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Registration number: NI007111

N.K. Coatings Ltd

Annual Report and Financial Statements

for the Year Ended 30 April 2024

 

N.K. Coatings Ltd

Contents

Company Information

1

Strategic Report

2

Directors' Report

3

Independent Auditor's Report

4 to 6

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10 to 24

 

N.K. Coatings Ltd

Company Information

Directors

Allan Davidson

Paul Harvey

Helen Rice

Simon Ferguson

Felix Maginn

Sharon Davidson

Company secretary

Simon Ferguson

Registered office

4 Michelin Road
Mallusk
County Antrim
BT36 4PT

Solicitors

Millar McCall Wylie
Imperial House
Donegall Square East
Belfast
County Antrim
BT1 5HD

Bankers

Danske Bank
North Business Centre
1-2 Broadway
Ballymena
County Antrim
BT43 7AA

Auditors

RBCA Limited
Linenhall Exchange
26 Linenhall Street
Belfast
BT2 8BG

Company number

NI007111

 

N.K. Coatings Ltd

Strategic Report for the Year Ended 30 April 2024

The directors present their strategic report for the year ended 30 April 2024.

Principal activity

The principal activity of the company is that of galvanising steel products and providing other anti-corrosive treatments.

Fair review of the business

The directors aim to present a balanced and comprehensive review of the development and performance of the company during the year and its position as at 30 April 2024. This review is consistent with the size and nature of the business and is written in the context of the risks and uncertainties it faces.

The directors are pleased with the company results for the year. The directors continue to identify opportunities to increase turnover in the galvanising division of the business and continue to monitor and reduce costs where possible.

Principal risks and uncertainties

The key risks and uncertainties affecting the company are considered to relate to competition from other businesses, employee retention, product availability and the general downturn in customer spending.

Financial key performance indicators

The directors consider that the key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross margin, operating profit and net assets.

There has been an increase in turnover of 6.6% from £10.05m to £10.71m. However, the gross profit margin has decreased from 40% in 2023 to 35%.

The company had an operating profit for the year of £1.39m compared to an operating profit of £1.19m in 2023.

The net assets have decreased from £4.0m in 2023 to £0.8m, after paying a dividend of £4.0m to NK Holdings Ltd.

Approved by the Board on 19 November 2024 and signed on its behalf by:

.........................................
Allan Davidson
Director

.........................................
Paul Harvey
Director

 
     
 

N.K. Coatings Ltd

Directors' Report for the Year Ended 30 April 2024

The directors present their report and the financial statements for the year ended 30 April 2024.

Directors of the company

The directors who held office during the year were as follows:

Allan Davidson

Paul Harvey

Helen Rice

Simon Ferguson - Company secretary and director

Felix Maginn

Sharon Davidson

Statement of directors' responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Approved by the Board on 19 November 2024 and signed on its behalf by:

.........................................
Allan Davidson
Director

.........................................
Paul Harvey
Director

 
     
 

N.K. Coatings Ltd

Independent Auditor's Report to the Members of N.K. Coatings Ltd

Opinion

We have audited the financial statements of N.K. Coatings Ltd (the 'company') for the year ended 30 April 2024, which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and 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 30 April 2024 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 auditor 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 original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s 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 there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

N.K. Coatings Ltd

Independent Auditor's Report to the Members of N.K. Coatings Ltd

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of our 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 and 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' Report, set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the directors and other management (as required by auditing standards);

We had regard to laws and regulations in areas that directly affect the financial statements including financial reporting and taxation legislation. We considered that extent of compliance with those laws and regulations as part of our procedures on the related financial statement items;

With the exception of any known or possible non-compliance, and as required by auditing standards, our work in respect of these was limited to enquiry of the directors;

 

N.K. Coatings Ltd

Independent Auditor's Report to the Members of N.K. Coatings Ltd

We communicated applicable laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit;

We addressed the risk of fraud through management override of controls, by testing the appropriateness of journal entries, and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential basis; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business; and

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Brian Stewart (Senior Statutory Auditor)
For and on behalf of RBCA Limited, Statutory Auditor

Linenhall Exchange
26 Linenhall Street
Belfast
BT2 8BG

19 November 2024

 

N.K. Coatings Ltd

Statement of Comprehensive Income for the Year Ended 30 April 2024

Note

2024
£

2023
£

Turnover

3

10,709,982

10,048,222

Cost of sales

 

(6,940,654)

(6,032,875)

Gross profit

 

3,769,328

4,015,347

Administrative expenses

 

(2,376,090)

(2,832,686)

Other operating income

4

83

7,913

Operating profit

6

1,393,321

1,190,574

Other interest receivable and similar income

7

2,350

949

Interest payable and similar expenses

8

(87,619)

(96,305)

   

(85,269)

(95,356)

Profit before tax

 

1,308,052

1,095,218

Tax on profit

11

(492,634)

(192,837)

Profit for the financial year

 

815,418

902,381

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

N.K. Coatings Ltd

(Registration number: NI007111)
Balance Sheet as at 30 April 2024

Note

2024
£

2023
£

Fixed assets

 

Tangible assets

12

3,640,005

3,413,734

Current assets

 

Stocks

13

1,327,979

1,370,547

Debtors

14

2,601,254

2,952,651

Cash at bank and in hand

 

824,980

752,610

 

4,754,213

5,075,808

Creditors: Amounts falling due within one year

15

(5,637,213)

(2,741,534)

Net current (liabilities)/assets

 

(883,000)

2,334,274

Total assets less current liabilities

 

2,757,005

5,748,008

Creditors: Amounts falling due after more than one year

15

(1,169,676)

(1,303,344)

Provisions for liabilities

16

(776,553)

(449,306)

Net assets

 

810,776

3,995,358

Capital and reserves

 

Called up share capital

65,200

65,200

Retained earnings

745,576

3,930,158

Shareholders' funds

 

810,776

3,995,358

Approved and authorised by the Board on 19 November 2024 and signed on its behalf by:
 

.........................................
Allan Davidson
Director

.........................................
Paul Harvey
Director

 
     
 

N.K. Coatings Ltd

Statement of Changes in Equity for the Year Ended 30 April 2024

Share capital
£

Retained earnings
£

Total
£

At 1 May 2023

65,200

3,930,158

3,995,358

Profit for the year

-

815,418

815,418

Dividends

-

(4,000,000)

(4,000,000)

At 30 April 2024

65,200

745,576

810,776

Share capital
£

Retained earnings
£

Total
£

At 1 May 2022

65,200

3,727,777

3,792,977

Profit for the year

-

902,381

902,381

Dividends

-

(700,000)

(700,000)

At 30 April 2023

65,200

3,930,158

3,995,358

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

1

General information

The company is a private company limited by share capital, incorporated in Northern Ireland.

The address of its registered office is:
4 Michelin Road
Mallusk
County Antrim
BT36 4PT
Northern Ireland

These financial statements were authorised for issue by the Board on 19 November 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Summary of disclosure exemptions

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and
disclosures;
- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
- Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel..

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

Going concern

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

Judgements

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

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

Key sources of estimation uncertainty

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

Fixed assets
The annual depreciation charge on fixed assets depends primarily on the estimated lives of each type of asset and estimates of residual values. The directors regularly review these asset lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset lives can have a significant impact on depreciation and amortisation charges for the period. Detail of the useful lives is included in the accounting policies.

Stocks
At each balance sheet date the company's stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The assessment of the selling price of such stock involves some estimation uncertainty.

Debtors
Short term debtors are measured at transaction price, less any impairment. Impairment of such debtors involves some estimation uncertainty.

Taxation
Judgements are made in relation to the calculation of certain aspects of the year end tax provisions and the respective tax charge. The management used external professional advice to support the year end provisions.
 

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
●The amount of revenue can be reliably measured;
● It is probable that future economic benefits will flow to the entity; and
● Specific criteria have been met for each of the company's activities.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Taxation

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

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

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

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

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

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold improvements

10% per annum straight line

Plant and equipment

10% - 25% per annum straight line

Fixtures and fittings

16.66% per annum straight line

Motor vehicles

25% per annum straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors 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 the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the statement of comprehensive income over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the statement of comprehensive income and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

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

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

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


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

Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

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

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

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


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

Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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


3

Turnover

The analysis of the company's turnover for the year analysed by class of business is as follows:

2024
£

2023
£

Galvanising and anti-corrosive treatments

10,709,982

10,048,222

The analysis of the company's turnover for the year by market is as follows:

2024
£

2023
£

UK

10,613,417

9,929,728

Republic of Ireland

96,565

118,494

10,709,982

10,048,222

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2024
£

2023
£

Sundry income

83

7,913

5

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2024
£

2023
£

Gain/(loss) on disposal of tangible assets

153,720

(5,625)

6

Operating profit

Arrived at after charging/(crediting)

2024
£

2023
£

Depreciation expense

568,594

599,595

Operating lease expense - plant and machinery

23,320

9,795

(Profit)/loss on disposal of property, plant and equipment

(153,720)

5,625

7

Other interest receivable and similar income

2024
£

2023
£

Interest income on bank deposits

2,350

949

8

Interest payable and similar expenses

2024
£

2023
£

Interest on bank overdrafts and borrowings

50,392

61,113

Interest on obligations under finance leases and hire purchase contracts

37,227

35,192

87,619

96,305

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
£

2023
£

Wages and salaries

3,420,017

3,294,275

Pension costs, defined contribution scheme

53,671

53,972

Other employee expense

14,795

13,012

3,488,483

3,361,259

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2024
No.

2023
No.

Production

69

76

Administration and support

19

19

Directors

6

6

94

101

10

Directors' remuneration

The directors' remuneration for the year was as follows:

2024
£

2023
£

Remuneration

257,010

409,414

11

Taxation

Tax charged in the statement of comprehensive income

2024
£

2023
£

Current taxation

UK corporation tax

165,387

141,337

Deferred taxation

Arising from origination and reversal of timing differences

327,247

51,500

Tax expense in the statement of comprehensive income

492,634

192,837

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

The tax on profit for the year is the same as the standard rate of corporation tax in the UK of 25% (2023 - 25%).

The differences are reconciled below:

2024
£

2023
£

Profit before tax

1,308,052

1,095,218

Corporation tax at standard rate

327,013

273,805

Adjustment in respect of prior year

-

(7,774)

Tax increase from effect of capital allowances and depreciation

114,196

-

Effect of change in corporation tax rate

-

(43,515)

Effect of expense not deductible in determining taxable profit (tax loss)

111,969

(29,679)

Tax decrease arising from group relief

(60,544)

-

Total tax charge

492,634

192,837

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

12

Tangible assets

Leasehold improvements
£

Plant and machinery
£

Fixtures and fittings
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 May 2023

997,818

5,376,049

213,004

207,316

6,794,187

Additions

470,260

286,154

22,600

75,830

854,844

Disposals

(1,210)

(552,188)

(25,402)

(88,795)

(667,595)

At 30 April 2024

1,466,868

5,110,015

210,202

194,351

6,981,436

Depreciation

At 1 May 2023

206,019

2,929,588

111,409

133,437

3,380,453

Charge for the year

100,490

407,624

27,515

35,471

571,100

Eliminated on disposal

(847)

(495,718)

(24,762)

(88,795)

(610,122)

At 30 April 2024

305,662

2,841,494

114,162

80,113

3,341,431

Carrying amount

At 30 April 2024

1,161,206

2,268,521

96,040

114,238

3,640,005

At 30 April 2023

791,799

2,446,461

101,595

73,879

3,413,734

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

2024
£

2023
£

Plant and equipment

475,247

544,332

Motor vehicles

69,494

1,667

544,741

545,999

13

Stocks

2024
£

2023
£

Raw materials and consumables

1,327,979

1,370,547

14

Debtors

Current

Note

2024
£

2023
£

Trade debtors

 

2,301,965

2,281,926

Amounts owed by group undertakings

22

189,682

409,698

Prepayments and accrued income

 

96,520

193,172

Other debtors

 

13,087

67,855

   

2,601,254

2,952,651

15

Creditors

Note

2024
£

2023
£

Due within one year

 

Loans and borrowings

19

366,284

379,817

Trade creditors

 

669,763

712,895

Amounts due to group undertakings

22

3,771,783

854,566

Corporation tax

11

103,985

20,501

Other taxation and social security

 

307,952

306,395

Accruals and deferred income

 

384,454

440,137

Other creditors

 

32,992

27,223

 

5,637,213

2,741,534

Due after one year

 

Loans and borrowings

19

1,169,676

1,303,344

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

16

Provisions for liabilities

Deferred tax
£

Total
£

At 1 May 2023

449,306

449,306

Additional provisions

327,247

327,247

At 30 April 2024

776,553

776,553

17

Pension schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension charge for the year represents contributions payable by the company to the scheme and amounted to £53,671 (2023 - £53,972).

18

Share capital

Allotted, called up and fully paid shares

2024

2023

No.

£

No.

£

Ordinary shares of £1 each of £1 each

65,200

65,200

65,200

65,200

       

19

Loans and borrowings

Non-current loans and borrowings

2024
£

2023
£

Bank borrowings

908,088

1,082,361

Obligations under finance leases

261,588

220,983

1,169,676

1,303,344

Current loans and borrowings

2024
£

2023
£

Bank borrowings

166,791

166,791

Obligations under finance leases

199,493

213,026

366,284

379,817

 

N.K. Coatings Ltd

Notes to the Financial Statements for the Year Ended 30 April 2024

Bank borrowings

Bank loans are secured by a floating charge over the assets and undertakings of the company and a fixed charge over the book debts of the company.

Bank loans includes two loans repayable by monthly and quarterly instalments at interest rates of 2.96% and 7.25%.

20

Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Not later than one year

199,493

213,026

Later than one year and not later than five years

261,588

220,983

461,081

434,009

Obligations under finance leases are secured on the assets to which they relate.

21

Commitments and contingencies

The company has given an unlimited guarantee in respect of the bank borrowings of N.K. Holdings Limited, the parent company. As at 30 April 2024 N.K Holdings Limited bank borrowings are £766,198.

22

Related party transactions

Transactions with related parties
As the company is a wholly owned subsidiary, the directors have taken advantage of the exemption from disclosing related party transactions with other wholly owned group companies, in accordance with FRS 102.

No other transactions with related parties were undertaken that are required to be disclosed under FRS 102.

Directors' transactions
At the year end £Nil (2023 - £40,000) was due to the company from a director.

23

Parent company

N.K. Holdings Limited, a company incorporated in Northern Ireland, is considered by the directors as being the company's controlling party and ultimate parent company.

N.K. Holdings Limited has included the results of N.K. Coatings Limited in its group financial statements, copies of which are available from its registered office at 40 Trailcock Road, Carrickfergus, BT38 7NU.