REGISTERED NUMBER: |
NORTHERN HYDRAULICS LTD |
Strategic Report, Directors' Report and |
Financial Statements for the Year Ended 31 December 2023 |
REGISTERED NUMBER: |
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: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
INDEPENDENT AUDITORS: |
Chartered Accountants and Statutory Auditors |
36-38 Northland Row |
Dungannon |
Co. Tyrone |
BT71 6AP |
BANKERS: |
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: |
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 |
Other changes in directors holding office are as follows: |
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: |
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. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
36-38 Northland Row |
Dungannon |
Co. Tyrone |
BT71 6AP |
NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984) |
Income Statement |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
REVENUE | 5 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
1,485,742 | 1,821,237 |
Other operating income |
OPERATING PROFIT | 7 |
Finance costs | 8 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 9 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
NORTHERN HYDRAULICS LTD (REGISTERED NUMBER: NI039984) |
Statement of Financial Position |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
NON-CURRENT ASSETS |
Property, plant and equipment | 11 |
CURRENT ASSETS |
Inventories | 12 |
Receivables: amounts falling due within one year |
13 |
Cash at bank |
PAYABLES |
Amounts falling due within one year | 14 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PAYABLES |
Amounts falling due after more than one year |
15 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 19 | ( |
) | ( |
) |
GOVERNMENT GRANTS | 20 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Retained earnings |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
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 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2023 |
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 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase payments paid |
( |
) |
( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Loan repayments in year | ( |
) | ( |
) |
Capital repayments in year | ( |
) | ( |
) |
Amount withdrawn by directors | - | (301,338 | ) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
1,097,349 |
Cash and cash equivalents at end of year |
2 |
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 |
Depreciation charges |
Loss on disposal of fixed assets |
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 | ( |
) |
Increase in trade and other debtors | ( |
) | ( |
) |
Increase/(decrease) in trade and other creditors | ( |
) |
Cash generated from operations |
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 | ( |
) |
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 | ( |
) | 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 |
2. | STATEMENT OF COMPLIANCE |
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 property | 2% Straight Line |
Plant and machinery | 10% Reducing Balance |
Fixtures, fittings and equipment | 10% Reducing Balance |
Motor vehicles | 25% Straight Line |
Computer equipment | 33% 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: |
2023 | 2022 |
£ | £ |
Wages and salaries | 2,728,012 | 2,511,529 |
Social security costs | 265,499 | 250,153 |
Other pension costs | 58,970 | 52,705 |
3,052,481 | 2,814,387 |
The average number of employees during the year was as follows: |
2023 | 202 2 |
Directors | 2 | 1 |
Production and Processing | 64 | 63 |
Administration | 14 | 14 |
80 | 78 |
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 |
7. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets | 237,216 | 220,539 |
Loss on disposal of fixed assets | 16,411 | 31,283 |
Auditors' remuneration | 10,695 | 9,865 |
Foreign exchange differences | (3,913 | ) | (26,595 | ) |
Government grants | (39,087 | ) | (22,557 | ) |
8. | FINANCE COSTS |
2023 | 2022 |
£ | £ |
Bank interest |
Bank loan interest |
Hire purchase interest |
Invoice discounting charges |
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 |
Prior Year Adjustment | (127,332 | ) | - |
Total current tax |
Deferred tax |
Tax on profit |
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 |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
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 |
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 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
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: |
2023 | 2023 | 2022 | 2022 |
Carrying | Depreciation | Carrying | Depreciation |
Amount | Charge | Amount | Charge |
£ | £ | £ | £ |
Plant & Machinery | 576,358 | 64,040 | 649,808 | 57,740 |
Motor vehicles | - | - | 7,855 | 942 |
576,358 | 64,040 | 657,663 | 58,732 |
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 |
Work-in-progress |
Finished goods |
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 |
Amounts owed by related parties | 3,235,862 | - |
Other receivables |
Directors' current accounts | - | 297,239 |
Prepayments and accrued income |
14. | PAYABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 16) |
Hire purchase contracts (see note 17) |
Trade payables |
Corporation Tax |
Social security and other taxes |
Other payables |
Directors' current accounts | 2,629,946 | - |
Accruals and deferred income |
15. | PAYABLES: AMOUNTS FALLING DUE AFTER ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans (see note 16) |
Hire purchase contracts (see note 17) |
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 |
Bank loans |
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 |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
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 |
Between one and five years |
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 2022 | 394,271 | 120,684 | 514,955 |
Charge to Income Statement during year | 37,606 | 60,898 | 98,504 |
Balance at 31 December 2023 | 431,877 | 181,582 | 613,459 |
The provision for deferred taxation is made up as follows: |
2023 | 2022 |
£ | £ |
Accelerated capital allowances | 424,663 | 390,605 |
Other timing differences | 7,214 | 3,666 |
431,877 | 394,271 |
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: | £ | £ |
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. |