ONDRIVES_GROUP_LIMITED - Accounts

The directors present the strategic report for the year ended 31 March 2020.

Trading in the year has seen a downturn with a 9% decrease in turnover and 49% increase in profit before taxation, which are two of the most significant KPIs used by the business.

The key risks to the business are general business recession in the main trading markets, or a dramatic appreciation in sterling, making exports less competitive.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2020.

The principal activity of the group continued to be that of the manufacture, marketing and sale of precision engineering components, whilst the principal activity of the company continued to be that of a holding company.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

D W Hinchliffe

S M Hinchliffe

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £202,500. The directors do not recommned payment of a further dividend.

In accordance with the company's articles, a resolution proposing that UHY Hacker Young be reappointed as auditor of the group will be put at a General Meeting.

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.

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 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 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.

We have audited the financial statement of Ondrives Group Limited ( the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2019 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, the group and company statement of changes in equity, the group statement of cash flows and 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 FRS 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 March 2020 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.

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 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 group's or the parent 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 included in the annual report, other than the financial statements and our auditor’s report 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 our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

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 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.

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.

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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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 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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £39,567 (2019 - £17,086 profit).

Ondrives Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Foxwood Industrial Park, Foxwood Road, Chesterfield, Derbyshire, S41 9RN.

The group consists of Ondrives Group Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The consolidated financial statements incorporate those of Ondrives Group Limited and all of its subsidiaries.

All financial statements are made up to 31 March 2020. 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 group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.

In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China. In the first months of 2020, the virus, SARS-CoV-2, and resulting disease COVID-19, spread to the United Kingdom.

The resulting actions in the UK taken by the government to control the pandemic initially impacted on operations.

All appropriate measures have now been put in place to reduce the ongoing impact on the business.

The directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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.

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.

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.

The tax expense represents the sum of the tax currently payable and deferred 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 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.

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.

The directors do not believe there are any material judgements or estimates.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The directors of this company did not receive remuneration in the current or preceding years. Nor did any director of this company receive pension contributions paid for by the company.

The directors of this company and the main trading subsidiary, Ondrives Limited, are considered to be the key management personnel and their combined remuneration for the year was £381,772 (2019 - £416,322). The number of key management personnel for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2019 - 1).

Investment income includes the following:

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:

Following revision of FRS 102, the property was moved from investment property to freehold land and buildings at deemed cost. The historic cost of the property is £335,070 (2019: £335,070).

Land and buildings has not been depreciated during the year as the directors believe the realisable value of the property is not materially different from the carrying value of the property.

Other investments represent 20% shareholdings in Ongears Limited, E-Cad.co.uk Limited, Aero Gears Limited, Aerospace Gears Limited, Ondrives Gears Limited, Ondrives Aerospace Limited and Ondrives Aerospace Gears Limited.

All companies are dormant, incorporated in England and Wales and have capital and reserves of £100 each.

Details of the company's subsidiaries at 31 March 2020 are as follows:

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Amounts subscribed for share capital in excess of nominal value.

The revaluation reserve represents the revaluation of freehold land and buildings above historic cost. This is a non-distributable reserve.

This compromises of opening retained earnings, the profit or loss for the year and dividends paid as set out in the Statement of Changes in Equity.

Amounts contracted for but not provided in the financial statements:

D Hinchliffe controls 80% of the share capital of Sarl Engrenages, a company registered in France. During the year Ondrives Limited made sales totalling £574,863 (2019 - £672,952) to and purchases totalling £14,347 (2019 - £25,912) from the company. At the year end £143,074 (2019 - £186,449) was due from this company and is included in other debtors. At the year end £3,111 (2019 - £Nil) was due to this company and is included in amounts due to connected company.

During the year management charges have been invoiced to Ondrives Limited by its parent company, Ondrives Group Limited, totalling £14,000 (2019 - £4,667). At the year end £142,311 (2019 - £135,194) was due from Ondrives Group Limited and is included in amounts due from fellow group undertakings.

During the year rent of £125,500 (2019 - £99,005) has been paid to a pension fund from Ondrives Limited, of which D Hinchliffe, S Hinchliffe and B Hinchliffe (Directors) are trustees of. At the year end £Nil (2019 - £Nil) was due to or from the pension fund.

D Hinchliffe and S Hinchliffe are directors of HPC Group Limited. During the year, a loan of £260,000 was provided to Ondrives Limited from HPC Group Limited. At the year end £260,000 (2019 - £Nil) was due to HPC Group Limited from Ondrives Limited and is included in amounts due to fellow group undertakings. At the year end, £115,976 (2019 - £115,976) was due to HPC Group Limited from Ondrives Group Limited.

The ultimate controlling party is D W Hinchliffe, a director of the company who holds the majority of the issued share capital.