,521 (2023 - £46,031). The difference in deprecation due to the revaluation is transferred each year to the revaluation reserve, see the Statement of Changes in Equity.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
11
Stocks
2024
2023
£
£
Work in progress
92,682
53,061
Stock
2,371,694
2,245,558
2,464,376
2,298,619
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,128,085
2,466,513
Other debtors
3,146
2,962
Prepayments and accrued income
244,825
201,198
2,376,056
2,670,673
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
15
1,749
93,471
Obligations under finance leases
16
96,868
241,748
Trade creditors
1,160,256
1,575,610
Amounts owed to group undertakings
283,022
283,022
Corporation tax
389,537
207,945
Other taxation and social security
257,858
253,922
Other creditors
30,755
31,487
Accruals and deferred income
173,768
111,027
2,393,813
2,798,232
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
-
0
356,609
Obligations under finance leases
16
123,207
150,591
123,207
507,200
15
Loans and overdrafts
2024
2023
£
£
Bank loans
1,749
450,080
Payable within one year
1,749
93,471
Payable after one year
-
0
356,609
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
96,868
241,748
In two to five years
123,207
150,591
220,075
392,339

Finance lease payments represent rentals payable by the company for certain items of tangible asset. The amounts owed are secured upon the asset to which they relate.

HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
228,977
168,850
Short term timing differences
(866)
-
228,111
168,850
2024
Movements in the year:
£
Liability at 1 April 2023
168,850
Charge to profit or loss
59,261
Liability at 31 March 2024
228,111
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
119,164
78,016

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. At the balance sheet date contributions of £8,246 (2023 - £8,163) were payable and are included in creditors.

19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
5,605
5,605
5,605
5,605
HY-RAM ENGINEERING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
20
Dividends
2024
2023
£
£
Interim paid
605,518
613,568
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
179,495
241,748
Between two and five years
143,974
150,591
323,469
392,339
22
Related party transactions

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions and balances with wholly owned subsidiaries within the group.

23
Ultimate controlling party

Hy-Ram Pipeline Products Ltd is the ultimate and immediate parent company, by virtue of owning majority of the allotted share capital of the company.

 

The company is ultimately controlled by the directors.

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