Baldwin Filters Limited - Limited company accounts 20.1

REGISTERED NUMBER: 00472388 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

FOR

BALDWIN FILTERS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

G Ellinor

J Elsey

REGISTERED OFFICE:

Parker House

55 Maylands Avenue

Hemel Hempstead

Hertfordshire

HP2 4SJ

REGISTERED NUMBER:

00472388 (England and Wales)

SENIOR STATUTORY AUDITOR:

MJ Gibbs FCCA

AUDITORS:

Dafferns LLP

Chartered Accountants

Statutory Auditor

One Eastwood

Harry Weston Road

Binley Business Park

Coventry

CV3 2UB

The directors present their strategic report for the year ended 30 June 2020.

Our aim is to present a balanced review of the performance and development of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

REVIEW OF BUSINESS

In May 2017, Parker Hannifin announced the full closure of the Baldwin Filters Runcorn site and the cessation of both manufacturing and distribution operations in the UK by mid 2018.

The trade was wound down between December 2017 and April 2018, with much of the trade transferred to other group companies outside the UK. By 30 June 2018, the company had ceased trading and continued that way throughout the period to 30 June 2020.

PRINCIPAL RISKS AND UNCERTAINTIES

The company ceased trading during the year to 30 June 2018, with manufacturing and distribution moving to other group companies outside the UK. Parker Hannifin has agreed to fund the company to trade as a going concern through to the closure and ensure an orderly wind up of the company with no detriment to external creditors.

KEY PERFORMANCE INDICATORS

Given the decision to cease trading, the key performance indicators have been related to minimising close down costs and maximising the value realised from assets.

ON BEHALF OF THE BOARD:

G Ellinor - Director

24 June 2021

The directors present their report with the financial statements of the company for the year ended 30 June 2020.

CESSATION OF TRADING

The company ceased trading on 30 June 2018.

PRINCIPAL ACTIVITY

The company ceased all manufacturing by the end of June 2018, and remained dormant throughout this period.

DIVIDENDS

No dividends will be distributed for the year ended 30 June 2020.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 July 2019 to the date of this report.

G Ellinor

J Elsey

The directors' interests in the shares of the parent company are shown in the financial statements of that company.

GOING CONCERN

Parker Hannifin has confirmed that it will continue to provide the company with sufficient financial support and working capital to fund further closure costs and to enable the company to meet its ongoing liabilities as they fall due, on this basis the directors conclude that the going concern basis of accounting remains appropriate at 30 June 2020.

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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;

-	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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

G Ellinor - Director

24 June 2021

Opinion

We have audited the financial statements of Baldwin Filters Limited (the 'company') for the year ended 30 June 2020 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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 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 30 June 2020 and of its loss 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.

Parker Hannifin has confirmed that it will continue to provide the company with sufficient financial support and working capital to fund further closure costs and to enable the company to meet its ongoing liabilities as they fall due, on this basis it is concluded that the going concern basis of accounting remains appropriate at 30 June 2020.

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.

MJ Gibbs FCCA (Senior Statutory Auditor)

for and on behalf of Dafferns LLP

Chartered Accountants

Statutory Auditor

One Eastwood

Harry Weston Road

Binley Business Park

Coventry

CV3 2UB

24 June 2021

TURNOVER

-

-

Cost of sales

(38,444

)

(276,983

)

GROSS LOSS

(38,444

)

(276,983

)

Distribution costs

-

1,101

Administrative expenses

(89,107

)

(114,670

)

OPERATING LOSS

5

(127,551

)

(390,552

)

Exceptional items

6

(129,376

)

(50,000

)

(256,927

)

(440,552

)

Interest payable and similar expenses

7

(74,843

)

-

LOSS BEFORE TAXATION

(331,770

)

(440,552

)

Tax on loss

8

-

50,000

LOSS FOR THE FINANCIAL YEAR

(331,770

)

(390,552

)

CURRENT ASSETS

Debtors

9

6,664,645

6,792,195

CREDITORS

Amounts falling due within one year

10

(7,344,996

)

(7,140,776

)

NET CURRENT LIABILITIES

(680,351

)

(348,581

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(680,351

)

(348,581

)

CAPITAL AND RESERVES

Called up share capital

11

16,250

16,250

Share premium

12

7,723,850

7,723,850

Capital contribution reserve

12

3,000,000

3,000,000

Retained earnings

12

(11,420,451

)

(11,088,681

)

SHAREHOLDERS' FUNDS

(680,351

)

(348,581

)

The financial statements were approved by the Board of Directors and authorised for issue on 24 June 2021 and were signed on its behalf by:

G Ellinor - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 July 2018

16,250

(12,264,249

)

7,723,850

Changes in equity

Total comprehensive income

-

1,175,568

-

Balance at 30 June 2019

16,250

(11,088,681

)

7,723,850

Changes in equity

Total comprehensive income

-

(331,770

)

-

Balance at 30 June 2020

16,250

(11,420,451

)

7,723,850

Capital

Revaluation

contribution

Total

reserve

reserve

equity

£

£

£

Balance at 1 July 2018

1,566,120

3,000,000

41,971

Changes in equity

Total comprehensive income

(1,566,120

)

-

(390,552

)

Balance at 30 June 2019

-

3,000,000

(348,581

)

Changes in equity

Total comprehensive income

-

-

(331,770

)

Balance at 30 June 2020

-

3,000,000

(680,351

)

1.	STATUTORY INFORMATION

Baldwin Filters 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.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

In May 2017, Parker Hannifin announced the full closure of the Baldwin Filters Runcorn site and the cessation of both manufacturing and distribution operations in the UK. During the year ended 30 June 2018, the trade was wound down between December 2017 and April 2018, with much of the trade transferred to other group companies outside the UK and by 30 June 2018, the company had ceased trading.

During October 2018 the company's main asset, the property was sold, and by the end of June 2020 a full provision was in place to settle a dilapidations claim at a previously occupied property.

Parker Hannifin has confirmed that it will continue to provide the company with sufficient financial support and working capital to fund further closure costs and to enable the company to meet its ongoing liabilities as they fall due, on this basis the directors conclude that the going concern basis of accounting remains appropriate at 30 June 2020.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Goodwill

Goodwill arising on the acquisition of businesses, representing any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight-line basis over its useful economic life. All previously purchased goodwill has now been fully impaired.

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 profit before tax.

Pension costs and other post-retirement benefits

The company contributes to a number of personal pension schemes on behalf of certain employees. The amount charged to the profit and loss account in respect of pension costs and other post-retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

Debtors and creditors receivable / payable within one year

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 profit and loss account in other administrative expenses.

Capital contribution

Funding received from the previous ultimate parent (Clarcor Inc) that is not intended as new share capital, has no requirement to be repaid and has no costs associated with it is treated as an increase in the company's capital and has been classified as a capital contribution within reserves.

4.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Pension costs

(30,112

)

-

The average number of employees during the year was NIL (2019 - NIL).

2020

2019

£

£

Directors' remuneration

-

-

5.	OPERATING LOSS

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

2020

2019

£

£

Loss/(profit) on disposal of fixed assets

83,946

(16,273

)

Auditors' remuneration

6,200

2,550

Foreign exchange differences

-

87,940

6.	EXCEPTIONAL ITEMS

2020

2019

£

£

Exceptional items

(129,376

)

(50,000

)

During the year ended 30 June 2020, the dilapidation provision has been increased to reflect the post year end completion statement, resulting in a charge of £129,376.

2020

2019

£

£

Dilapidation provision

129,376

50,000

129,376

50,000

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

£

£

Other interest

74,843

-

8.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2020

2019

£

£

Deferred tax

-

(50,000

)

Tax on loss

-

(50,000

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2020

2019

£

£

Loss before tax

(331,770

)

(440,552

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

(63,036

)

(83,705

)

Effects of:

Timing differences, primarily in respect of tangible fixed assets

-

33,705

provision for impairment of

Losses carried forward

63,036

-

Total tax credit

-

(50,000

)

9.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Amounts owed by group undertakings

6,664,645

6,792,195

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Amounts owed to group undertakings

6,957,620

6,882,776

Accrued expenses

387,376

258,000

7,344,996

7,140,776

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

£

£

16,250

Ordinary

£1

16,250

16,250

12.

RESERVES

Capital

Retained

Share

contribution

earnings

premium

reserve

Totals

£

£

£

£

At 1 July 2019

(11,088,681

)

7,723,850

3,000,000

(364,831

)

Deficit for the year

(331,770

)

(331,770

)

At 30 June 2020

(11,420,451

)

7,723,850

3,000,000

(696,601

)

Retained Earnings

The retained earnings account represents cumulative profits and losses net of dividends and other adjustments.

The Share Premium Account

The share premium account represents the premium arising on the issue of shares net of issue costs.

Revaluation Reserve

The revaluation reserve represents the revaluation of the freehold property.

Capital Contribution Reserve

The capital contribution reserve represents the valuation of loan stock.

13.	ULTIMATE PARENT COMPANY

The company's ultimate parent company at 30 June 2020 is Parker Hannifin Corporation, a company incorporated in the state of Ohio in the United States of America. The smallest group in which the results of the company are consolidated is that of Parker Hannifin (Clarcor Filtration) B.V. The largest group in which the results of the company are consolidated is that of Parker Hannifin Corporation The consolidated accounts are available to the public and may be obtained from Parker Hannifin Corporation, 6035 Parkland Boulevard, Cleveland, Ohio, 44124-4141, United States of America.

14.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.