Company registration number 01472439 (England and Wales)
HYPHOSE LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
PAGES FOR FILING WITH REGISTRAR
HYPHOSE LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
HYPHOSE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 1 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
4
455,490
439,449
Current assets
Stocks
948,719
912,564
Debtors
5
611,269
460,096
Cash at bank and in hand
21,121
32,836
1,581,109
1,405,496
Creditors: amounts falling due within one year
6
(1,198,284)
(1,237,679)
Net current assets
382,825
167,817
Total assets less current liabilities
838,315
607,266
Creditors: amounts falling due after more than one year
7
(201,948)
(192,418)
Provisions for liabilities
(5,576)
Net assets
630,791
414,848
Capital and reserves
Called up share capital
155
155
Capital redemption reserve
845
845
Profit and loss reserves
629,791
413,848
Total equity
630,791
414,848
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 September 2022 and are signed on its behalf by:
Mr R J Davies
Director
Company Registration No. 01472439
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
1
Accounting policies
Company information
Hyphose Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
10 - 11 Charterhouse Square, London, EC1M 6EE. The trading addresses are as follows; Unit 3, Warrior Business Centre, Fitzherbert Road, Portsmouth, PO6 1TX, 1 Trinity Industrial Estate, Millbrook Road, Southampton, SO15 0LA and 5 Abingdon Road, Poole, BH17 0UG.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
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.
1.2
Going concern
The first half of the year under report remained particularly challenging operationally as a result of the continuation of the Covid-19 pandemic. Despite these challenges, the group’s trading locations remained open throughout this period, with sites continuing to adapt to the implementation of safe working practices because of the pandemic. Trading performance has remained consistently strong, returning comparatively to pre-pandemic levels, re-enforcing the robust underlying demand for the products and services that the group provides across a wide range of industries.
Trading since the balance sheet date has been profitable and is tracking well ahead of 2021 on a like for like basis. Prudent cash flow forecasts have been prepared alongside the completion of the annual group budget for the upcoming financial year and have been referred to by the directors and at the time of signing the financial statements. The group has headroom in its various facilities in excess of £5,000,000. Since the balance sheet date, various key debt items have also been cleared from the group balance sheet, as a consequence of the acquisition of the group by Diploma PLC in April 2022. This has generated a significantly improved net asset position across the group.
Confirmation has also been provided by principal funders and debt providers that they will not seek repayment for at least twelve months from the date of the financial statements being approved. Other external economic factors such as the ongoing war in Ukraine, and the Brexit transition period have also been considered as part of the group’s adoption of the going concern basis. Whilst certain supplier lead times have been extended by a combination of these external factors, there has been minimal impact upon the cash flow of the group and its anticipated cash flow over the short to medium term.
Taken together, these points indicate that the group will be able to meet all its liabilities as they are projected to fall due for payment over the next twelve months, leading the directors to conclude that there are no material uncertainties over adopting the going concern basis at the time of signing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 3 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost
.
Amortisation 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:
Computer software
5 years straight line
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, 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:
Freehold buildings
50 years straight line
Plant and equipment
5 years straight line
Fixtures and fittings
10 years straight line
Computers
4 years straight line
Motor vehicles
4 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
Stocks
Stocks are stated at the lower of
average
cost and estimated selling price less costs to complete and sell.
Average c
ost comprises direct materials and, where applicable, those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash at bank and in hand
are basic financial assets
and
include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 4 -
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.
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
.
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
and
loans from
fellow group companies, 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
paymen
ts 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. A
m
ounts 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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 5 -
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.
1.11
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.
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
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 lease
s
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
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.
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
29
35
3
Intangible fixed assets
Other
£
Cost
At 1 January 2021 and 31 December 2021
5,106
Amortisation and impairment
At 1 January 2021 and 31 December 2021
5,106
Carrying amount
At 31 December 2021
At 31 December 2020
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
4
Tangible fixed assets
Freehold buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2021
241,581
60,875
307,539
27,860
434,582
1,072,437
Additions
1,411
1,400
100,259
103,070
Disposals
(131,145)
(131,145)
At 31 December 2021
241,581
62,286
308,939
27,860
403,696
1,044,362
Depreciation and impairment
At 1 January 2021
21,600
43,376
168,032
25,665
374,315
632,988
Depreciation charged in the year
3,200
8,952
28,506
3,485
38,836
82,979
Eliminated in respect of disposals
(127,095)
(127,095)
At 31 December 2021
24,800
52,328
196,538
29,150
286,056
588,872
Carrying amount
At 31 December 2021
216,781
9,958
112,401
(1,290)
117,640
455,490
At 31 December 2020
219,981
17,499
139,507
2,195
60,267
439,449
5
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
434,192
330,680
Amounts owed by group undertakings
100,000
100,000
Other debtors
77,077
29,416
611,269
460,096
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
6
Creditors: amounts falling due within one year
2021
2020
£
£
Bank loans and overdrafts
208,959
28,743
Trade creditors
456,076
329,133
Amounts owed to group undertakings
455,022
700,022
Taxation and social security
29,508
128,662
Other creditors
48,719
51,119
1,198,284
1,237,679
Creditors due in less than one year totalling £241,418 (2020: £61,124) are secured over the assets of the company.
7
Creditors: amounts falling due after more than one year
2021
2020
£
£
Bank loans and overdrafts
140,915
151,739
Other creditors
61,033
40,679
201,948
192,418
Creditors due in greater than one year totalling £201,948 (2020: £192,418) are secured over the assets of the company.
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Joe Sullivan and the auditor was MHA Moore and Smalley.
9
Financial commitments, guarantees and contingent liabilities
At the balance sheet date the company was party to a cross company guarantee covering group borrowings. The security given in this respect was limited to a total of £4,911,209.
10
Events after the reporting date
On 6 April 2022, R&G Fluid Power Group Ltd, the ultimate parent company at the balance sheet date, was acquired by a subsidiary of Diploma PLC. Subsequent to this transaction, the group effected a refinance such that overdraft and term debt balances lent by its long-standing banking partner were settled in full. Each of these matters are treated as a non-adjusting post balance sheet event within these financial statements.
HYPHOSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2021
2020
£
£
127,938
30,300
12
Related party transactions
The company has taken advantage of the exemption conferred by section 33 FRS 102, namely from disclosing any transactions entered into between two or more members of the group. Provided that any subsidiary which is party to the transaction is wholly owned by such a member.
13
Parent company
The immediate parent company is R&G Fluid Power Group Limited, a company incorporated in England and Wales. The ultimate parent company is Diploma PLC, a company incorporated in England and Wales, with a registered office located at 10-11 Charterhouse Square, London, England, EC1M 6EE.
The only group in which these results of the company are consolidated is that headed by R&G Fluid Power Group Limited. Copies of these financial statements can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.