Ney Limited - Limited company accounts 18.2

REGISTERED NUMBER: 01255499 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2018

FOR

NEY LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

DIRECTORS:

G C Ney

Ms S Kishver

H Cotting

REGISTERED OFFICE:

Sibree Road

Stonehouse Trading Estate

Coventry

West Midlands

CV3 4FD

REGISTERED NUMBER:

01255499 (England and Wales)

AUDITORS:

Harrison Beale & Owen Limited

Chartered Accountants and Statutory Auditors

Seven Stars House

1 Wheler Road

Coventry

CV3 4LB

BANKERS:

Barclays Bank Plc

PO Box 2

25 High Street

Coventry

West Midlands

CV1 5QZ

The directors present their strategic report for the year ended 31 December 2018.

REVIEW OF BUSINESS

The directors present the results for the year, which are attached in the annexed financial statements. The company has

made an operating profit and profit after tax for the year, which is considered to be a satisfactory result in what remains a

very challenging trading environment.

Turnover and margins have both declined in the year but in spite of this management have maintained discipline in

controlling the company's overheads, hence the company remaining profitable for the year.

Management remain cautious in the current climate but are satisfied that the underlying trading operations of the

company are profitable.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors do not consider the company to be exposed to any material adverse risks that are specific to the nature of

the company's principal activity in the ordinary course of trading. However, measures are in place to mitigate the impact

of any risks that do arise in the ordinary course of the company's business such as the risk of fluctuations in foreign

exchange rates.

FUTURE DEVELOPMENTS

Management are in the process of seeking ways to widen their product offering as a means to diversifying their range

and thus to better absorb any adverse turns in the natural economic cycle.

As a result of this and the fact that the company is considered to have sufficient financial facilities in place to pay its

debts as they fall due, management consider the company to be a going concern and have adopted this assumption in

preparing the financial statements.

ON BEHALF OF THE BOARD:

Ms S Kishver - Director

26 September 2019

The directors present their report with the financial statements of the company for the year ended 31 December 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the sale and servicing of woodworking

machinery and equipment and the sale of related consumables.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2018.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2018 to the date of this

report.

G C Ney

Ms S Kishver

H Cotting

DISCLOSURE IN THE STRATEGIC REPORT

The company's review of business, principal risks and uncertainties and future developments are disclosed within the

strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements

in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and of the profit or loss of the company for that period. In preparing these financial statements, the directors

are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have

taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the

company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Ms S Kishver - Director

26 September 2019

Opinion

We have audited the financial statements of Ney Limited (the 'company') for the year ended 31 December 2018 which

comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash

Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of

significant accounting policies. The financial reporting framework that has been applied in their preparation is

applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial

Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting

Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2018 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise

explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. If, based on the work we have performed, we conclude

that there is a material misstatement of this other information, we are required to report that fact. We have nothing to

report in this regard.

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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 company and its environment obtained in the course of the audit,

we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic

alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors 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.

Wayne Gutteridge ACA (Senior Statutory Auditor)

for and on behalf of Harrison Beale & Owen Limited

Chartered Accountants and Statutory Auditors

Seven Stars House

1 Wheler Road

Coventry

CV3 4LB

26 September 2019

TURNOVER

3

12,858,679

13,060,044

Cost of sales

9,940,973

9,696,817

GROSS PROFIT

2,917,706

3,363,227

Administrative expenses

2,698,584

2,852,066

219,122

511,161

Other operating income

176,115

168,998

OPERATING PROFIT

5

395,237

680,159

Interest receivable and similar income

6

397

6,644

395,634

686,803

Interest payable and similar expenses

7

235,000

236,070

PROFIT BEFORE TAXATION

160,634

450,733

Tax on profit

8

12,234

104,461

PROFIT FOR THE FINANCIAL YEAR

148,400

346,272

PROFIT FOR THE YEAR

148,400

346,272

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

148,400

346,272

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

1,409,684

1,302,697

1,409,684

1,302,697

CURRENT ASSETS

Stocks

11

7,386,584

7,526,102

Debtors

12

2,558,641

2,143,386

Cash at bank and in hand

903,456

462,189

10,848,681

10,131,677

CREDITORS

Amounts falling due within one year

13

3,980,954

3,533,580

NET CURRENT ASSETS

6,867,727

6,598,097

TOTAL ASSETS LESS CURRENT LIABILITIES

8,277,411

7,900,794

CREDITORS

Amounts falling due after more than one year

14

(3,334,203

)

(3,141,688

)

PROVISIONS FOR LIABILITIES

18

(39,424

)

(3,722

)

NET ASSETS

4,903,784

4,755,384

CAPITAL AND RESERVES

Called up share capital

19

800,000

800,000

Retained earnings

20

4,103,784

3,955,384

SHAREHOLDERS' FUNDS

4,903,784

4,755,384

The financial statements were approved by the Board of Directors on 26 September 2019 and were signed on its behalf by:

Ms S Kishver - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2017

800,000

3,609,112

4,409,112

Changes in equity

Total comprehensive income

-

346,272

346,272

Balance at 31 December 2017

800,000

3,955,384

4,755,384

Changes in equity

Total comprehensive income

-

148,400

148,400

Balance at 31 December 2018

800,000

4,103,784

4,903,784

Cash flows from operating activities

Cash generated from operations

1

881,276

(197,922

)

Interest paid

(235,000

)

(236,070

)

Tax paid

(106,161

)

-

Net cash from operating activities

540,115

(433,992

)

Cash flows from investing activities

Purchase of tangible fixed assets

(118,394

)

(62,228

)

Interest received

397

6,644

Net cash from investing activities

(117,997

)

(55,584

)

Cash flows from financing activities

Loan repayments in year

-

(271,990

)

Amount introduced by directors

7,945

-

Amount withdrawn by directors

(21,141

)

-

Net cash from financing activities

(13,196

)

(271,990

)

Increase/(decrease) in cash and cash equivalents

408,922

(761,566

)

Cash and cash equivalents at beginning of year

2

369,986

1,131,552

Cash and cash equivalents at end of year

2

778,908

369,986

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit before taxation

160,634

450,733

Depreciation charges

108,817

136,678

Foreign exchange loss on loans

70,931

-

Finance costs

235,000

236,070

Finance income

(397

)

(6,644

)

574,985

816,837

Decrease/(increase) in stocks

139,518

(1,179,003

)

Increase in trade and other debtors

(381,163

)

(55,912

)

Increase in trade and other creditors

547,936

220,156

Cash generated from operations

881,276

(197,922

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

903,456

462,189

Bank overdrafts

(124,548

)

(92,203

)

778,908

369,986

Year ended 31 December 2017

31.12.17

1.1.17

£

£

Cash and cash equivalents

462,189

1,133,490

Bank overdrafts

(92,203

)

(1,938

)

369,986

1,131,552

1.	STATUTORY INFORMATION

Ney Limited is a private company, limited by shares , registered in England and Wales. The company's registered

number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The principal accounting policies adopted in the preparation of the financial statements are set out below and

have remained unchanged from the previous year.

Critical accounting judgements and key sources of estimation uncertainty

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will,

by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are

addressed below.

Accounting estimates:

i) Inventory valuation

Included within stock are refurbished machines in work in progress and finished goods which have a labour

element contained within the overall carrying value, based on time allocated by the specialist engineers

employed by the company at a standard hourly rate derived from salaries and other relevant costs. These are

assessed against the expected net realisable value or costs to complete and sell the machine when considering the

carrying value of these items.

ii) Inventory provisioning

The company has historically committed to significant stock holdings to ensure lead times are optimised and to

take account of changes in economic cycles and sentiment in the wider industry. Stock includes both new and

used machines and a wide variety of consumables and spare parts, some of which may be held for a significant

time and for which a future sale is not guaranteed. When considering the inventory provision, management

consider both the historic movement of individual lines and the wider market appetite. This historic and market

data is used by management when determining the associated provisioning required.

iii) Impairment of debtors

The company makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade

and other debtors, management considers factors including the current credit rating of the debtor, the ageing

profile of debtors and historical experience. See note 12 for the net carrying amount of the debtors and

associated impairment provision.

iv) Dilapidation provisioning

The company makes an estimate of any remedial work required to be undertaken in relation to stocks of

machines sold on which there is a warranty period, typically for 12 months from the point of sale. Management

assesses the provision by reference to the past volume of call out incidents where work cannot be billed due to its

meeting the conditions of warranty and the level of past actual costs incurred. See note 13 for the changes in this

provision in the year.

Accounting judgements:

v) Operating leases

The company utilises assets which it does not own and pays for on an ongoing basis. In making the judgement as

to whether such arrangements constitute finance leases or operating leases, management have assessed where the

substantial risk and rewards of the ownership of the assets fall, and assessed that the counter-party, rather than

the company, bears substantially all of the risks and rewards of ownership of the assets.

Turnover

Turnover is measured at the fair value of the consideration received or receivable net of VAT and trade

discounts. The policies adopted for the recognition of turnover are as follows:

Sale of goods

Turnover from the sale of goods is recognised when significant risks and rewards of ownership of the goods have

transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic

benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in

respect of the transaction can be measured reliably. This is usually on despatch of the goods.

Rendering of services

Turnover from rendering of services is recognised based on completion of specific maintenance and/or service

assignments on specific products, where there is no warranty cover in place. This is usually on signed

confirmation from the customer confirming the fulfilment of the assignment.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2004, is being amortised evenly over its estimated useful life of four years.

Goodwill has now been fully amortised.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Leasehold improvements

-

20% on cost

Long leasehold

-

over the lease term

Plant and machinery

-

25% on cost

Furniture and equipment

-

20% on cost

Motor vehicles

-

20% on cost

Computer equipment

-

33% on cost

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost

includes costs directly attributable to making the asset capable of operating as intended.

Stocks

Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all

costs of purchase and other costs incurred in bringing stock to its present location and condition, including any

import costs, duties and carriage.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at

the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held

under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases

are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element

of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Warranty provision

Warranties over the company's products have historically been available to customers and now form part of the

standard terms and conditions of sale. Typically, warranties cover a period of 12 months and provision is made

for the likely cost of after-sales support based on past experience.

Financial instruments

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently,

they are measured at amortised cost using the effective interest rate method, less impairment.

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at

transaction price. Any losses arising from impairment are recognised in the income statement.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2018

2017

£

£

Sale of goods

12,421,395

12,814,606

Rendering of services

232,152

245,438

Sales commission

205,132

-

12,858,679

13,060,044

An analysis of turnover by geographical market is given below:

2018

2017

£

£

United Kingdom

10,589,289

10,901,991

Europe

2,235,211

1,877,548

Rest of World

34,179

280,505

12,858,679

13,060,044

4.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

1,757,327

1,814,630

Social security costs

155,954

154,123

Other pension costs

72,150

53,824

1,985,431

2,022,577

The average number of employees during the year was as follows:

2018

2017

Sales, warehouse and administration

65

70

2018

2017

£

£

Directors' remuneration

46,144

44,072

Directors' pension contributions to money purchase schemes

22,000

12,000

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2018

2017

£

£

Hire of plant and machinery

12,504

12,929

Depreciation - owned assets

108,817

136,678

Auditors' remuneration

10,000

10,000

Foreign exchange differences

14,798

(58,303

)

Operating leases - rent of land and buildings

395,000

83,333

Other operating leases - motor vehicles

51,117

78,283

Inventory recognised as expense

8,031,445

7,518,902

Included within foreign exchange differences is an unrealised loss of £70,931 (2017: gain of £73,023) on the

remeasurement of a long term loan denominated in Swiss Francs of CHF 1,900,000 (2017: CHF 1,900,000).