Gear Pump Distributors (UK) Limited
|
Registered number: |
03925336
|
Directors' Report |
|
The directors present their report and financial statements for the period ended 30 November 2017. |
A shorter period of account of 11 months has been adopted in this reporting period in order to align the company's reporting date with that of its ultimate parent company. Amounts presented in the comparative column and related notes are for the previous 12 month period and hence the figures are not entirely comparable. |
|
Principal activities |
The company's principal activity during the period continued to be the wholesale distribution of hydraulic gear pumps, motors, flow dividers and related components.
|
|
Directors |
The following persons served as directors during the period: |
|
|
L Jacobs
|
|
C Amoils (appointed 1 June 2017)
|
|
G Dunford (appointed 1 June 2017)
|
|
T Dunford (appointed 1 June 2017)
|
|
K Barnard (resigned 1 June 2017)
|
|
Strategic Report |
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of business review, principal risks and future developments. |
|
Disclosure of information to auditors |
Gear Pump Distributors (UK) Limited
|
Strategic Report |
|
Review of the business |
The company increased revenues by more than 10% and strengthened its market position. |
The gross margin reduced in 2017 due to the increase in cost of goods sold primarily from the currency devaluation of Sterling against the US Dollar. |
The Key Performance Indicators used by the business are: |
|
|
|
|
|
Perfomance in 2017 |
|
Performance in 2016 |
|
|
|
|
(11 month period) |
|
(12 month period) |
|
Turnover |
£841k |
|
£756k |
Gross Profit % |
57.1% |
|
61.4% |
Net Profit Before Tax % |
25.1% |
|
21.9% |
Sales Split % (UK : Europe : Rest of World) |
32%:59%:9% |
42%:49%:9% |
|
Principal risks and uncertainties |
The company faces a number of business risks and uncertainties due to the difficult trading conditions and competition as well as economic uncertainty for the UK currency in Brexit negotiations during 2018. |
In view of this the directors are continuously looking carefully at both existing and potential new markets. |
|
Future developments |
The company envisages growth in global manufacturing output and has a positive outlook on demand for its activities. |
The focus will be kept on the continued improvement of product quality, availability and service. |
The drivers for growth will be: |
● |
Offering a diverse range of superior quality products to the industry incorporating the latest technology, |
● |
Delivering products within 24 hours to any location within the company's territory, and |
● |
Carrying out high service levels of manufacture and repair through training and retention of world-class expertise. |
|
|
This report was approved by the board on 2 July 2018 and signed on its behalf. |
|
|
|
|
|
L Jacobs |
Director |
|
|
Basis of opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
|
Conclusions relating to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
● |
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
● |
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
|
Other information |
The other information comprises the information included in the report and financial statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
We have nothing to report in this regard. |
|
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
● |
the information given in the strategic report and the directors’ report for the financial period 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. |
The comparative information presented herein as of and for the year ended 31 December 2016, derived from those unaudited financial statements, has not been audited or reviewed and accordingly we express no opinion on it. |
|
Matters on which we are required to report by exception |
Gear Pump Distributors (UK) Limited
|
Statement of Cash Flows |
for the period from 1 January 2017 to 30 November 2017
|
|
11 months to |
Year to |
30 November |
31 December |
Notes |
|
2017 |
|
2016 |
£ |
£ |
Operating activities |
Profit for the period |
171,234 |
|
132,178 |
|
Adjustments for: |
Interest receivable |
(15) |
|
(37) |
Interest payable |
44 |
|
- |
Tax on profit on ordinary activities |
40,000 |
|
33,685 |
Depreciation |
721 |
|
2,826 |
(Increase)/decrease in stocks |
(94,281) |
|
76,459 |
Increase in debtors |
(44,579) |
|
(13,124) |
Increase/(decrease) in creditors |
81,588 |
|
(94,085) |
|
|
|
154,712 |
|
137,902 |
|
Interest received |
15 |
|
37 |
Interest paid |
|
|
(44) |
|
- |
Corporation tax paid |
(33,684) |
|
(16,093) |
|
Cash generated by operating activities |
120,999 |
|
121,846 |
|
|
|
|
|
|
Investing activities |
Payments to acquire tangible fixed assets |
(1,296) |
|
- |
|
Cash used in investing activities |
(1,296) |
|
- |
|
|
|
|
|
|
Financing activities |
Equity dividends paid |
- |
|
(100,000) |
Repayment of loans from group undertakings |
(40,021) |
|
- |
|
Cash used in financing activities |
(40,021) |
|
(100,000) |
|
|
|
|
|
|
Net cash generated |
Cash generated by operating activities |
120,999 |
|
121,846 |
Cash used in investing activities |
(1,296) |
|
- |
Cash used in financing activities |
(40,021) |
|
(100,000) |
|
Net cash generated |
79,682 |
|
21,846 |
|
Cash and cash equivalents at 1 January |
252,439 |
|
230,593 |
Cash and cash equivalents at 30 November |
332,121 |
|
252,439 |
|
|
|
|
|
|
Cash and cash equivalents comprise: |
Cash at bank |
332,121 |
|
252,439 |
|
|
|
|
|
|
|
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised.
|
|
|
Debtors
|
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts.
|
|
|
Creditors
|
|
Short term creditors are measured at transaction price (which is usually the invoice price).
|
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. Current tax liabilities are not discounted.
|
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
|
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. Operating lease payments are recognised as an expense on a straight line basis over the lease term.
|
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate.
|
|
|
2 |
Analysis of turnover |
2017 |
|
2016 |
£ |
£ |
|
|
Sale of goods |
840,844 |
|
755,900 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
272,292 |
|
315,796 |
|
Europe |
497,307 |
|
366,908 |
|
Rest of world |
71,245 |
|
73,196 |
|
|
|
|
|
|
840,844 |
|
755,900 |
|
|
|
|
|
|
|
|
|
|
3 |
Operating profit |
2017 |
|
2016 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
721 |
|
2,825 |
|
Operating lease rentals - plant and machinery |
5,018 |
|
1,775 |
|
Operating lease rentals - land and buildings |
19,554 |
|
20,555 |
|
Auditors' remuneration for audit services |
2,500 |
|
- |
|
Contributions to defined benefit pension plans |
844 |
|
259 |
|
Key management personnel compensation (including directors' emoluments) |
|
47,299 |
|
48,897 |
|
Foreign currency exchange gains |
(10,987)
|
|
(56,233)
|
|
Carrying amount of stock sold |
323,146 |
|
269,867 |
|
|
|
|
|
|
|
|
|
|
4 |
Directors' emoluments |
2017 |
|
2016 |
£ |
£ |
|
|
Emoluments |
47,299 |
|
48,897 |
|
Company contributions to defined contribution pension plans |
351 |
|
117 |
|
|
|
|
|
|
47,650 |
|
49,014 |
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
2017 |
|
2016 |
Number |
Number |
|
|
Defined contribution plans |
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
5 |
Staff costs |
2017 |
|
2016 |
£ |
£ |
|
|
Wages and salaries |
144,955 |
|
163,692 |
|
Social security costs |
10,558 |
|
10,806 |
|
Other pension costs |
844 |
|
259 |
|
|
|
|
|
|
156,357 |
|
174,757 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
1 |
|
1 |
|
Development |
1 |
|
1 |
|
Manufacturing |
5 |
|
5 |
|
|
|
|
|
|
7 |
|
7 |
|
|
|
|
|
|
|
|
|
|
6 |
Interest payable |
2017 |
|
2016 |
£ |
£ |
|
|
Other interest expense |
44 |
|
- |
|
|
|
|
|
|
|
|
|
|
7 |
Taxation |
2017 |
|
2016 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
40,000 |
|
33,684 |
|
Adjustments in respect of previous periods |
- |
|
1 |
|
|
|
|
|
|
40,000 |
|
33,685 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
40,000 |
|
33,685 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2017 |
|
2016 |
£ |
£ |
|
Profit on ordinary activities before tax |
211,234 |
|
165,863 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK
|
19.27% |
|
20% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
40,705 |
|
33,173 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
106 |
|
35 |
|
(Capital allowances for period in excess of depreciation)/ depreciation in excess of capital allowances |
|
(175) |
|
476 |
|
Tax decrease from other tax effects |
(636) |
|
- |
|
Adjustments to tax charge in respect of previous periods |
- |
|
1 |
|
|
Current tax charge for period |
40,000 |
|
33,685 |
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
From 1 April 2017 the main rate of corporation tax was reduced from 20% to 19%. The UK Governement proposes to reduce the main rate of corporation tax to 17% from 1 April 2020.
|
|
|
8 |
Tangible fixed assets |
|
|
|
|
Plant and machinery |
|
Motor vehicles |
|
Total |
|
|
|
|
At cost |
|
At cost |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 January 2017 |
81,455 |
|
8,453 |
|
89,908 |
|
Additions |
1,296 |
|
- |
|
1,296 |
|
Disposals |
- |
|
(8,453) |
|
(8,453) |
|
At 30 November 2017 |
82,751 |
|
- |
|
82,751 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 January 2017 |
80,894 |
|
8,452 |
|
89,346 |
|
Charge for the period |
720 |
|
1 |
|
721 |
|
On disposals |
- |
|
(8,453) |
|
(8,453) |
|
At 30 November 2017 |
81,614 |
|
- |
|
81,614 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 30 November 2017 |
1,137 |
|
- |
|
1,137 |
|
At 31 December 2016 |
561 |
|
1 |
|
562 |
|
|
|
|
|
|
|
|
|
|
|
9 |
Stocks |
2017 |
|
2016 |
£ |
£ |
|
|
Finished goods and goods for resale |
367,364 |
|
273,083 |
|
|
|
|
|
|
|
|
|
|
10 |
Debtors |
2017 |
|
2016 |
£ |
£ |
|
|
Trade debtors |
182,485 |
|
113,534 |
|
Other debtors |
9,048 |
|
33,420 |
|
|
|
|
|
|
191,533 |
|
146,954 |
|
|
|
|
|
|
|
|
|
|
11 |
Creditors: amounts falling due within one year |
2017 |
|
2016 |
£ |
£ |
|
|
Trade creditors |
15,191 |
|
16,104 |
|
Trade amounts owed to group undertakings |
|
99,282 |
|
19,372 |
|
Corporation tax |
40,000 |
|
33,684 |
|
Other taxes and social security costs |
5,065 |
|
6,405 |
|
Other creditors |
5,576 |
|
1,645 |
|
|
|
|
|
|
165,114 |
|
77,210 |
|
|
|
|
|
|
|
|
|
|
12 |
Creditors: amounts falling due after one year |
2017 |
|
2016 |
£ |
£ |
|
|
Loan amounts owed to group undertakings |
|
- |
|
40,021 |
|
|
|
|
|
|
|
|
|
|
13 |
Share capital |
Nominal |
|
2017 |
|
2017 |
|
2016 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares
|
£1 each |
|
10 |
|
10 |
|
10 |
|
|
|
|
|
|
|
|
|
|
The Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights. They do not confer any rights of redemption. |
|
|
14 |
Profit and loss account |
2017 |
|
2016 |
£ |
£ |
|
|
At 1 January |
555,797 |
|
523,619 |
|
Profit for the period |
171,234 |
|
132,178 |
|
Dividends |
- |
|
(100,000) |
|
|
At 30 November |
727,031 |
|
555,797 |
|
|
|
|
|
|
|
|
|
|
15 |
Dividends |
2017 |
|
2016 |
£ |
£ |
|
|
Dividends on ordinary shares (note 14) |
- |
|
100,000 |
|
|
|
|
|
|
|
|
|
|
16 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
17,032 |
|
10,401 |
|
5,278 |
|
4,323 |
|
within two to five years |
45,173 |
|
- |
|
3,479 |
|
- |
|
|
62,205 |
|
10,401 |
|
8,757 |
|
4,323 |
|
|
|
|
|
|
|
|
|
|
17 |
Related party transactions |
|
|
The company has taken advantage of the exemption provisions under paragraph 33.1A of FRS102 from disclosing transactions with wholly owned group companies. |
|
|
18 |
Controlling party |
|
|
The company is wholly owned by Hudaco Trading (Proprietary) Limited, a company incorporated in the Republic of South Africa. The directors regard the ultimate parent company to be Hudaco Industries Limited incorporated in the Republic of South Africa. That company is not under the control of any one individual. The largest and smallest group of undertakings to which the company belongs and which draws up consolidated accounts is Hudaco Industries Limited. The consolidated accounts can be obtained from 1st Floor, Building 9, Greenstone Hill Office Park, Emerald Boulevard, Greenstone Hill, Edenvale (Private Bag 13, Elandsfontein, 1406).
|
|
|
19 |
Presentation currency |
|
|
The financial statements are presented in Sterling.
|
|
|
20 |
Legal form of entity and country of incorporation |
|
|
Gear Pump Distributors (UK) Limited is a private company limited by shares and incorporated in England. |
|
|
21 |
Principal place of business |
|
|
The address of the company's principal place of business is: |
|
|
Unit 14 Aston Fields Trading Estate |
|
Sugarbrook Road |
|
Bromsgrove |
|
Worcestershire |
|
B60 3DW |