Company registration number SC120350 (Scotland)
G S-HYDRO UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
G S-HYDRO UK LIMITED
COMPANY INFORMATION
Directors
C Hargreaves
F Guarido Villa
Company number
SC120350
Registered office
Unit A Broadfold Road
Bridge of Don
Aberdeen
United Kingdom
AB23 8EE
Auditor
MHA - Baker Tilly International
6th Floor
2 London Wall Place
London
EC2Y 5AU
Business address
Unit A, Camberwell Way
Doxford International Business Park
Sunderland
United Kingdom
SR3 3XN
G S-HYDRO UK LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 23
G S-HYDRO UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The principal activity of the company during the year was the manufacture, installation and servicing and sale of hydraulic pipework, along with the supply of hydraulic hoses and couplings for the oil and gas industry.
The profit for the year is £957,233 (2022 - £921,541). No dividends have been paid in the year.
The company will continue to look to selectively expand its offering, with concentrated efforts towards the offshore industry and selected land based customers. Services offering will be further developed by the company.
Principal risks and uncertainties
The price of oil will always be the main uncertainty facing the business. The risks associated include the potential for a significant decline in turnover, the increased possibility of customer default and a varying foreign exchange rate.
The company has ongoing benefits from the support of experienced, well-motivated and highly skilled staff who have been vital in securing and retaining the customer contracts that minimise the risk of short term declines in turnover.
The risk of customer default is managed by tight credit control checks and procedures to minimise the risk of slow or non-payment
Key performance indicators
The company uses a range of financial indicators to monitor the company's performance over time. The key performance indicators are set out below:
Total revenue - shows the growth of the business.
Operating profit and margin - a key profitability metric as we expect revenue to grow by more than costs through effective cost management.
Net assets - an indicator of the strength of the current balance sheet.
2023
2022
£000
£000
Total revenue
15,972
13,877
Operating profit
1,277
1,149
Operating profit %
7.99%
8.3%
Net assets
5,233
4,275
Going Concern
The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the reasons set out in note 1.
C Hargreaves
Director
10 September 2024
G S-HYDRO UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. 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:
C Hargreaves
F Guarido Villa
Mr. S Corrias
(Resigned 11 March 2024)
The following director held office during the year:
S Corrias (Resigned 11 March 2024)
Qualifying third-party and pension scheme Indemnity Provisions
During the financial year and at the time of this report being approved no third-party indemnity provisions and/or qualifying pension scheme indemnity provision is in place for the benefit of the directors or an associated company.
Political donations
The company did not make any political donations during the year (2022: none).
Financial risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
The company monitors interest rates closely in order to minimise the potential exposure it has to any interest rate movements.
The company’s principal foreign currency exposures arise from trading with overseas companies.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The company is exposed to commodity price risk as a result of its operations However, some of the price risk is mitigated as the company benefits from economies of scale, being part of an international gourp. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.
Research and development
The company continues to invest in research and development. This has resulted in improvements to the company's product portfolio which will benefit the company in the medium to long term.
Post balance sheet events
There were no post balance sheet events that need disclosing.
Future developments
The directors do not foresee any changes in the company's activities in the immediate future.
G S-HYDRO UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Disclosure of information in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's 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 the company's results and activities.
Statement of disclosure to auditor
Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and MHA (MacIntyre Hudson LLP) will therefore continue in office.
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.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
On behalf of the board
C Hargreaves
Director
10 September 2024
G S-HYDRO UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice
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 (FRS 102). 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom, governing the preparation and dissemination of financial statements, may differ from legislation in other jurisdictions.
On Behalf of the board
C Hargreaves
Director
27/06/2024
G S-HYDRO UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF G S-HYDRO UK LIMITED
- 5 -
Opinion
We have audited the financial statements of G S-Hydro UK Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet 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 31 December 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.
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.
G S-HYDRO UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF G S-HYDRO UK LIMITED
- 6 -
Matters on which we are required to report by exception
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.
G S-HYDRO UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF G S-HYDRO UK LIMITED
- 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
Enquiry of management and those charged with governance around actual and potential litigation and claims;
Enquiry of entity staff in tax functions and external advisors to identify any instances of non-compliance with laws and regulations;
Performing audit work over the risk of management 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 bias;
Reviewing minutes of meetings of those charged with governance;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Discussing amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud;
Discussing with management over any potential or suspected fraud;
Performing audit work over the recognition of revenue on deliveries of goods/income/services occurring at the year end to provide assurance over cut-off;
Performing substantive tests of detail over the existence of income within the financial system;
Performing substantive analytical review procedures reconciling expected income from corroborating evidence to that which had been recorded in the financial statements to ensure that income was complete;
Performing an assessment of the methodologies used in order to calculate the significant estimates/provisions at the year end for evidence of bias;
Considering alternative estimation approaches including using (where available) actual post year end outcomes in order to provide assurance over the potential for material misstatement;
Checking accounting policies to the financial reporting standards where necessary and confirmed to be appropriate.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.
G S-HYDRO UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF G S-HYDRO UK LIMITED
- 8 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Francesco Lepri ACA
(Senior Statutory Auditor)
for and on behalf of MHA, Statutory Auditor
London, United Kingdom
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
24 September 2024
G S-HYDRO UK LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
15,971,624
13,877,059
Change in stocks of finished goods and in work in progress
1,898,286
585,295
Other operating income
135,094
Raw materials and consumables
(10,281,225)
(7,723,441)
Other external expenses
(405,184)
(306,116)
Staff costs
6
(4,298,433)
(3,877,623)
Depreciation
4
(269,741)
(287,157)
Other operating expenses
(1,338,756)
(1,254,088)
Operating profit
4
1,276,571
1,149,023
Interest receivable and similar income
8
994
324
Interest payable and similar expenses
9
(32,471)
(10,550)
Profit before taxation
1,245,094
1,138,797
Tax on profit
10
(287,861)
(217,256)
Profit for the financial year
957,233
921,541
Retained earnings brought forward
(244,566)
(1,166,107)
Retained earnings carried forward
712,667
(244,566)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
G S-HYDRO UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,042,268
1,001,858
Investments
12
35,557
35,557
1,077,825
1,037,415
Current assets
Stocks
14
5,729,633
3,831,347
Debtors
15
2,886,050
3,395,993
Cash at bank and in hand
1,418,956
616,393
10,034,639
7,843,733
Creditors: amounts falling due within one year
16
(5,682,850)
(4,455,732)
Net current assets
4,351,789
3,388,001
Total assets less current liabilities
5,429,614
4,425,416
Provisions for liabilities
Deferred tax liability
17
196,947
149,982
(196,947)
(149,982)
Net assets
5,232,667
4,275,434
Capital and reserves
Called up share capital
19
4,520,000
4,520,000
Profit and loss reserves
712,667
(244,566)
Total equity
5,232,667
4,275,434
The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
C Hargreaves
Director
Company Registration No. SC120350
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
G S-Hydro UK Limited (SC120350) is a private company limited by shares incorporated in Scotland. The registered office is Unit A Broadfold Road, Bridge of Don, Aberdeen, United Kingdom, AB23 8EE. The principal place of business is Unit A, Camberwell Way, Doxford International Business Park, Sunderland, United Kingdom, SR3 3XN.
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 Interpump Group S.p.A, a company incorporated in Italy. These consolidated financial statements are available from its registered office, Via Enrico Fermi, 25, 42049 Sant'llano d'Enza RE Italy.
1.2
Going concern
As of 31 December 2023, the company had net current assets of 4,351,789 net assets of £ 5,232,667true and reported a profit for the year then ended of £953,233. The financial statements have been prepared on a going concern basis as the directors have a reasonable expectation that the company will have sufficient funds to meet its liabilities as they fall due for a period of at least 12 months from the date of signing of these 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. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised based on the results of an annual impairment review
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.
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:
Tenants improvements
Over the remaining lease term
Plant and equipment
15-25% 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.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.7
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.
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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost is computed on a first in first out basis. 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.
1.9
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.
1.10
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.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
1.12
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.
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.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
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.
1.16
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.
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 provision
Management have made informed judgements based on historic experience to enable them to make an accurate provision for slow-moving stock. The provision is sensitive to the life cycles of products and the time it takes for these to become obsolete. Management will re-assess their obsolescence period quarterly to ensure this fairly represents the recoverability of older stock.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual value of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current significant estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
6,396,624
4,955,059
Sale of services
9,575,000
8,922,000
15,971,624
13,877,059
2023
2022
£
£
Turnover analysed by geographical market
UK
15,895,150
13,192,197
Overseas
76,474
684,862
15,971,624
13,877,059
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
10,162
30,787
Depreciation of owned tangible fixed assets
273,410
285,835
(Profit)/loss on disposal of tangible fixed assets
(3,669)
1,322
Operating lease charges
436,069
362,049
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
30,679
40,000
For other services
Taxation compliance services
22,000
All other non-audit services
25,500
-
47,500
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production staff
52
42
Administrative staff
35
43
Management staff
1
1
Total
88
86
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,772,728
3,368,594
Social security costs
413,974
403,748
Pension costs
111,731
105,281
4,298,433
3,877,623
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
155,335
156,637
Company pension contributions to defined contribution schemes
9,928
9,929
165,263
166,566
Certain directors were remunerated by other group entities for their services to the group as a whole. The amount of remuneration which relates to qualifying services for the company is estimated to be a nominal amount (less than £1,000) in 2023 and 2022
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
994
324
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
32,471
10,550
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
240,896
177,859
Adjustments in respect of prior periods
(53,779)
Total current tax
240,896
124,080
Deferred tax
Origination and reversal of timing differences
46,965
15,516
Changes in tax rates
4,900
Adjustment in respect of prior periods
72,760
Total deferred tax
46,965
93,176
Total tax charge
287,861
217,256
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:
2023
2022
£
£
Profit before taxation
1,245,094
1,138,797
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
292,846
216,371
Tax effect of expenses that are not deductible in determining taxable profit
1,253
1,232
Adjustments in respect of prior years
(24,409)
(53,779)
Research and development tax credit
(25,668)
Deferred tax adjustments in respect of prior years
18,718
72,760
Remeasurement of deferred tax for changes in tax rates
1,672
4,900
(Under)/Over provision
(418)
(3,710)
Fixed asset differences
(1,801)
5,150
Taxation charge for the year
287,861
217,256
The entity is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted in the United Kingdom the jurisdiction in which the entity is incorporated and will come into effect from 1 January 2024. Based on the analysis performed by Interpump Group SpA (for all the Interpump Group), the Company is not exposed to Top-up Tax under the GloBE Rules
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Tenants improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
502,893
4,007,065
389,422
4,899,380
Additions
8,832
252,310
90,110
351,252
Disposals
(23,364)
(51,271)
(74,635)
At 31 December 2023
511,725
4,236,011
428,261
5,175,997
Depreciation and impairment
At 1 January 2023
455,271
3,230,480
211,771
3,897,522
Depreciation charged in the year
9,986
202,615
60,809
273,410
Eliminated in respect of disposals
(23,793)
(13,410)
(37,203)
At 31 December 2023
465,257
3,409,302
259,170
4,133,729
Carrying amount
At 31 December 2023
46,468
826,709
169,091
1,042,268
At 31 December 2022
47,622
776,585
177,651
1,001,858
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
35,557
35,557
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
GS Hydro Limited
1
Ordinary
100.00
First Hose Limited
2
Ordinary
100.00
Subsidiaries are dormant with registered office addresses (all UK unless otherwise indicated):
1
Unit A Camberwell Way, Doxford Park, Sunderland, SR3 3XN
2
Unit 21 Denmore Industrial Estate, Bridge Of Don, Aberdeen, AB23 8JW
The company is not required to prepare consolidated accounts as both subsidiaries are dormant company and so excluded from consolidation as per Section 402 of the Companies Act 2006.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Stocks
2023
2022
£
£
Raw materials and consumables
5,729,633
3,831,347
Stocks value includes an obsolete provision of £311,310 (2022- £311,310).
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,870,310
3,185,431
Corporation tax recoverable
133,699
Amounts owed by group undertakings
5,032
20,172
Other debtors
10,708
56,691
2,886,050
3,395,993
Amounts owed by group undertakings are unsecured, repayable on demand and interest free.
16
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
2,669,157
1,468,569
Amounts owed to group undertakings
1,235,167
1,567,566
Corporation tax
201,306
Other taxation and social security
609,078
482,846
Accruals and deferred income
968,142
936,751
5,682,850
4,455,732
Amounts owed to group undertakings are unsecured and repayable on demand. £679,992 (2022: £854,000) is subject to interest charge of 6M Euribor plus 1.00% and 3M Euribor plus 1.00%. The remaining balance 555,175 (2022: £713,566) is interest free.
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
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
197,803
160,661
Short term timing differences
(856)
(10,679)
196,947
149,982
2023
Movements in the year:
£
Liability at 1 January 2023
149,982
Charge to profit or loss
46,965
Liability at 31 December 2023
196,947
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
111,731
105,281
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.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,520,000
4,520,000
4,520,000
4,520,000
G S-HYDRO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
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:
2023
2022
£
£
Within one year
335,141
403,695
Between two and five years
730,588
980,694
1,065,729
1,384,389
21
Ultimate controlling party
The company is a wholly owned subsidiary of Interpump Group S.p.A, a company incorporated in Italy.
The company has been included in the group financial statements of Interpump Group SpA being the smallest and largest group of which a company is a member and for which group financial statements are available from Interpump Group SpA at A Mingozzi, 6, Calderara di Reno (Bologna), Italy.
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