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REGISTERED NUMBER: NI039984 (Northern Ireland)















NORTHERN HYDRAULICS LTD

Strategic Report, Directors' Report and

Financial Statements for the Year Ended 31 December 2023






NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)






Contents of the Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2023




Page

Company Information 1

Strategic Report 2

Directors' Report 3

Independent Auditors' Report 5

Income Statement 9

Statement of Financial Position 10

Statement of Changes in Equity 11

Statement of Cash Flows 12

Notes to the Statement of Cash Flows 13

Notes to the Financial Statements 14


NORTHERN HYDRAULICS LTD

Company Information
FOR THE YEAR ENDED 31 DECEMBER 2023







DIRECTORS: S Morris
B Morris



REGISTERED OFFICE: 63 Gortonis Road
Coalisland
Co. Tyrone
BT71 4QG



REGISTERED NUMBER: NI039984 (Northern Ireland)



INDEPENDENT AUDITORS: CavanaghKelly
Chartered Accountants and Statutory Auditors
36-38 Northland Row
Dungannon
Co. Tyrone
BT71 6AP



BANKERS: Bank of Ireland
24 Scotch Street
Dungannon
Tyrone
BT70 1AR

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Strategic Report
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their strategic report for the year ended 31 December 2023.

REVIEW OF BUSINESS
Northern Hydraulics Ltd continues to deliver a strong trading performance in respect of the year ended 31 December 2023 and the business remains in a sound financial position at the year end. The company returned a profit for the financial year of £1,453,491 (2022: £1,492,750)

The directors consider the key performance indicators are those that communicate the financial performance and strengths as a whole, being revenue, gross profit margin and operating profit.

The directors have provided an analysis of the key performance indicators of the business below. The directors continue to monitor revenue and costs to ensure the company remains profitable. The company continues to maintain a strong net asset position.

PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the company's strategy are subject to a number of risks. The key business risks and uncertainties affecting the company relate to competition. The directors carry out regular strategic reviews including assessments of competitor activity and market trends. The risks are also, addressed through not being overly reliant on any one customer, strong customer service as well as investment in its people and facilities.

STRATEGY & DEVELOPMENT
The company's success is dependent on understanding and meeting the developing needs of customers and developing innovative solutions for their needs. The company will continue to improve upon its position and concentrate on achieving maximum growth in its market sector while at the same time continuing to improve efficiency in all areas of its operations. With its proven track record the company believes it will be well placed to retain existing customers and generate new business.

BUSINESS ENVIRONMENT
The engineering sector is a highly competitive sector. It is our expectation that this will continue to be the case.

FINANCIAL KEY PERFORMANCE INDICATORS
The directors consider the key performance indicators of the company to be those that reflect the performance of the company as a whole:

2023 2022
Revenue: £15,443,029 £15,499,141
Gross profit margin: 20.22% 21.31%

FUTURE DEVELOPMENTS
The company is committed to long term creation of shareholder value by increasing the company's market share. The company aims to increase revenue and operating profits. The company will continue to meet the needs of the customers and develop innovative solutions for their needs while remaining highly competitive.

EMPLOYEES
The company's policy is to consult and discuss with employees matters likely to affect employees' interests.

Information on matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on part of all employees of the financial and economic factors affecting the company performance.

ON BEHALF OF THE BOARD:





S Morris - Director


24 September 2024

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Directors' Report
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report with the financial statements of the Company for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of the manufacture of precision cylinders for the materials handling, construction and agricultural industries.

DIVIDENDS
The company paid interim dividends in the year of £37,000 (2022: £50,000).

The directors do not recommend the payment of a final dividend (2022: £Nil).

RESEARCH AND DEVELOPMENT
The company continues to recognise the importance of its research and development programme, which it believes is essential to ensure that the business continues to develop new products and remain competitive in the market.

DIRECTORS
S Morris has held office during the whole of the period from 1 January 2023 to the date of this report.

Other changes in directors holding office are as follows:

B Morris - appointed 31 December 2023

POLITICAL DONATIONS AND EXPENDITURE
During the year, the company made charitable donations totalling £5,427 (2022: £3,428). No political donations were made during the year (2022: £Nil).

DISCLOSURES REQUIRED UNDER SCHEDULE 7
In accordance with Section 414C (11) of Companies Act 2006, the directors have elected to disclose details of the review of the company's business, financial risk management objectives and policies, future developments and employment policy in the company's Strategic Report which would otherwise be required to be disclosed in the Directors' Report.

FINANCIAL RISK MANAGEMENT
The company's operations expose it to a variety of financial risks which include the effects of credit risk, foreign exchange risk and price risk. Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department.

Credit risk
The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit, which is reassessed regularly by the board.

Foreign exchange risk
While the greater part of the company's revenues and expenses are denominated in sterling, the company is exposed to some foreign exchange risk in the normal course of business, principally on payments received in Euro and US Dollar. While the company has not used financial instruments to date to hedge foreign exchange exposure, this position is kept constantly under review.

Price risk
The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.


NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Directors' Report
FOR THE YEAR ENDED 31 DECEMBER 2023

DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Strategic Report, the Directors' 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS
The auditors, CavanaghKelly, have indicated their willingness to continue in office in accordance with the provision of Section 485 of the Companies Act 2006.

ON BEHALF OF THE BOARD:





S Morris - Director


24 September 2024

Independent Auditors' Report to the Members of
Northern Hydraulics Ltd

Opinion
We have audited the financial statements of Northern Hydraulics Ltd (the 'Company') for the year ended 31 December 2023 which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the Company's affairs as at 31 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.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
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.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the 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.

Independent Auditors' Report to the Members of
Northern Hydraulics Ltd


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 where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Independent Auditors' Report to the Members of
Northern Hydraulics Ltd


Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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:

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The objectives of our audit in respect of fraud are to assess the risk of material misstatement due to fraud, design and implement appropriate responses to those assessed risks and to respond appropriately to instances of fraud or suspected fraud identified during the course of our audit. However, the primary responsibility for the prevention and detection of fraud rests with management and those charged with governance of the company.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
- We obtained understanding of the legal and regulatory requirements applicable to the company's financial statements and considered the most significant are the Companies Act 2006, Financial Reporting Standards (FRS102) and UK taxation legislation;
- We have assessed the risk of material misstatement of the financial statements, including risk of material misstatement due to fraud and how it might occur by holding discussions with management and those charged with governance;
- We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations;
- Understanding the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; and
- Discussions amongst the audit engagement team regarding how fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion we identified the following potential areas where fraud may occur: timing of revenue recognition and management override.

The audit response to risks identified included:

- Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the relevant laws and regulations above;
- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risk of material misstatement due to fraud;
- In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are reasonable and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

Independent Auditors' Report to the Members of
Northern Hydraulics Ltd


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 Auditors' 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.




Mr. Desmond Kelly FCA (Senior Statutory Auditor)
for and on behalf of CavanaghKelly
Chartered Accountants and Statutory Auditors
36-38 Northland Row
Dungannon
Co. Tyrone
BT71 6AP

24 September 2024

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Income Statement
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £ £

REVENUE 5 15,443,029 15,499,141

Cost of sales (12,320,021 ) (12,196,674 )
GROSS PROFIT 3,123,008 3,302,467

Administrative expenses (1,637,266 ) (1,481,230 )
1,485,742 1,821,237

Other operating income 64,769 73,147
OPERATING PROFIT 7 1,550,511 1,894,384


Finance costs 8 (47,697 ) (55,534 )
PROFIT BEFORE TAXATION 1,502,814 1,838,850

Tax on profit 9 (49,323 ) (346,100 )
PROFIT FOR THE FINANCIAL YEAR 1,453,491 1,492,750

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

1,453,491

1,492,750

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Statement of Financial Position
31 DECEMBER 2023

2023 2022
Notes £ £
NON-CURRENT ASSETS
Property, plant and equipment 11 3,483,589 3,407,599

CURRENT ASSETS
Inventories 12 2,751,234 1,886,755
Receivables: amounts falling due within
one year

13

6,742,504

3,913,614
Cash at bank 1,301,401 1,399,748
10,795,139 7,200,117
PAYABLES
Amounts falling due within one year 14 (4,986,413 ) (2,663,917 )
NET CURRENT ASSETS 5,808,726 4,536,200
TOTAL ASSETS LESS CURRENT
LIABILITIES

9,292,315

7,943,799

PAYABLES
Amounts falling due after more than
one year

15

(539,970

)

(682,896

)

PROVISIONS FOR LIABILITIES 19 (613,459 ) (514,955 )

GOVERNMENT GRANTS 20 (193,472 ) (217,025 )
NET ASSETS 7,945,414 6,528,923

CAPITAL AND RESERVES
Called up share capital 21 50,000 50,000
Retained earnings 7,895,414 6,478,923
SHAREHOLDERS' FUNDS 7,945,414 6,528,923

The financial statements were approved by the Board of Directors and authorised for issue on 24 September 2024 and were signed on its behalf by:





S Morris - Director


NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2023

Called up
share Retained Total
capital earnings equity
£ £ £
Balance at 1 January 2022 50,000 5,036,173 5,086,173

Changes in equity
Dividends - (50,000 ) (50,000 )
Total comprehensive income - 1,492,750 1,492,750
Balance at 31 December 2022 50,000 6,478,923 6,528,923

Changes in equity
Dividends - (37,000 ) (37,000 )
Total comprehensive income - 1,453,491 1,453,491
Balance at 31 December 2023 50,000 7,895,414 7,945,414

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £ £
Cash flows from operating activities
Cash generated from operations 1 726,554 1,491,768
Interest paid (24,331 ) (28,479 )
Interest element of hire purchase
payments paid

(23,366

)

(27,055

)
Tax paid (224,682 ) (219,357 )
Net cash from operating activities 454,175 1,216,877

Cash flows from investing activities
Purchase of tangible fixed assets (352,317 ) (341,905 )
Sale of tangible fixed assets 22,700 49,440
Net cash from investing activities (329,617 ) (292,465 )

Cash flows from financing activities
Loan repayments in year (69,007 ) (63,906 )
Capital repayments in year (129,678 ) (206,769 )
Amount withdrawn by directors - (301,338 )
Equity dividends paid (37,000 ) (50,000 )
Net cash from financing activities (235,685 ) (622,013 )

(Decrease)/increase in cash and cash equivalents (111,127 ) 302,399
Cash and cash equivalents at
beginning of year

2

1,399,748

1,097,349

Cash and cash equivalents at end
of year

2

1,288,621

1,399,748

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
2023 2022
£ £
Profit before taxation 1,502,814 1,838,850
Depreciation charges 237,216 220,539
Loss on disposal of fixed assets 16,411 31,283
Warranty Provision Movement 60,898 -
Capital Grant (23,553 ) 78,855
Finance costs 47,697 55,534
1,841,483 2,225,061
(Increase)/decrease in inventories (864,479 ) 566,524
Increase in trade and other debtors (2,828,890 ) (463,279 )
Increase/(decrease) in trade and other creditors 2,578,440 (836,538 )
Cash generated from operations 726,554 1,491,768

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2023
31/12/23 1/1/23
£ £
Cash and cash equivalents 1,301,401 1,399,748
Bank overdrafts (12,780 ) -
1,288,621 1,399,748
Year ended 31 December 2022
31/12/22 1/1/22
£ £
Cash and cash equivalents 1,399,748 1,097,349


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/23 Cash flow At 31/12/23
£ £ £
Net cash
Cash at bank 1,399,748 (98,347 ) 1,301,401
Bank overdrafts - (12,780 ) (12,780 )
1,399,748 (111,127 ) 1,288,621
Debt
Finance leases (292,516 ) 129,678 (162,838 )
Debts falling due within 1 year (81,821 ) (6,600 ) (88,421 )
Debts falling due after 1 year (528,011 ) 75,607 (452,404 )
(902,348 ) 198,685 (703,663 )
Total 497,400 87,558 584,958

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2023

1. STATUTORY INFORMATION

Northern Hydraulics Ltd is a private company, limited by shares , registered in Northern Ireland. The company's registered number and registered office address can be found on the Company Information page.

2. STATEMENT OF COMPLIANCE

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

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The accounts are prepared on a going concern basis under the historical cost convention. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements.

Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods:
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

- the significant risks and rewards of ownership have been transferred to the buyer;
- the company retains no continuing involvement or control over the goods;
- the amount of revenue can be measured reliably;
- it is probable that future economic benefits will flow through the company
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The charge to depreciation is calculated to write off the original cost of property, plant and equipment, less their estimated residual value, over their expected useful lives as follows:

Freehold property2% Straight Line
Plant and machinery 10% Reducing Balance
Fixtures, fittings and equipment10% Reducing Balance
Motor vehicles25% Straight Line
Computer equipment33% Straight Line

The cost of land is not depreciated.

The carrying values of property, plant and equipment are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.

Inventories
Inventories and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated under the first- in, first-out method and includes all purchase, transport, and handling costs in bringing inventories to their present location and condition.

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued

Financial instruments
The company have chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and amounts owed by related parties and are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 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.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and overdrafts and amounts owed to related parties 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

(iii) Offsetting

Financial assets and liabilities are offset and 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.


NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued
Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development
Expenditure on research and development is written off in the year in which it is incurred.


Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the Statement of Financial Position date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rates of exchange ruling at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The resulting exchange differences are dealt with in the Income Statement.

Hire purchase and leasing commitments
Rentals paid under operating leases are changed to the Income Statement on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the Income Statement.

Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within current liabilities.

Distributions to equity holders
Dividends and other distributions to the company's shareholder are recognised as a liability in the financial statements in the period in which the dividends and other distributions are approved by the company's shareholder. These amounts are recognised in the statement of changes in equity.

Finance costs
Finance costs are charged to Income statement over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Borrowing costs
All borrowing costs are recognised in the Income statement in the period in which they are incurred.

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. ACCOUNTING POLICIES - continued

Debtors
Debtors are stated after all known bad debts have been written off. Specific provision has been made against all debts considered doubtful of collection.

Creditors
Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Ordinary share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Dividends and distribution to equity holders
Dividends and other distributions to the company's shareholders are recognised as a liability in the financial period in which the dividends and other distributions are approved by the company's shareholders.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Judgements In applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Critical judgements in applying the entity's accounting policies

There are no critical judgements in applying the entity's accounting policies.

(b) Key accounting estimates and assumptions

Warranty Provision
The company offers a warranty for any faulty goods sold. Provision is made for potential claims under warranty for goods which have a default. Management review the level of sales and the number of warranty claims made on a regular basis in order to calculate the provision for future claims for goods sold.

5. REVENUE

All turnover is derived from the company's principal activities. No analysis of turnover is presented as the directors consider disclosure to be seriously prejudicial to the interests of the company.

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

6. EMPLOYEES AND DIRECTORS

Staff costs, including directors' remuneration, were as follows:
20232022
£   £   
Wages and salaries2,728,0122,511,529
Social security costs265,499250,153
Other pension costs58,97052,705
3,052,4812,814,387

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


2023

202
2
Directors21
Production and Processing6463
Administration1414
8078


The director is considered to be the key management of the company. Retirement benefits are accruing to the director in the year.

2023 2022
£ £
Directors' remuneration 56,671 50,100

7. OPERATING PROFIT

The operating profit is stated after charging/(crediting):
20232022
£   £   
Depreciation - owned assets237,216220,539
Loss on disposal of fixed assets16,41131,283
Auditors' remuneration10,6959,865
Foreign exchange differences(3,913)(26,595)
Government grants(39,087)(22,557)

8. FINANCE COSTS
2023 2022
£ £
Bank interest 313 124
Bank loan interest 24,018 28,355
Hire purchase interest 17,073 21,691
Invoice discounting charges 6,293 5,364
47,697 55,534

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

9. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£ £
Current tax:
UK corporation tax 139,049 272,411
Prior Year Adjustment (127,332 ) -
Total current tax 11,717 272,411

Deferred tax 37,606 73,689
Tax on profit 49,323 346,100

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£ £
Profit before tax 1,502,814 1,838,850
Profit multiplied by the standard rate of corporation tax in the UK
of 23.520% (2022 - 19%)

353,462

349,382

Effects of:
Expenses not deductible for tax purposes 2,525 1,235
Adjustments to tax charge in respect of previous periods (127,337 ) (2,461 )
Non-relevant depreciation 8,238 6,648
Impact of super deduction (647 ) (26,980 )
Impact of rate change 2,225 18,276
Research and development relief (189,143 ) -
Total tax charge 49,323 346,100

10. DIVIDENDS
2023 2022
£ £
Ordinary shares of £1 each
Interim 37,000 50,000

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

11. PROPERTY, PLANT AND EQUIPMENT
Freehold Fixtures
property & Plant and and
land machinery fittings
£ £ £
COST
At 1 January 2023 1,749,638 3,378,251 203,463
Additions - 257,731 -
Disposals (1,405 ) (58,248 ) (9,101 )
At 31 December 2023 1,748,233 3,577,734 194,362
DEPRECIATION
At 1 January 2023 209,653 1,600,169 125,934
Charge for year 34,965 188,005 7,440
Eliminated on disposal (168 ) (33,748 ) (5,975 )
At 31 December 2023 244,450 1,754,426 127,399
NET BOOK VALUE
At 31 December 2023 1,503,783 1,823,308 66,963
At 31 December 2022 1,539,985 1,778,082 77,529

Motor Computer
vehicles equipment Totals
£ £ £
COST
At 1 January 2023 132,262 73,465 5,537,079
Additions 61,500 33,086 352,317
Disposals (117,612 ) (4,275 ) (190,641 )
At 31 December 2023 76,150 102,276 5,698,755
DEPRECIATION
At 1 January 2023 124,408 69,316 2,129,480
Charge for year 2,563 4,243 237,216
Eliminated on disposal (109,758 ) (1,881 ) (151,530 )
At 31 December 2023 17,213 71,678 2,215,166
NET BOOK VALUE
At 31 December 2023 58,937 30,598 3,483,589
At 31 December 2022 7,854 4,149 3,407,599

Property, plant and equipment with a net book value of £3,483,589 (2022: £3,407,599) are pledged as security for the company's bank loans.

Included above are assets held under finance leases or hire purchase contracts as follows:


20232023 20222022
CarryingDepreciationCarryingDepreciation
AmountChargeAmountCharge
£ £ £ £

Plant & Machinery576,35864,040649,80857,740
Motor vehicles--7,855942
576,35864,040657,66358,732

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

12. INVENTORIES
2023 2022
£ £
Raw materials 1,631,341 1,300,182
Work-in-progress 203,808 184,875
Finished goods 916,085 401,698
2,751,234 1,886,755

There is no material difference between the replacement cost of inventories and their balance sheet values.

13. RECEIVABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£ £
Trade receivables 3,324,379 3,549,933
Amounts owed by related parties 3,235,862 -
Other receivables 118,301 28,000
Directors' current accounts - 297,239
Prepayments and accrued income 63,962 38,442
6,742,504 3,913,614

14. PAYABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£ £
Bank loans and overdrafts (see note 16)
101,201

81,821
Hire purchase contracts (see note 17) 75,272 137,631
Trade payables 1,582,787 1,662,167
Corporation Tax 59,446 272,411
Social security and other taxes 410,455 395,505
Other payables 6,496 11,632
Directors' current accounts 2,629,946 -
Accruals and deferred income 120,810 102,750
4,986,413 2,663,917

15. PAYABLES: AMOUNTS FALLING DUE AFTER ONE YEAR
2023 2022
£ £
Bank loans (see note 16) 452,404 528,011
Hire purchase contracts (see note 17) 87,566 154,885
539,970 682,896

16. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£ £
Amounts falling due within one year or on demand:
Bank overdrafts 12,780 -
Bank loans 88,421 81,821
101,201 81,821

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

16. LOANS - continued
2023 2022
£ £
Amounts falling due between one and two years:
Bank loans - 1-2 years 91,579 91,579

Amounts falling due between two and five years:
Bank loans - 2-5 years 274,736 274,736

Amounts falling due in more than five years:

Repayable by instalments
Bank loans more 5 yr by instal 86,089 161,696

The bank loan is secured by way of a mortgage debenture incorporating a fixed and floating charge over all company assets present and future including a specific charge over premises at 63 Gortgonis Road, Coalisland and all fixtures thereon.

The bank loans include £86,089 (2022: £161,696) which fall due after five years and which are payable by instalments of £6,744 per month with interest charged at 2.65% above the bank base rate per annum.

17. LEASING AGREEMENTS

Minimum lease payments under hire purchase fall due as follows:

2023 2022
£ £
Net obligations repayable:
Within one year 75,272 137,631
Between one and five years 87,566 154,885
162,838 292,516

Hire purchases are secured by the assets to which they relate.

18. FINANCIAL INSTRUMENTS

2023 2022
£ £
Carrying amount of financial assets
Debt instruments measured at amortised cost 4,090,742 3,847,172
Carrying amount of financial liabilities
Measured at amortised cost 2,557,893 2,678,897

Financial assets measured at amortised cost comprise of trade debtors and amounts owed by directors.

Financial liabilities measured at amortised cost comprise of bank overdraft and invoice discounting, bank loans, trade creditors, other creditors, accruals and obligations under finance lease and hire purchase agreements.

NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984)

Notes to the Financial Statements - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

19. PROVISIONS FOR LIABILITIES



Deferred tax

Warranty
provision


Total
£   £   £   
Balance at 1 January 2022394,271120,684514,955
Charge to Income Statement during year37,60660,89898,504
Balance at 31 December 2023431,877181,582613,459

The provision for deferred taxation is made up as follows:

20232022
£   £   
Accelerated capital allowances424,663390,605
Other timing differences7,2143,666
431,877394,271

The company offers a warranty for any faulty goods sold. Provision is made for potential claims under warranty for goods which have a default. Management review the level of sales and the number of warranty claims made on a regular basis in order to calculate the provision for future claims for goods sold.

20. GOVERNMENT GRANTS
2023 2022
£ £
Deferred government grants 193,472 217,025

21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £ £
50,000 Ordinary £1 50,000 50,000

22. RELATED PARTY TRANSACTIONS

The company has identified the following transactions, which fall to be disclosed under the terms of
paragraph 33. 1A from the provisions of FRS "Related Party Disclosures".

Mr S. Morris and Mr B. Morris as directors of the company are regarded as a related party as identified by FRS 102 Paragraph 33 "Related Party Disclosures".

Included within debtors falling due within one year ( note 13) is a balance of £3,000,000 owed to the company by a company controlled by Mr Barry Morris.

Barry Morris is also a director of Ramko Limited. In the year to the 31 December 2023 Northern Hydraulics Limited traded with Ramko Limited under normal commercial terms. Sales and purchases were £921,658 and £534,332 respectively. The balance owed to/outstanding from Northern Hydraulics Limited by Ramko Limited at the 31 December 2023 was £359,309 and £123,447 respectively.

Included within creditors due within one year is a balance of £2,629,946 owed to Mr Seamus Morris, director of the company.

23. ULTIMATE CONTROLLING PARTY

The controlling party is S. Morris by virtue of his shareholding in the company.