Company registration number 10404128 (England and Wales)
R&G FLUID POWER GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
R&G FLUID POWER GROUP LIMITED
COMPANY INFORMATION
Directors
Mr R J Davies
Ms B Gibbes
(Appointed 6 April 2022)
Secretary
Mr J Morrison
Company number
10404128
Registered office
10 - 11 Charterhouse Square
London
EC1M 6EE
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
R&G FLUID POWER GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 11
Group statement of comprehensive income
12
Group balance sheet
13 - 14
Company balance sheet
15
Group statement of changes in equity
16
Company statement of changes in equity
17
Group statement of cash flows
18
Notes to the financial statements
19 - 46
R&G FLUID POWER GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
Group turnover in the period reached £48.0Mn (2020: £38.4Mn). The group has continued its impressive recovery from the impact of the COVID-19 pandemic, which has led to the significant revenue growth of 25.1%. The group continues to invest in the ongoing development of its product offering and the maintenance of a healthy stock position to support its wide-ranging and growing customer base.
A gross profit of £22.3Mn (2020: £18.0Mn) represents a gross margin of 46.5% (2020: 46.9%). The slight reduction in gross margin was reflective of the ongoing pressure of external economic factors in the UK on import and distribution costs.
Profit for the year after taxation amounted to £3.2Mn compared with £1.3Mn for the previous year, an increase of £1.9Mn. The increase on prior year reflects progress in all of the group’s subsidiaries and, in particular, a strong recovery from the COVID-19 pandemic in the performance of the group’s joint venture, Merseyflex Limited
The group expanded its customer and geographic reach with two further acquisitions within its Pneumatic division. Additionally, the group acquired the residual minority interests in three of its existing subsidiaries and, effective 01 January 2022, has acquired the controlling interest in its joint venture, Merseyflex Limited. EBITDA increased by 73.2% to £7. 5Mn (2020: £4.3Mn). The rise on prior year was positively impacted by the recovery from the COVID-19 pandemic and further investment in people, capital and inventory across the group. The group continues to display resilience despite strong economic headwinds. The group increased its amortisation of intangible assets to £1.3Mn (2020: £1.0Mn), due to an increase in goodwill through the acquisition of minority interests held in three existing group companies.
At the 31 December 2021, net assets showed an increase of 5% compared with the position at the previous year end. Group net cash flow for the year was £ (1.3)Mn (2020: £4.8Mn) reflecting the increase in working capital needs to fund the growth in activity. Net working capital grew by £5.2Mn (2020: reduced by £0.9Mn) in order to fund the higher activity level. All key balance sheet indicators remain in line with expectations; indeed, stock days have reduced by 6% year on year.
Contributions from business acquisitions during the year is shown in note 28 to the financial statements.
The directors consider the state of the group’s affairs to be satisfactory given the current economic climate and are in line with their future plans.
R&G FLUID POWER GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties
The board has overall responsibility for the group’s approach to assessing risk and systems of internal control and for monitoring their effectiveness in providing its shareholders with a return that is consistent with a responsible assessment and mitigation of risks. We have set out several risk factors below, that we believe could cause our actual future results to differ materially from expected results.
Business conditions and the general economy
The group’s profitability could be adversely affected by a worsening of general economic conditions in the United Kingdom. Factors such as the economy’s ability to fully recover after the worldwide Covid-19 pandemic and the resultant problems with availability of base raw materials, causing onwards supply chain difficulties and fuelling inflationary price rises. However, since the year end, trading has been buoyant and significantly ahead of pre-covid levels.
Liquidity and financing
Funding requirements are managed for both the short and long term cash flow needs of the group’s businesses, ensuring sufficient funds are available for operations and other projects. The trading patterns and business plans, together with budgets, are agreed with the board and banking relationship partners.
Interest rate risk
The group’s exposure to market risk for changes in interest rates relates primarily to the company’s bank borrowings. The group’s policy is to manage interest cost using a mixture of fixed and variable rate debt; fixed rate debt accounting for over 75% of total debt in the group. The group’s exposure to interest rate fluctuations on its borrowings is manged by the use of commercial rates related to the Bank of England base rate.
Credit risk
The company trades with only recognised, creditworthy third parties. It is the company’s policy that all customers who wish to trade on credit terms are subject to credit vetting procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the company’s exposure to bad debts are mitigated.
Regulatory compliance risk
The company is subject to regulatory compliance risk which can arise from a failure to comply fully with the laws, regulations or codes applicable, for example health and safety, licensing and fire regulations. Non-compliance can lead to for example, fines.
Competition
The group competes with numerous other organisations, in a market that is extremely fragmented.
Failure of information systems
The group’s business is dependant on the efficient and uninterrupted operation of our information technology and computer systems, which are vulnerable to damage or interruption from power loss, telecommunications failure, sabotage, vandalism or similar misconduct. Contingency and recovery plans are in place to mitigate the impact of such failures. The group continues to take reasonable steps to ensure improvement in the robustness of its systems.
Covid-19 pandemic
The directors are mindful of the global challenge presented by Covid-19 and the expected long term issues that this event may bring to the group and our stakeholders. The group is committed to protecting all affected by our business operations and abiding by all Government guidelines.
Future developments
The Directors look to the continued growth, development and sustainability of the group.
R&G FLUID POWER GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
Key performance indicators
Measure 2021 2020
Sales £48.01m £38.39m
Gross profit £22.31m £17.99m
Operating profit £4.44m £2.48m
Profit after tax £3.19m £1.33m
Section 172 statement
Each director is required to act in the way he considers, in good faith, would most likely promote the success of the group and company for the benefit of its members as a whole, but having regard to a range of factors set out in Section 172 (1) of the Companies Act 2006.
The Board monitors and reviews the strategic objectives against forward plans. Regular reviews are held across key business areas, including customer services, health, safety & the environment, operational and financial performance, risks and opportunities. The group’s performance is reviewed on a monthly basis.
The long term consequences
All decisions are geared towards the maintenance of a relevant, forward thinking business, operating in a highly competitive market place. Such strategy informs capital expenditure plans, long term funding, operational efficiency and staff development.
The interest of all employees
The Directors believe the group and company are a responsible employer and attempt to provide all the tools and information required for each employee to use their knowledge and talents to fully engage in their role, to the best of their abilities, within a safe and welcoming environment.
Stakeholder business relationships
The Directors behave responsibly towards all suppliers, customers and other stakeholders. Each party is allocated sufficient attention from the board and company colleagues. Capital allocation is designed to equitably meet their requirements, therefore seeking to ensure they all benefit from the long term success of the group and company.
Impact on the environment
The Directors factor environmental matters into consideration as part of their decision-making progress, in order to minimise the group’s impact on the environment wherever possible. By communicating our aims to the employees and our suppliers, we strive to ensure that all parties are aware of their environmental responsibilities. The Directors are also mindful of the impact business can have with local communities. The group engages with their local communities in various locations and also aims to raise funds for charity each year.
Maintaining a reputation for high standards of business conduct
The original business was founded in 2000 by Mr Ford and has been under his stewardship between then and the acquisition of the group by Diploma PLC, as referenced in note 32 to the financial statements. Various businesses have since been introduced into the group since then. Throughout this time, the Directors have held integrity and trust at the forefront of all decisions and endeavoured to build a culture which is both reflective of this and evident to all with whom the company interacts.
R&G FLUID POWER GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
Mr R J Davies
Director
30 September 2022
R&G FLUID POWER GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the entity is that of a holding company. The principal activities of the group lie within the import, sale and distribution of industrial hoses, couplings along with complementary products and services in the industrial liquid transfer and pneumatic sectors.
The company changed its name from R&G Acquisitions Ltd to R&G Fluid Power Group Limited on 8 January 2020.
Results and dividends
The results for the year are set out on page 10.
During the year dividends on ordinary share capital were paid to company shareholders and group non-controlling interests amounting to £1,041,533.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C F Ford
(Resigned 6 April 2022)
Mr G Dallimore
(Resigned 6 April 2022)
Mr R J Davies
Mr B K Scowcroft
(Resigned 6 April 2022)
Ms B Gibbes
(Appointed 6 April 2022)
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
Under the SECR legislation we are mandated to include energy consumption, emissions, intensity metrics and all energy efficiency improvements implemented in our most recent financial period:
2021
2020
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
2,464,177
2,096,585
R&G FLUID POWER GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
2021
2020
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
216.10
198.40
- Fuel consumed for transport
116.50
87.60
332.60
286.00
Scope 2 - indirect emissions
- Electricity purchased
173.80
144.70
Total gross emissions
506.40
430.70
Intensity ratio
Tonnes CO2e per £1m of turnover
10.55
11.22
Quantification and reporting methodology
Scope 1 and 2 consumption and CO2 emission data has been calculated in line with the 2019 UK Government environmental reporting guidance. For transport costs, the group has analysed fuel card usage and mileage information where appropriate to establish the level of emissions for company fleet, cars, and business mileage.
The emission conversion factors consistent with the 2019 UK Government environmental reporting guidance have been used, utilising the current published kWh gross calorific value (CV) and kgCO2e emissions factors relevant for the reporting period.
Estimations undertaken to cover missing billing periods for properties directly invoiced to the group were calculated on a kWh/day basis pro-rata at individual meter level. These estimations equated to less than 2% of overall consumption.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes of CO2 emissions per £Million of group turnover, which is one of the recommended ratios for the sector.
Measures taken to improve energy efficiency
The group is continuing to focus on energy efficiency projects and increasing environmental performance. Government restrictions had a significant impact on the number of energy efficiency projects that could be undertaken in the previous reporting period.
There has been an investment in the current reporting period in modern LED lighting to reduce overall group electricity consumption and reduce operating costs. The group will continue its rolling programme to update lighting at all sites. The group also continues to invest in energy efficient vehicles, specifically electricity powered vehicles where appropriate. It also invested and upgraded commercial fleet vehicles with more energy efficient, lower emissions emitting diesel vehicles.
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 auditor
of the
company 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 auditor
of the
company
is
aware of that information.
R&G FLUID POWER GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
Strategic report
The
group
has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the
group
's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of
the principal risks and uncertainties and financial risk management.
On behalf of the board
Mr R J Davies
Director
30 September 2022
R&G FLUID POWER GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
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 group and company, and of the profit or loss of the group 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
R&G FLUID POWER GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF R&G FLUID POWER GROUP LIMITED
- 9 -
Opinion
We have audited the
financial statements of
R&G Fluid Power Group Limited
(the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and the parent company's affairs as at 31 December 2021 and of the group's 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.
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
group and
parent 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
group's and
parent
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.
R&G FLUID POWER GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF R&G FLUID POWER GROUP LIMITED
- 10 -
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'
r
eport 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
company and
their
environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
. 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement, 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
group's and the parent
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
group or the parent
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
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
-
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations and fraud;
-
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock provisions; and
-
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Because of the field in which the group operates, we identified the following areas as those most likely to have a material impact on the financial statements: health and safety, employment law and compliance with the UK Companies Act.
R&G FLUID POWER GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF R&G FLUID POWER GROUP LIMITED
- 11 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
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.
Joe Sullivan (Senior Statutory Auditor)
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
30 September 2022
R&G FLUID POWER GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
2021
2020
Notes
£
£
Turnover
3
48,014,856
38,392,353
Cost of sales
(25,701,568)
(20,399,299)
Gross profit
22,313,288
17,993,054
Administrative expenses
(18,001,995)
(16,747,005)
Other operating income
214,751
1,313,911
Group reorganisation costs
4
(86,610)
(75,517)
Operating profit
5
4,439,434
2,484,443
Share of results of joint ventures
375,702
(308,988)
Interest receivable and similar income
9
49,099
294,331
Interest payable and similar expenses
10
(772,597)
(541,864)
Profit before taxation
4,091,638
1,927,922
Tax on profit
11
(903,997)
(601,499)
Profit for the financial year
27
3,187,641
1,326,423
Profit for the financial year is attributable to:
- Owners of the parent company
3,013,009
898,858
- Non-controlling interests
174,632
427,565
3,187,641
1,326,423
Total comprehensive income for the year is attributable to:
- Owners of the parent company
3,013,009
898,858
- Non-controlling interests
174,632
427,565
3,187,641
1,326,423
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
R&G FLUID POWER GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 13 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
13
9,412,848
7,457,475
Other intangible assets
13
205,600
223,903
Total intangible assets
9,618,448
7,681,378
Tangible assets
14
7,362,442
6,050,956
Investments
15
1,750,923
1,375,221
18,731,813
15,107,555
Current assets
Stocks
18
10,444,327
8,865,149
Debtors
19
9,275,911
7,477,389
Cash at bank and in hand
2,408,015
2,632,254
22,128,253
18,974,792
Creditors: amounts falling due within one year
20
(15,274,230)
(11,407,968)
Net current assets
6,854,023
7,566,824
Total assets less current liabilities
25,585,836
22,674,379
Creditors: amounts falling due after more than one year
21
(17,758,465)
(15,585,657)
Provisions for liabilities
Deferred tax liability
24
868,991
483,554
(868,991)
(483,554)
Net assets
6,958,380
6,605,168
Capital and reserves
Called up share capital
26
1,100
1,100
Other reserves
27
1,610,000
1,610,000
Profit and loss reserves
27
5,099,860
3,088,840
Equity attributable to owners of the parent company
6,710,960
4,699,940
Non-controlling interests
247,420
1,905,228
6,958,380
6,605,168
R&G FLUID POWER GROUP LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2021
31 December 2021
- 14 -
The financial statements were approved by the board of directors and authorised for issue on 30 September 2022 and are signed on its behalf by:
30 September 2022
Mr R J Davies
Director
R&G FLUID POWER GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2021
31 December 2021
- 15 -
2021
2020
Notes
£
£
£
£
Fixed assets
Intangible assets
13
180,361
211,120
Tangible assets
14
931,350
113,435
Investments
15
16,669,493
12,726,689
17,781,204
13,051,244
Current assets
Debtors
19
6,403,349
6,637,615
Cash at bank and in hand
168,554
985
6,571,903
6,638,600
Creditors: amounts falling due within one year
20
(8,341,127)
(5,741,303)
Net current (liabilities)/assets
(1,769,224)
897,297
Total assets less current liabilities
16,011,980
13,948,541
Creditors: amounts falling due after more than one year
21
(14,195,246)
(12,357,912)
Provisions for liabilities
Deferred tax liability
24
176,012
40,073
(176,012)
(40,073)
Net assets
1,640,722
1,550,556
Capital and reserves
Called up share capital
26
1,100
1,100
Profit and loss reserves
27
1,639,622
1,549,456
Total equity
1,640,722
1,550,556
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s profit for the
period
was £1,092,155 (2020 - £1,563,547 profit).
The financial statements were approved by the board of directors and authorised for issue on 30 September 2022 and are signed on its behalf by:
30 September 2022
Mr R J Davies
Director
Company Registration No. 10404128
R&G FLUID POWER GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
Share capital
Other reserves
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2020
1,100
1,610,000
2,749,615
4,360,715
1,822,859
6,183,574
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
898,858
898,858
427,565
1,326,423
Dividends
12
-
-
(559,633)
(559,633)
(353,996)
(913,629)
Other movements
-
-
-
-
8,800
8,800
Balance at 31 December 2020
1,100
1,610,000
3,088,840
4,699,940
1,905,228
6,605,168
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
3,013,009
3,013,009
174,632
3,187,641
Dividends
12
-
-
(1,001,989)
(1,001,989)
(39,544)
(1,041,533)
Acquisition of subsidiary
-
-
-
-
77,802
77,802
Other movements
-
-
-
-
(1,870,698)
(1,870,698)
Balance at 31 December 2021
1,100
1,610,000
5,099,860
6,710,960
247,420
6,958,380
R&G FLUID POWER GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
1,100
545,542
546,642
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
1,563,547
1,563,547
Dividends
12
-
(559,633)
(559,633)
Balance at 31 December 2020
1,100
1,549,456
1,550,556
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
1,092,155
1,092,155
Dividends
12
-
(1,001,989)
(1,001,989)
Balance at 31 December 2021
1,100
1,639,622
1,640,722
R&G FLUID POWER GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
3,746,428
5,151,153
Interest paid
(772,597)
(541,864)
Income taxes paid
(516,957)
(669,500)
Net cash inflow from operating activities
2,456,874
3,939,789
Investing activities
Purchase of business
(979,433)
(1,342,972)
Purchase of intangible assets
(45,685)
(99,983)
Purchase of tangible fixed assets
(1,228,278)
(542,249)
Proceeds on disposal of tangible fixed assets
491,543
379,984
Receipts arising from loans made
751
23,975
Interest received
1
Dividends received
49,098
Net cash used in investing activities
(1,712,003)
(1,581,245)
Financing activities
Issue of preference shares
1,550,000
3,000,000
Repayment of borrowings
(1,212,297)
(2,221,397)
Proceeds of new bank loans
-
3,000,000
Repayment of bank loans
(587,158)
(142,791)
Payment of finance leases obligations
(704,821)
(323,016)
Dividends paid to equity shareholders
(1,001,989)
(559,633)
Dividends paid to non-controlling interests
(39,544)
(353,996)
Net cash (used in)/generated from financing activities
(1,995,809)
2,399,167
Net (decrease)/increase in cash and cash equivalents
(1,250,938)
4,757,711
Cash and cash equivalents at beginning of year
1,497,710
(3,260,001)
Cash and cash equivalents at end of year
246,772
1,497,710
Relating to:
Cash at bank and in hand
2,408,015
2,632,254
Bank overdrafts included in creditors payable within one year
(2,161,243)
(1,134,544)
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
1
Accounting policies
Company information
R&G Fluid Power Group Limited
(“the company”)
is a
private
limited company domiciled and incorporated in
England and Wales
.
The registered office is
10 - 11 Charterhouse Square, London, EC1M 6EE. The principal group trading address is 71A Roman Way, Longridge Road, Ribbleton, Preston, PR2 5BE.
The group consists of R&G Fluid Power Group Limited and all of its subsidiaries.
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 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.
The 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 for parent company information presented within the consolidated financial statements:
-
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’
:
Interest
income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
1.2
Business combinations
In the parent company
financial statements, t
he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 20 -
1.3
Basis of consolidation
The consolidated
financial statements
incorporate those of R&G Fluid Power Group Limited and all of its subsidiaries (ie entities that the
g
roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the
period
are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All
financial statements
are made up to 31 December 2021
.
Where necessary, adjustments are made to the
financial statements
of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures.
Investments in joint ventures are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures include acquired goodwill.
If the group’s share of losses in a joint venture equals or exceeds its investment in the joint venture, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture.
Unrealised gains arising from transactions with joint ventures are eliminated to the extent of the group’s interest in the entity.
1.4
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.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 21 -
1.5
Turnover
Turnover is
measured
at the fair value of the consideration received or receivable
and represents amounts receivable
for goods
and hire of goods
provided in the normal course of business,
net of discounts and VAT.
Turnover is recognised when the significant risks and rewards of ownership have passed to the customer. This is normally upon dispatch of the goods to the customer.
Turnover from the hire of equipment is recognised equally over the period of hire.
1.6
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of
a
business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.7
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
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
15% per annum on cost
Patents & licences
20% per annum on cost
Website costs
20% per annum on cost
1.8
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 of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% per annum on cost
Leasehold property and improvements
2-10% per annum on cost
Plant and machinery
10-25% per annum on reducing balance
Fixtures, fittings and equipment
15% per annum on reducing balance
Computers
15-25% per annum on reducing balance
Motor vehicles
25% per annum on reducing balance
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 recognised in the
profit and loss account
.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 22 -
1.9
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company
financial statements,
investments in subsidiaries
are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Refer to note 1.2 to the financial statements for greater detail over the initial measurement of cost.
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
Entities in which the
group
has a long term interest and shares control under a contractual arrangement are classified as
joint ventures.
In the
parent c
ompany
financial statements,
investments in
joint ventures
are accounted for at cost less impairment.
1.10
Impairment of fixed assets
At each reporting
period
end date, the
group
reviews the carrying amounts of its tangible
and intangible
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). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
1.11
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 are measured using the first in first out method of accounting.
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.
1.12
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.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 23 -
1.13
Financial instruments
The group 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 group's
balance sheet
when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
All of the group's financial assets are basic financial instruments.
Impairment of financial assets
Financial assets 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 group 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 group after deducting all of its liabilities.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 24 -
Basic financial liabilities
Basic financial liabilities, including
creditors and
bank loans, are initially recognised at transaction price.
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. Trade creditors are recognised initially at transaction price.
Other financial liabilities
All of the group's financial liabilities are basic financial instruments.
Derecognition of financial liabilities
Financial liabilities are derecognised when the
group's contractual obligations expire or are discharged or cancelled.
1.14
Equity instruments
Equity instruments issued by the group 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 group.
1.15
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
group’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
if, and only if, there is
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.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 25 -
1.16
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
group
is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
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
d
asset are consumed.
1.19
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.
1.20
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.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Fixed asset investments and goodwill
In recent financial periods, the group and company have acquired subsidiary entities and a joint venture, where each acquisition was recognised at cost. The investments are reviewed annually for impairment via a review of the investment's projected trading and cash flow. No impairment is recognised as future trading and cash flow forecasts demonstrate the investments are expected to generate sufficient profits to underpin the carrying value in the accounts.
The same considerations and principles abound when considering the goodwill recognised on consolidation in respect of the group's relevant business combination transactions.
Stock
The group carries a large range of stock lines and has a broad customer base. Stock is reviewed annually for obsolescence and physical cycle counts are carried out regularly, with a further full physical count completed at the balance sheet date. The group is satisfied that its stock management procedures are appropriate and further stock impairment provisions are not necessary.
Trade debtors
The group has a broad customer base, robust credit control procedures and historically very low levels of bad debt. The group is satisfied that a bad debt provision is not required.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Attributable to the group's principal activities
48,014,856
38,392,353
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
48,014,856
38,392,353
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
3
Turnover and other revenue
(Continued)
- 27 -
2021
2020
£
£
Other revenue
Interest income
1
294,331
Dividends received
49,098
-
Grants received
176,749
1,271,235
4
Exceptional item
2021
2020
£
£
Expenditure
Reorganisation costs
86,610
75,517
86,610
75,517
In the previous year, new group companies incurred one off costs related to the change in ownership and through the subsequent restructuring of staffing, professional and other associated costs. This continued into the year ended 31 December 2021, alongside additional costs related to the acquisition of the group, as referenced per note 32 to the financial statements.
5
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
23,350
(26,455)
Government grants
(176,749)
(1,271,235)
Depreciation of owned tangible fixed assets
596,152
492,321
Depreciation of tangible fixed assets held under finance leases
366,139
310,461
Profit on disposal of tangible fixed assets
(43,573)
(3,228)
Amortisation of intangible assets
1,263,484
972,802
Operating lease charges
665,450
573,210
6
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
24,208
22,000
Audit of the financial statements of the company's subsidiaries
80,019
84,553
104,227
106,553
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 28 -
7
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Administration and warehouse
309
308
16
15
Management
4
4
4
4
Total
313
312
20
19
Their aggregate remuneration comprised:
Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
10,048,851
9,521,731
1,095,440
1,039,850
Social security costs
1,032,428
870,583
141,794
100,706
Pension costs
682,785
674,433
22,326
18,252
11,764,064
11,066,747
1,259,560
1,158,808
8
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
300,546
312,700
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
225,200
225,200
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 29 -
9
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
1
Other income from investments
Gains on financial instruments measured at fair value through profit or loss
294,331
Total income excluding fixed asset investments
1
294,331
Income from fixed asset investments
Income from shares in group undertakings
49,098
Total income
49,099
294,331
Investment income includes the following:
Interest on financial assets measured at fair value through profit or loss
294,331
10
Interest payable and similar expenses
2021
2020
£
£
Interest on bank facilities
76,079
70,086
Dividends on preference shares not classified as equity
382,935
298,500
Other interest on financial liabilities
33,395
-
Interest on finance leases and hire purchase contracts
86,834
65,511
Other interest
193,354
107,767
Total finance costs
772,597
541,864
11
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
677,679
515,175
Adjustments in respect of prior periods
(121,544)
(57,533)
Total current tax
556,135
457,642
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
11
Taxation
2021
2020
£
£
(Continued)
- 30 -
Deferred tax
Origination and reversal of timing differences
145,017
115,518
Changes in tax rates
208,560
38,304
Adjustment in respect of prior periods
(5,715)
(9,965)
Total deferred tax
347,862
143,857
Total tax charge
903,997
601,499
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
4,091,638
1,927,922
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
777,411
366,305
Tax effect of expenses that are not deductible in determining taxable profit
83,667
127,449
Tax effect of income not taxable in determining taxable profit
(71,383)
Change in unrecognised deferred tax assets
(37,702)
(51,771)
Effect of change in corporation tax rate
208,560
38,304
Permanent capital allowances in excess of depreciation
(63,128)
Depreciation on assets not qualifying for tax allowances
10,855
9,726
Amortisation on assets not qualifying for tax allowances
229,620
178,984
Research and development tax credit
(97,315)
Under/(over) provided in prior years
(121,544)
(57,533)
Deferred tax adjustments in respect of prior years
(5,715)
(9,965)
Dividend income
(9,329)
-
Taxation charge
903,997
601,499
The Chancellor stated his intention to maintain the main rate of corporation tax at 19%. This change to previously announced policy was substantively enacted on 17 March 2020. The Chancellor subsequently announced his intention to increase the headline rate of corporation tax to 25% from 1 April 2023, this policy was substantively enacted on 25 May 2021.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 31 -
12
Dividends
2021
2020
Recognised as distributions to equity holders:
£
£
Final paid
1,001,989
559,633
13
Intangible fixed assets
Group
Goodwill
Computer software
Patents & licences
Website costs
Total
£
£
£
£
£
Cost
At 1 January 2021
9,714,203
241,069
15,151
10,358
9,980,781
Additions - separately acquired
33,348
18,949
1,248
53,545
Additions - business combinations
3,147,009
3,147,009
At 31 December 2021
12,894,560
241,069
34,100
11,606
13,181,335
Amortisation and impairment
At 1 January 2021
2,256,728
29,949
10,839
1,887
2,299,403
Amortisation charged for the year
1,224,984
30,759
5,003
2,738
1,263,484
At 31 December 2021
3,481,712
60,708
15,842
4,625
3,562,887
Carrying amount
At 31 December 2021
9,412,848
180,361
18,258
6,981
9,618,448
At 31 December 2020
7,457,475
211,120
4,312
8,471
7,681,378
Company
Computer software
£
Cost
At 1 January 2021 and 31 December 2021
239,890
Amortisation and impairment
At 1 January 2021
28,770
Amortisation charged for the year
30,759
At 31 December 2021
59,529
Carrying amount
At 31 December 2021
180,361
At 31 December 2020
211,120
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 32 -
14
Tangible fixed assets
Group
Freehold land and buildings
Leasehold property and improvements
Plant and machinery
Fixtures, fittings and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2021
1,599,641
1,321,241
2,117,964
575,036
54,388
1,673,717
7,341,987
Additions
40,222
504,702
706,262
95,118
1,375,443
2,721,747
Disposals
(217,452)
(60,510)
(717,320)
(995,282)
At 31 December 2021
1,599,641
1,361,463
2,405,214
1,220,788
149,506
2,331,840
9,068,452
Depreciation and impairment
At 1 January 2021
59,096
171,861
605,160
128,496
27,362
299,056
1,291,031
Depreciation charged in the year
36,763
49,695
283,383
102,469
17,555
472,426
962,291
Eliminated in respect of disposals
(73,620)
(43,887)
(429,805)
(547,312)
At 31 December 2021
95,859
221,556
814,923
187,078
44,917
341,677
1,706,010
Carrying amount
At 31 December 2021
1,503,782
1,139,907
1,590,291
1,033,710
104,589
1,990,163
7,362,442
At 31 December 2020
1,540,545
1,149,380
1,512,804
446,540
27,026
1,374,661
6,050,956
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 33 -
Company
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 January 2021
83,180
82,510
165,690
Additions
634,398
307,526
941,924
Disposals
(61,518)
(61,518)
At 31 December 2021
717,578
328,518
1,046,096
Depreciation and impairment
At 1 January 2021
36,872
15,383
52,255
Depreciation charged in the year
23,361
59,309
82,670
Eliminated in respect of disposals
(20,179)
(20,179)
At 31 December 2021
60,233
54,513
114,746
Carrying amount
At 31 December 2021
657,345
274,005
931,350
At 31 December 2020
46,308
67,127
113,435
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2021
2020
2021
2020
£
£
£
£
Plant and machinery
478,250
467,565
Fixtures, fittings and equipment
535,680
16,458
535,680
16,458
Motor vehicles
1,225,017
827,049
241,519
19,697
2,238,947
1,311,072
777,199
36,155
15
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in subsidiaries
16
15,171,754
11,228,950
Investments in joint ventures
17
1,750,923
1,375,221
1,497,739
1,497,739
1,750,923
1,375,221
16,669,493
12,726,689
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
15
Fixed asset investments
(Continued)
- 34 -
Movements in fixed asset investments
Group
Shares in joint ventures
£
Cost or valuation
At 1 January 2021
1,375,221
Share of profits in year
375,702
At 31 December 2021
1,750,923
Carrying amount
At 31 December 2021
1,750,923
At 31 December 2020
1,375,221
Movements in fixed asset investments
Company
Shares in subsidiaries and joint ventures
£
Cost or valuation
At 1 January 2021
12,726,689
Additions
3,942,804
At 31 December 2021
16,669,493
Carrying amount
At 31 December 2021
16,669,493
At 31 December 2020
12,726,689
16
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
16
Subsidiaries
(Continued)
- 35 -
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Century Hose Limited
1
Import, sale and distribution of industrial and hydraulic hose
Ordinary
30.00
70.00
Flexicon Industrial Supplies Limited
1
Manufacture, sale and distribution of industrial hose assemblies and fittings
Ordinary
0
100.00
Industrial Hose & Pipe Fittings Limited
1
Manufacture and supply of hose fittings and turned parts
Ordinary
0
100.00
Integraflex Ltd
1
Manufacture, sale and distribution of industrial hose asssemblies and fittings
Ordinary
0
100.00
Millennium Coupling Company Ltd
1
Import, sale and distribution of hose couplings
Ordinary
100.00
-
Millennium Engineering (2012) Ltd
1
Bespoke manufacture, design and supply of industrial and hydraulic hose couplings
Ordinary
0
100.00
One Stop Sealing Limited
1
Manufacture, sale and distribution of sealants and hose assemblies
Ordianry
100.00
-
Northern Hose & Hydraulics Limited
1
Dormant
Ordinary
100.00
-
Fluid Power Products Limited
1
Dormant
Ordinary
100.00
-
R&G Investments Limited
1
Property holding company
Ordinary
100.00
-
Pneumatic Services Limited
1
Holding company
Ordinary
90.00
-
Pennine Pneumatic Services Limited
1
Supply of specialist compressed air equipment and services
Ordinary
0
90.00
Hyphose Limited
1
Manufacture and distributino of hose assemblies and related products
Ordinary
100.00
-
Pearson Hose & Hydraulics Limited
1
Supply of flexible hose products
Ordinary
100.00
-
Hose & Hydraulics Group Limited
1
Holding company
Ordinary
100.00
-
Pressurelines Hose & Hydraulics Limited
1
Supply of flexible hose products
Ordinary
0
100.00
Exeter Hose & Hydraulics Limited
1
Supply of flexible hose products
Ordinary
0
100.00
North Devon Hose & Hydraulics Limited
1
Supply of flexible hose products
Ordinary
0
100.00
Somerset Hose & Hydraulics Limited
1
Supply of flexible hose products
Ordinary
0
100.00
West Cornwall Hose & Hydraulics Limited
1
Supply of flexible hose products
Ordinary
0
100.00
Henry Gallacher Limited
1
Provision of fast emergency gasket cutting services
Ordinary
100.00
-
Intrico Products Limited
1
Trade had ceased prior to balance sheet date
Ordinary
0
100.00
Pearson Hydraulics Limited
1
Design and distribution of hydraulic components
Ordinary
100.00
-
Rubberfast Limited
1
Merchants of rubber and associated products
Ordinary
100.00
-
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
16
Subsidiaries
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
(Continued)
- 36 -
Grimsby Hydraulic Services Limited
1
Supply of flexible hose products
Ordinary
100.00
-
Global Hydraulic Services Limited
1
Dormant
Ordinary
0
100.00
GHS Limited
1
Dormant
Ordinary
0
100.00
Fluidair Power Limited
1
Trade had ceased prior to balance sheet date
Ordinary
0
100.00
Norman Walker (Machinery) Limited
1
Installation of industrial machinery and equipment
Ordinary
0
90.00
Compcon Limited
1
Repair of machinery
Ordinary
0
90.00
Registered office addresses (all UK unless otherwise indicated):
1
10 - 11 Charterhouse Square, London, EC1M 6EE
17
Joint ventures
Details of joint ventures at 31 December 2021 are as follows:
Name of undertaking
Registered office
Nature of business
Interest
% Held
held
Direct
Merseyflex Limited
1
Import, sale and distribution of industrial hose and fittings
Ordinary
50.00
Registered office key:
1 10 - 11 Charterhouse Square, London, EC1M 6EE
18
Stocks
Group
Company
2021
2020
2021
2020
£
£
£
£
Work in progress
204,641
92,782
-
-
Finished goods and goods for resale
10,239,686
8,772,367
10,444,327
8,865,149
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 37 -
19
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
8,242,786
6,377,865
319,703
327,377
Amounts owed by group undertakings
-
-
5,751,436
5,814,652
Other debtors
200,328
176,886
82,135
70,986
Prepayments and accrued income
832,797
922,638
41,165
90,690
9,275,911
7,477,389
6,194,439
6,303,705
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
208,910
333,910
Total debtors
9,275,911
7,477,389
6,403,349
6,637,615
20
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans and overdrafts
22
2,949,476
1,975,855
649,374
1,037,714
Obligations under finance leases
23
592,457
392,954
216,478
28,677
Other borrowings
22
410,703
311,500
181,500
181,500
Trade creditors
5,250,610
4,982,003
63,620
68,792
Amounts owed to group undertakings
4,677,561
3,702,470
Corporation tax payable
732,911
568,028
Other taxation and social security
1,306,805
1,172,991
116,062
130,385
Other creditors
3,286,187
1,274,448
2,308,163
561,802
Accruals and deferred income
745,081
730,189
128,369
29,963
15,274,230
11,407,968
8,341,127
5,741,303
Finance lease obligations are secured over the assets to which they relate.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 38 -
21
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans and overdrafts
22
3,687,030
4,221,110
2,288,091
2,655,669
Obligations under finance leases
23
1,302,796
896,361
432,266
27,057
Other borrowings
22
11,430,322
8,850,822
10,496,822
8,428,322
Other creditors
1,338,317
1,617,364
978,067
1,246,864
17,758,465
15,585,657
14,195,246
12,357,912
Finance lease obligations are secured over the assets to which they relate.
22
Loans and overdrafts
Group
Company
2021
2020
2021
2020
£
£
£
£
Bank loans
4,475,263
5,062,421
2,937,465
3,380,669
Bank overdrafts
2,161,243
1,134,544
312,714
Preference shares
7,300,000
5,750,000
7,300,000
5,750,000
Other loans
4,541,025
3,412,322
3,378,322
2,859,822
18,477,531
15,359,287
13,615,787
12,303,205
Payable within one year
3,360,179
2,287,355
830,874
1,219,214
Payable after one year
15,117,352
13,071,932
12,784,913
11,083,991
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
22
Loans and overdrafts
(Continued)
- 39 -
As disclosed in note 32 to the financial statements and subsequent to the post year end acquisition of the group, funds were made available such that the group could redeem bank loan and overdraft balances owed to its long-standing banking partner. As the acquisition was not certain at the balance sheet date, all debt is presented in line with contractual payment phasing.
Bank loan and overdraft balances are secured by a debenture, incorporating a fixed and floating charge over the current and future assets of all group companies, along with a first charge over the group’s freehold land and buildings. Bank loans attract interest charged at 3% and 4% over base rate respectively.
Invoice finance facilities, stated within bank overdrafts, are secured over the trade debtor books of the relevant group companies.
Preference shares with a nominal value of £1,355,555 are redeemable in certain circumstances, after due notice is serviced and observed. The remaining preference shares, with a nominal value of £5,944,445, are non-redeemable. The holders of all preference shares are entitled to receive fixed dividends equating to 6% of par value. Accordingly all preference shares are classified as debt within the financial statements. The preference share do not carry any voting rights and upon wind up or capital distribution, rights are limited to par plus dividend arrears.
Other loans are repayable in a number of tranches. Firstly, in quarterly instalments of £32,500 with interest charged at 3% above base rate per annum. Secondly, in quarterly instalments of £45,375, with no interest levied. Thirdly, in annual instalments of £250,000, commencing in March 2025, with no interest levied. Finally, a total of £741,000 in tranches of differing values over the period to 1 November 2029, with interest charged at a fixed rate of 6% per annum.
23
Finance lease obligations
Group
Company
2021
2020
2021
2020
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
650,365
450,453
223,009
32,117
In two to five years
1,392,861
982,079
447,544
27,871
2,043,226
1,432,532
670,553
59,988
Less: future finance charges
(147,973)
(143,217)
(21,809)
(4,254)
1,895,253
1,289,315
648,744
55,734
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is up to 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 40 -
24
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2021
2020
Group
£
£
Accelerated capital allowances
944,215
606,740
Tax losses
(123,695)
(162,175)
Revaluations
55,015
41,811
Short term timing differences
(6,544)
(2,822)
868,991
483,554
Liabilities
Liabilities
2021
2020
Company
£
£
Accelerated capital allowances
194,590
54,192
Tax losses
(18,578)
(14,119)
176,012
40,073
Group
Company
2021
2021
Movements in the year:
£
£
Liability at 1 January 2021
483,554
40,073
Charge to profit or loss
144,582
93,696
Effect of change in tax rate - profit or loss
208,560
42,243
Other
32,295
-
Liability at 31 December 2021
868,991
176,012
It is not possible to quantify the amounts expected to reverse over the upcoming twelve months owing to uncertainties over the group's expected profit and its capital expenditure programme for the next financial year.
25
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
682,785
674,433
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
25
Retirement benefit schemes
(Continued)
- 41 -
A
defined contribution pension scheme
is operated
for all qualifying employees.
The assets of the scheme are held separately from those of the group in an independently administered fund.
26
Share capital
Group and company
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
500
500
500
500
Ordinary B shares of £1 each
250
250
250
250
Ordinary C shares of £1 each
250
250
250
250
Ordinary D shares of £1 each
5
5
5
5
Ordinary E shares of £1 each
5
5
5
5
Ordinary F shares of £1 each
45
45
45
45
Ordinary G shares of £1 each
23
23
23
23
Ordinary H shares of £1 each
22
22
22
22
1,100
1,100
1,100
1,100
Ordinary B shares entitle the holder to veto any of the following:
-
the company arranging finance or borrowings in excess of £100,000;
-
the dilution of shareholdings, or alteration of rights attached to any of the existing classes of shares in the company;
-
the employment of key individuals involved in the management of the company or its subsidiaries.
Upon wind-up or in the event of a full or partial share disposal, any fair value shall be attributed as follows:
-
the first tranche exclusively to the holders of the £1 Ordinary B and C holders;
-
the next tranche equally to the holders of the £1 Ordinary A, B and C holders;
-
any value over and above the combined amounts covered by the above, shall be attributed to the holders of the £1 Ordinary D, E, F, G and H pro rata to the number of shares held by each party.
Other than as noted above, each class of shares ranks pari passu.
27
Reserves
Other reserves
Other reserves consist solely of a merger reserve. This was recognised to reflect the fair value of the net assets acquired within a business combination transaction during a previous accounting period.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 42 -
28
Acquisition of a business
On 23 February 2021, a group company acquired 100% of the issued capital of Norman Walker (Machinery) Limited. On 7 September 2021, a group company acquired 100% of the issued capital of Compcon Limited. The ultimate equity holders' indirect interest in both is 90%.
On 26 February 2021, the group acquired a further 22.5% of the issued capital of Pneumatic Services Limited from a non-controlling equity holder, taking its total interest in the company to 90%. On 1 March 2021, the group acquired the remaining 22.39% of the issued capital of Pearson Hydraulics Limited, taking its interest in the company to 100%. On 1 April 2021, the group acquired the remaining 30% of the issued capital of Century Hose Limited, taking its interest in the company to 100%.
Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Intangible assets
7,860
-
7,860
Property, plant and equipment
182,710
-
182,710
Inventories
116,571
-
116,571
Trade and other receivables
398,544
-
398,544
Cash and cash equivalents
622,660
-
622,660
Trade and other payables
(387,047)
-
(387,047)
Tax liabilities
(125,272)
-
(125,272)
Deferred tax
(38,008)
-
(38,008)
Total identifiable net assets
778,018
-
778,018
Non-controlling interests
1,792,896
Goodwill
3,147,009
Total consideration
5,717,923
The consideration was satisfied by:
£
Cash
1,602,093
Deferred consideration
1,774,830
Loan notes
2,341,000
5,717,923
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
1,175,254
Profit after tax
42,945
The non-controlling interest balance above relates to an addition of £77,802 on the two new subsidiaries acquired during the year and a reduction of £1,870,698 following the purchase of further minority shareholdings from non-controlling interests.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 43 -
29
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2021
2020
2021
2020
£
£
£
£
Within one year
536,883
530,096
-
-
Between two and five years
771,698
874,876
-
-
In over five years
112,200
133,500
-
-
1,420,781
1,538,472
-
-
30
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2021
2020
£
£
Aggregate compensation
338,367
351,609
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2021
2020
2021
2020
£
£
£
£
Group
Entities over which the group has control, joint control or significant influence
1,459,895
861,173
595,244
645,955
Company
Entities over which the company has control, joint control or significant influence
166,000
443,522
15,738
89,416
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
30
Related party transactions
(Continued)
- 44 -
Services provided
Interest charged
2021
2020
2021
2020
£
£
£
£
Group
Key management personnel
383,200
510,852
33,614
79,324
Other related parties
-
-
382,935
298,500
Company
Key management personnel
203,025
210,964
33,614
79,324
Other related parties
-
-
382,935
298,500
The group was paid dividends totalling £49,098 (2020: £Nil) and the company was paid dividends totalling £308,161 (2020: £636,250) by entities over the which the entity has control, joint control or significant influence.
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2021
2020
£
£
Group
Entities over which the group has control, joint control or significant influence
114,376
124,532
Key management personnel
577,119
2,509,851
Other related parties
7,300,000
5,759,845
Company
Entities over which the company has control, joint control or significant influence
14,477
763,654
Key management personnel
577,119
2,509,851
Other related parties
7,300,000
5,750,000
The following amounts were outstanding at the reporting end date:
Amounts due from related parties
2021
2020
Balance
Balance
£
£
Group
Entities over which the group has control, joint control or significant influence
656,048
150,809
Key management personnel
-
751
Other related parties
23,244
-
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
30
Related party transactions
(Continued)
- 45 -
Company
Entities over which the company has control, joint control or significant influence
2,919,336
2,549,836
31
Directors' transactions
Dividends totalling £1,001,989 (2020 - £559,633) were paid in the year in respect of shares held by the company's directors and their close family.
32
Events after the reporting date
On 6 April 2022 the company and group 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.
Inbetween the balance sheet date and the approval of these financial statements, the company has acquired Hydraulic & Offshore Supplies Limited, Rubberlast Group Ltd, Lancashire Hose and Fittings Limited, Hydraproducts Limited, AMG (Brighouse) Limited and FPE Seals Limited. It also acquired the remaining share capital of Merseyflex Limited, which was a joint venture from a group perspective at the balance sheet date, and a further 5% in Pneumatic Services Limited.
33
Controlling party
In the opinion of the directors, at the balance sheet date Mr C F Ford was considered to be the ultimate controlling party. At the date of signing the financial statements, the immediate parent company is R&G Fluid Power Holdings Limited and the ultimate parent company is Diploma PLC. There is no single ultimate controlling party.
R&G FLUID POWER GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 46 -
34
Cash generated from group operations
2021
2020
£
£
Profit for the year after tax
3,187,641
1,326,423
Adjustments for:
Share of results of associates and joint ventures
(375,702)
308,988
Taxation charged
903,997
601,499
Finance costs
772,597
541,864
Investment income
(49,099)
(294,331)
Gain on disposal of tangible fixed assets
(43,573)
(3,228)
Amortisation and impairment of intangible assets
1,263,484
972,802
Depreciation and impairment of tangible fixed assets
962,291
802,782
Movements in working capital:
Increase in stocks
(1,462,607)
(275,405)
(Increase)/decrease in debtors
(1,400,729)
2,376,282
Decrease in creditors
(11,872)
(1,206,523)
Cash generated from operations
3,746,428
5,151,153
35
Analysis of changes in net debt - group
1 January 2021
Cash flows
New finance leases
31 December 2021
£
£
£
£
Cash at bank and in hand
2,632,254
(224,239)
-
2,408,015
Bank overdrafts
(1,134,544)
(1,026,699)
-
(2,161,243)
1,497,710
(1,250,938)
-
246,772
Borrowings excluding overdrafts
(14,224,743)
(2,091,545)
-
(16,316,288)
Obligations under finance leases
(1,289,315)
704,821
(1,310,759)
(1,895,253)
(14,016,348)
(2,637,662)
(1,310,759)
(17,964,769)
2021-12-31
2021-01-01
false
CCH Software
CCH Accounts Production 2022.200
Mr C F Ford
Mr G Dallimore
Mr R J Davies
Mr B K Scowcroft
Ms B Gibbes
Mr J Morrison
10404128
bus:Consolidated
2021-01-01
2021-12-31
10404128
2021-01-01
2021-12-31
10404128
bus:Director3
2021-01-01
2021-12-31
10404128
bus:Director5
2021-01-01
2021-12-31
10404128
bus:CompanySecretary1
2021-01-01
2021-12-31
10404128
bus:Director1
2021-01-01
2021-12-31
10404128
bus:Director2
2021-01-01
2021-12-31
10404128
bus:Director4
2021-01-01
2021-12-31
10404128
bus:RegisteredOffice
2021-01-01
2021-12-31
10404128
2021-12-31
10404128
bus:Consolidated
2021-12-31
10404128
bus:Consolidated
2020-01-01
2020-12-31
10404128
core:Exceptional
bus:Consolidated
1
2021-01-01
2021-12-31
10404128
core:Exceptional
bus:Consolidated
1
2020-01-01
2020-12-31
10404128
2020-01-01
2020-12-31
10404128
core:Goodwill
bus:Consolidated
2021-12-31
10404128
core:Goodwill
bus:Consolidated
2020-12-31
10404128
core:OtherResidualIntangibleAssets
bus:Consolidated
2021-12-31
10404128
core:OtherResidualIntangibleAssets
bus:Consolidated
2020-12-31
10404128
core:OtherResidualIntangibleAssets
2021-12-31
10404128
core:OtherResidualIntangibleAssets
2020-12-31
10404128
core:ComputerSoftware
bus:Consolidated
2021-12-31
10404128
core:PatentsTrademarksLicencesConcessionsSimilar
bus:Consolidated
2021-12-31
10404128
core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill
bus:Consolidated
2021-12-31
10404128
core:ComputerSoftware
bus:Consolidated
2020-12-31
10404128
core:PatentsTrademarksLicencesConcessionsSimilar
bus:Consolidated
2020-12-31
10404128
core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill
bus:Consolidated
2020-12-31
10404128
bus:Consolidated
2020-12-31
10404128
core:ComputerSoftware
2021-12-31
10404128
core:ComputerSoftware
2020-12-31
10404128
2020-12-31
10404128
core:LandBuildings
core:OwnedOrFreeholdAssets
bus:Consolidated
2021-12-31
10404128
core:LandBuildings
core:LeasedAssetsHeldAsLessee
bus:Consolidated
2021-12-31
10404128
core:PlantMachinery
bus:Consolidated
2021-12-31
10404128
core:FurnitureFittings
bus:Consolidated
2021-12-31
10404128
core:ComputerEquipment
bus:Consolidated
2021-12-31
10404128
core:MotorVehicles
bus:Consolidated
2021-12-31
10404128
core:LandBuildings
core:OwnedOrFreeholdAssets
bus:Consolidated
2020-12-31
10404128
core:LandBuildings
core:LeasedAssetsHeldAsLessee
bus:Consolidated
2020-12-31
10404128
core:PlantMachinery
bus:Consolidated
2020-12-31
10404128
core:FurnitureFittings
bus:Consolidated
2020-12-31
10404128
core:ComputerEquipment
bus:Consolidated
2020-12-31
10404128
core:MotorVehicles
bus:Consolidated
2020-12-31
10404128
core:FurnitureFittings
2021-12-31
10404128
core:MotorVehicles
2021-12-31
10404128
core:FurnitureFittings
2020-12-31
10404128
core:MotorVehicles
2020-12-31
10404128
core:ShareCapital
bus:Consolidated
2021-12-31
10404128
core:ShareCapital
bus:Consolidated
2020-12-31
10404128
core:OtherMiscellaneousReserve
bus:Consolidated
2021-12-31
10404128
core:OtherMiscellaneousReserve
bus:Consolidated
2020-12-31
10404128
core:ShareCapital
2021-12-31
10404128
core:ShareCapital
2020-12-31
10404128
bus:Consolidated
2019-12-31
10404128
core:Goodwill
2021-01-01
2021-12-31
10404128
core:IntangibleAssetsOtherThanGoodwill
2021-01-01
2021-12-31
10404128
core:ComputerSoftware
2021-01-01
2021-12-31
10404128
core:PatentsTrademarksLicencesConcessionsSimilar
2021-01-01
2021-12-31
10404128
core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill
2021-01-01
2021-12-31
10404128
core:LandBuildings
core:OwnedOrFreeholdAssets
2021-01-01
2021-12-31
10404128
core:LandBuildings
core:LongLeaseholdAssets
2021-01-01
2021-12-31
10404128
core:PlantMachinery
2021-01-01
2021-12-31
10404128
core:FurnitureFittings
2021-01-01
2021-12-31
10404128
core:ComputerEquipment
2021-01-01
2021-12-31
10404128
core:MotorVehicles
2021-01-01
2021-12-31
10404128
core:UKTax
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:UKTax
bus:Consolidated
2020-01-01
2020-12-31
10404128
bus:Consolidated
1
2021-01-01
2021-12-31
10404128
bus:Consolidated
1
2020-01-01
2020-12-31
10404128
bus:Consolidated
2
2021-01-01
2021-12-31
10404128
bus:Consolidated
2
2020-01-01
2020-12-31
10404128
core:Goodwill
bus:Consolidated
2020-12-31
10404128
core:ComputerSoftware
bus:Consolidated
2020-12-31
10404128
core:PatentsTrademarksLicencesConcessionsSimilar
bus:Consolidated
2020-12-31
10404128
core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill
bus:Consolidated
2020-12-31
10404128
bus:Consolidated
2020-12-31
10404128
core:ComputerSoftware
2020-12-31
10404128
core:Goodwill
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:ComputerSoftware
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:PatentsTrademarksLicencesConcessionsSimilar
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:Goodwill
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:ComputerSoftware
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:PatentsTrademarksLicencesConcessionsSimilar
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:LandBuildings
core:OwnedOrFreeholdAssets
bus:Consolidated
2020-12-31
10404128
core:LandBuildings
core:LeasedAssetsHeldAsLessee
bus:Consolidated
2020-12-31
10404128
core:PlantMachinery
bus:Consolidated
2020-12-31
10404128
core:FurnitureFittings
bus:Consolidated
2020-12-31
10404128
core:ComputerEquipment
bus:Consolidated
2020-12-31
10404128
core:MotorVehicles
bus:Consolidated
2020-12-31
10404128
core:FurnitureFittings
2020-12-31
10404128
core:MotorVehicles
2020-12-31
10404128
2020-12-31
10404128
core:LandBuildings
core:OwnedOrFreeholdAssets
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:LandBuildings
core:LeasedAssetsHeldAsLessee
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:PlantMachinery
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:FurnitureFittings
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:ComputerEquipment
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:MotorVehicles
bus:Consolidated
2021-01-01
2021-12-31
10404128
core:PlantMachinery
2021-12-31
10404128
core:PlantMachinery
2020-12-31
10404128
core:Subsidiary1
2021-01-01
2021-12-31
10404128
core:Subsidiary2
2021-01-01
2021-12-31
10404128
core:Subsidiary3
2021-01-01
2021-12-31
10404128
core:Subsidiary4
2021-01-01
2021-12-31
10404128
core:Subsidiary5
2021-01-01
2021-12-31
10404128
core:Subsidiary6
2021-01-01
2021-12-31
10404128
core:Subsidiary7
2021-01-01
2021-12-31
10404128
core:Subsidiary8
2021-01-01
2021-12-31
10404128
core:Subsidiary9
2021-01-01
2021-12-31
10404128
core:Subsidiary10
2021-01-01
2021-12-31
10404128
core:Subsidiary11
2021-01-01
2021-12-31
10404128
core:Subsidiary12
2021-01-01
2021-12-31
10404128
core:Subsidiary13
2021-01-01
2021-12-31
10404128
core:Subsidiary14
2021-01-01
2021-12-31
10404128
core:Subsidiary15
2021-01-01
2021-12-31
10404128
core:Subsidiary16
2021-01-01
2021-12-31
10404128
core:Subsidiary17
2021-01-01
2021-12-31
10404128
core:Subsidiary18
2021-01-01
2021-12-31
10404128
core:Subsidiary19
2021-01-01
2021-12-31
10404128
core:Subsidiary20
2021-01-01
2021-12-31
10404128
core:Subsidiary21
2021-01-01
2021-12-31
10404128
core:Subsidiary22
2021-01-01
2021-12-31
10404128
core:Subsidiary23
2021-01-01
2021-12-31
10404128
core:Subsidiary24
2021-01-01
2021-12-31
10404128
core:Subsidiary25
2021-01-01
2021-12-31
10404128
core:Subsidiary26
2021-01-01
2021-12-31
10404128
core:Subsidiary27
2021-01-01
2021-12-31
10404128
core:Subsidiary28
2021-01-01
2021-12-31
10404128
core:Subsidiary29
2021-01-01
2021-12-31
10404128
core:Subsidiary30
2021-01-01
2021-12-31
10404128
core:Subsidiary1
1
2021-01-01
2021-12-31
10404128
core:Subsidiary2
2
2021-01-01
2021-12-31
10404128
core:Subsidiary3
3
2021-01-01
2021-12-31
10404128
core:Subsidiary4
4
2021-01-01
2021-12-31
10404128
core:Subsidiary5
5
2021-01-01
2021-12-31
10404128
core:Subsidiary6
6
2021-01-01
2021-12-31
10404128
core:Subsidiary7
7
2021-01-01
2021-12-31
10404128
core:Subsidiary8
8
2021-01-01
2021-12-31
10404128
core:Subsidiary9
9
2021-01-01
2021-12-31
10404128
core:Subsidiary10
10
2021-01-01
2021-12-31
10404128
core:Subsidiary11
11
2021-01-01
2021-12-31
10404128
core:Subsidiary12
12
2021-01-01
2021-12-31
10404128
core:Subsidiary13
13
2021-01-01
2021-12-31
10404128
core:Subsidiary14
14
2021-01-01
2021-12-31
10404128
core:Subsidiary15
15
2021-01-01
2021-12-31
10404128
core:Subsidiary16
16
2021-01-01
2021-12-31
10404128
core:Subsidiary17
17
2021-01-01
2021-12-31
10404128
core:Subsidiary18
18
2021-01-01
2021-12-31
10404128
core:Subsidiary19
19
2021-01-01
2021-12-31
10404128
core:Subsidiary20
20
2021-01-01
2021-12-31
10404128
core:Subsidiary21
21
2021-01-01
2021-12-31
10404128
core:Subsidiary22
22
2021-01-01
2021-12-31
10404128
core:Subsidiary23
23
2021-01-01
2021-12-31
10404128
core:Subsidiary24
24
2021-01-01
2021-12-31
10404128
core:Subsidiary25
25
2021-01-01
2021-12-31
10404128
core:Subsidiary26
26
2021-01-01
2021-12-31
10404128
core:Subsidiary27
27
2021-01-01
2021-12-31
10404128
core:Subsidiary28
28
2021-01-01
2021-12-31
10404128
core:Subsidiary29
29
2021-01-01
2021-12-31
10404128
core:Subsidiary30
30
2021-01-01
2021-12-31
10404128
core:JointVenture1
2021-01-01
2021-12-31
10404128
core:JointVenture1
1
2021-01-01
2021-12-31
10404128
core:CurrentFinancialInstruments
2021-12-31
10404128
core:CurrentFinancialInstruments
2020-12-31
10404128
core:CurrentFinancialInstruments
bus:Consolidated
2021-12-31
10404128
core:CurrentFinancialInstruments
bus:Consolidated
2020-12-31
10404128
core:WithinOneYear
bus:Consolidated
2021-12-31
10404128
core:WithinOneYear
bus:Consolidated
2020-12-31
10404128
core:CurrentFinancialInstruments
core:WithinOneYear
2021-12-31
10404128
core:CurrentFinancialInstruments
core:WithinOneYear
2020-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
bus:Consolidated
2021-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
bus:Consolidated
2020-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
2021-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
2020-12-31
10404128
core:Non-currentFinancialInstruments
bus:Consolidated
2021-12-31
10404128
core:Non-currentFinancialInstruments
bus:Consolidated
2020-12-31
10404128
core:Non-currentFinancialInstruments
2021-12-31
10404128
core:Non-currentFinancialInstruments
2020-12-31
10404128
core:CurrentFinancialInstruments
core:WithinOneYear
bus:Consolidated
2021-12-31
10404128
core:CurrentFinancialInstruments
core:WithinOneYear
bus:Consolidated
2020-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
bus:Consolidated
1
2021-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
bus:Consolidated
1
2020-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
2
2021-12-31
10404128
core:Non-currentFinancialInstruments
core:AfterOneYear
2
2020-12-31
10404128
core:WithinOneYear
2021-12-31
10404128
core:WithinOneYear
2020-12-31
10404128
core:BetweenTwoFiveYears
bus:Consolidated
2021-12-31
10404128
core:BetweenTwoFiveYears
bus:Consolidated
2020-12-31
10404128
core:BetweenTwoFiveYears
2021-12-31
10404128
core:BetweenTwoFiveYears
2020-12-31
10404128
bus:PrivateLimitedCompanyLtd
2021-01-01
2021-12-31
10404128
bus:FRS102
2021-01-01
2021-12-31
10404128
bus:Audited
2021-01-01
2021-12-31
10404128
bus:ConsolidatedGroupCompanyAccounts
2021-01-01
2021-12-31
10404128
bus:FullAccounts
2021-01-01
2021-12-31
xbrli:pure
xbrli:shares
iso4217:GBP