Company registration number 13224626 (England and Wales)
TURNTIDE DRIVES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
TURNTIDE DRIVES LIMITED
COMPANY INFORMATION
Directors
M Cox
S Hornyak
(Appointed 11 June 2024)
Company number
13224626
Registered office
Turntide Drives
Eighth Avenue
Team Valley Trading Estate
Gateshead
England
NE11 0QA
Auditor
Sumer Auditco Limited
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
TURNTIDE DRIVES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 20
TURNTIDE DRIVES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The principal activity of the company continued to be that of development of low carbon vehicle technology.
The company has continued to make progress in the period, with turnover increasing to £9.5m in the year (2022 - £4.7m). Despite having made a loss, to facilitate our growth aspirations, we have continued to invest in the business through support by the ultimate parent; particularly in our Research and Development and New Product Introduction areas of the business.
Future developments
It is now very clear that electrification is accelerating across the world, driven by government directives, environmental concerns and rapid improvement in battery cell technology, although this brings about a more competitive landscape and marketplace.
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 board reviews these risks and puts in place policies to mitigate them.
The key business and financial risks are:
Price risk
The principal risk to the business is price risk through the fluctuation of supplier prices. The directors manage price risk on an ongoing basis to ensure they remain competitive within the market.
Employees
The supply of skilled engineers is a risk for the company as demand can fluctuate depending on the number of contracts. The directors are closely involved with the required staffing levels which helps to manage this risk.
Environment, health and safety incidents
Appropriate measures are implemented to ensure the risk of any environmental and health and safety issues are minimised.
Liquidity risk
The directors regularly monitor the financial information to ensure that any risks in this area are considered on a timely basis ensuring the company has sufficient working capital.
Credit risk
The directors regularly monitors debtors to ensure that any risks of bad and doubtful debts are provided for on a timely basis.
Key performance indicators
The directors consider turnover, gross profit margin, and EBITDA (earnings before interest, tax, depreciation and amortisation) to be key measures of the company's performance:
The loss after tax for the period was £(7,403,154) (2022 - £(11,535,987)) and the net liabilities position at the period end was £22,009,354 (2022 - £14,606,200).
The directors consider the company's results to be satisfactory in light of current market conditions.
TURNTIDE DRIVES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
S Hornyak
Director
24 January 2025
TURNTIDE DRIVES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
C R Pennison
(Resigned 31 December 2023)
R J Morris
(Resigned 8 October 2023)
M S Karim
(Resigned 30 August 2024)
M Cox
S Hornyak
(Appointed 11 June 2024)
Auditor
In accordance with the company's articles, a resolution proposing that Sumer Auditco Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
TURNTIDE DRIVES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
S Hornyak
Director
24 January 2025
TURNTIDE DRIVES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TURNTIDE DRIVES LIMITED
- 5 -
Opinion
We have audited the financial statements of Turntide Drives Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
TURNTIDE DRIVES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TURNTIDE DRIVES LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
TURNTIDE DRIVES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TURNTIDE DRIVES LIMITED (CONTINUED)
- 7 -
Capability of the audit in detecting irregularities, including fraud
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Stephen Slater
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
28 January 2025
TURNTIDE DRIVES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,476,119
4,660,355
Cost of sales
(6,626,645)
(4,185,092)
Gross profit
2,849,474
475,263
Administrative expenses
(9,981,023)
(10,336,301)
Other operating income
2,947
27,473
Exceptional item
4
(2,095,999)
Operating loss
5
(7,128,602)
(11,929,564)
Interest payable and similar expenses
7
(1,217,657)
(326,860)
Loss before taxation
(8,346,259)
(12,256,424)
Tax on loss
8
943,105
720,437
Loss for the financial year
(7,403,154)
(11,535,987)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TURNTIDE DRIVES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Loss for the year
(7,403,154)
(11,535,987)
Other comprehensive income
-
-
Total comprehensive income for the year
(7,403,154)
(11,535,987)
TURNTIDE DRIVES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,528,265
1,799,631
Current assets
Stocks
10
1,092,325
522,496
Debtors
11
3,641,829
2,174,970
Cash at bank and in hand
867,972
1,227,443
5,602,126
3,924,909
Creditors: amounts falling due within one year
12
(28,927,942)
(20,330,740)
Net current liabilities
(23,325,816)
(16,405,831)
Total assets less current liabilities
(21,797,551)
(14,606,200)
Provisions for liabilities
Provisions
13
211,803
(211,803)
-
Net liabilities
(22,009,354)
(14,606,200)
Capital and reserves
Called up share capital
15
1
1
Profit and loss reserves
(22,009,355)
(14,606,201)
Total equity
(22,009,354)
(14,606,200)
The financial statements were approved by the board of directors and authorised for issue on 24 January 2025 and are signed on its behalf by:
S Hornyak
Director
Company registration number 13224626 (England and Wales)
TURNTIDE DRIVES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1
(3,070,214)
(3,070,213)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(11,535,987)
(11,535,987)
Balance at 31 December 2022
1
(14,606,201)
(14,606,200)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(7,403,154)
(7,403,154)
Balance at 31 December 2023
1
(22,009,355)
(22,009,354)
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Turntide Drives Limited is a private company limited by shares incorporated in England and Wales. The registered office is Turntide Drives, Eighth Avenue, Team Valley Trading Estate, Gateshead, England, NE11 0QA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ : basis of determining fair values;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Turntide Transport Limited. These consolidated financial statements are available from its registered office, Turntide Drives Eighth Avenue, Team Valley Trading Estate, Gateshead, United Kingdom, NE11 0QA.
1.2
Going concern
The financial statements have been prepared on the going concern basis. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, subject to the continued support of the UK Group headed by Turntide Transport Ltd, and ultimate parent company, Turntide Technologies Inc (“TT Inc”). true
The ultimate parent company’s strategy has been to accelerate technological investments in select markets to ensure its long-term success. Since its inception, TT Inc has incurred net losses and negative cash flows from operations. In order to be able to be able to support the parent company and group, the ultimate parent company will require additional liquidity to meet its 12 months working capital requirement. TT Inc plans to continue financing its operations through revenues from future sales, debt, and equity financing; whilst also reducing the cash burden through efficiencies achieved in operations.
Having assessed the expected funding requirements of the company for the next 12 months, the directors are confident that the current cash levels of the TT Inc group and the measures outlined above mitigate the risk of going concern uncertainty and will ensure that TT Inc is able to continue to provide sufficient support for at least twelve months from date of approval of these financial statements.
The directors of Turntide Technologies Inc and Turntide Transport Ltd have confirmed that it will provide the support to allow the company to continue as a going concern for at least twelve months from date of approval of these financial statements. As such the financial statements have been prepared on a going concern basis.
1.3
Turnover
Turnover represents the amounts derived from the provision of low carbon products and services to customers net of value added tax and trade discounts.
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Revenue from the sale of the low carbon products and services are recognised when the significant risks and rewards of ownership of the goods and services have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
7 years straight line
Fixtures and fittings
5 years straight line
Computers
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
1.8
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.
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
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, if considered material to the financial statements.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Warranty provision
The company provides warranties on sales of batteries for a 2 year period following completion of the sale, unless additional warranty periods are specifically agreed in line with the user application. The directors have estimated the likely cost of these warranties based on historic experience of warranty claims. This is based on historical experience of costs incurred relating to historical sales. The carrying value of this provision is £211,803.
Determining residual values and useful economic lives of intangible and tangible fixed assets
The company depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management.
Judgement is applied by management when determining the residual values of tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life.
The carrying amount of tangible fixed assets at the reporting date was £1,528,265 (2022 - £1,799,631).
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Inverter sales
9,476,119
4,660,355
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
7,088,990
2,986,581
Europe
1,900,938
888,482
Rest of World
486,191
785,292
9,476,119
4,660,355
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Exceptional item
2023
2022
£
£
Expenditure
Additional contingent consideration payable
-
2,095,999
5
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Exchange losses
16,971
127,816
Research and development costs
185,316
225,564
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
12,000
Depreciation of owned tangible fixed assets
445,170
398,132
Loss on disposal of tangible fixed assets
55
-
Operating lease charges
310,000
310,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administrative
94
96
Directors
3
4
Total
97
100
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,635,638
5,618,357
Social security costs
632,732
599,200
Pension costs
348,409
317,073
6,616,779
6,534,630
7
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
1,217,657
326,860
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
8
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(943,105)
(720,437)
The main rate of corporation tax increased to 25% from 1 April 2023 under the Finance Bill 2021. Deferred tax has been provided at the rates expected to be in place when the timing differences reverse. A marginal rate of 23.5% has been used for the year to 31 December 2023 when assessing the corporation tax charge as below.
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(8,346,259)
(12,256,424)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(1,961,371)
(2,328,721)
Tax effect of expenses that are not deductible in determining taxable profit
1,311
928
Unutilised tax losses carried forward
1,916,530
2,272,470
Group relief
43,530
55,323
Research and development tax credit
(943,105)
(720,437)
Taxation credit for the year
(943,105)
(720,437)
9
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
1,613,813
374,080
371,407
2,359,300
Additions
117,015
118,349
235,364
Disposals
(61,810)
(61,810)
At 31 December 2023
1,669,018
374,080
489,756
2,532,854
Depreciation and impairment
At 1 January 2023
312,726
117,736
129,207
559,669
Depreciation charged in the year
228,490
74,816
141,864
445,170
Eliminated in respect of disposals
(250)
(250)
At 31 December 2023
540,966
192,552
271,071
1,004,589
Carrying amount
At 31 December 2023
1,128,052
181,528
218,685
1,528,265
At 31 December 2022
1,301,087
256,344
242,200
1,799,631
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,092,325
522,496
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,515,552
1,017,534
Corporation tax recoverable
1,663,542
720,437
Other debtors
64,453
169,671
Prepayments and accrued income
398,282
267,328
3,641,829
2,174,970
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,053,869
1,129,399
Amounts owed to group undertakings
24,390,282
15,993,181
Taxation and social security
567,981
154,617
Other creditors
2,396,098
2,347,562
Accruals and deferred income
519,712
705,981
28,927,942
20,330,740
13
Provisions for liabilities
2023
2022
£
£
Batery warranty provision
211,803
-
Movements on provisions:
Batery warranty provision
£
Additional provisions in the year
211,803
TURNTIDE DRIVES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Provisions for liabilities
(Continued)
- 20 -
Battery warranty provision
The company provides warranties on sales of batteries for a 2 year period following completion of the sale, unless additional warranty periods are specifically agreed in line with the user application. The directors have estimated the likely cost of these warranties based on historic experience of warranty claims. The nature of the warranties mean that the amount and timing of payments is uncertain, however costs are expected to be realised within a period of not more than 2 years in most cases.
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
348,409
317,073
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
16
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
310,000
310,000
Between two and five years
1,240,000
1,240,000
In over five years
1,007,500
1,317,500
2,557,500
2,867,500
17
Ultimate controlling party
The company's parent undertaking is Collingwood Solutions Limited, a company incorporated in England and Wales.
The company's ultimate UK parent undertaking is Turntide Transport Limited, a company incorporated in England and Wales and its registered office is Turntide Drives Eighth Avenue, Team Valley Trading Estate, Gateshead, United Kingdom, NE11 0QA.
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