Ney Limited - Limited company accounts 23.2

REGISTERED NUMBER: 01255499 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

NEY LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

15

DIRECTORS:

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 2022.

REVIEW OF BUSINESS

The directors present the results for the year, which are considered to be satisfactory in what remains a very challenging trading environment.

Turnover has been fairly consistent year on year and margins have improved in percentage terms, in spite of significant cost pressures, which are evident in the company's administration costs.

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

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.

Going concern

The directors are confident that the company will still be trading at a sustainable level in the forthcoming 12 months and beyond, in spite of the continuing challenges faced by the company. Latest management accounts indicate the company is making accurate forecasts as it is recording a profit in line with its budgets. As in 2022, the company appears to be generating better margins in percentage terms, despite only modest growth expected beyond 2022.

As such, the directors believe the company to be a going concern and have adopted this assumption in preparing the financial statements, having considered any material uncertainties in this regard for a period of at least 12 months from the date of approval of these financial statements.

FUTURE DEVELOPMENTS

Management are continuing to seek 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.

Gerd Ney - Director

It is with great sadness that the remaining directors and management report the death in March 2023 of Gerd Ney, director and founder of the company. For all those who knew him, both the staff within the company and those parties with whom the company did business - customers, suppliers and other stakeholders alike - his commitment to the company was unparalleled and he will be sorely missed as a mentor, colleague and friend.

ON BEHALF OF THE BOARD:

Ms S Kishver - Director

26 September 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2022.

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 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

Ms S Kishver

H Cotting

Other changes in directors holding office are as follows:

G C Ney (Deceased) ceased to be a director after 31 December 2022 but prior to the date of this report.

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;

-	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 2023

Opinion

We have audited the financial statements of Ney Limited (the 'company') for the year ended 31 December 2022 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 2022 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

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 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.

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 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.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The audit process includes an assessment of the entity's risk environment, through enquiry of and discussion with management, including an assessment of any key laws and regulations with which the company must comply in the ordinary course of its business.

Additionally, the overall risks of irregular transactions occurring are assessed following our observations and confirmation of the design and implementation of management's controls. Whilst we are mindful of these risks, our audit focus is geared towards the risk of material misstatement in the financial statements as a whole.

As such, our procedures cannot guarantee that all transactions have been fully compliant with all relevant laws and regulations, including those regulations relating to fraud, as our procedures are not designed to detect all instances of non-compliance. By definition, the risk of our detection of non-compliance is greater where compliance with a law or regulation is removed from the events and transactions reflected in the financial statements. The risk is also greater regarding irregularities due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 2023

TURNOVER

3

14,274,305

14,206,575

Cost of sales

10,661,043

11,115,139

GROSS PROFIT

3,613,262

3,091,436

Administrative expenses

3,559,594

3,200,930

53,668

(109,494

)

Other operating income

(26,992

)

284,809

OPERATING PROFIT

5

26,676

175,315

Interest receivable and similar income

6

28,000

28,000

54,676

203,315

Interest payable and similar expenses

7

249,227

134,400

(LOSS)/PROFIT BEFORE TAXATION

(194,551

)

68,915

Tax on (loss)/profit

8

(33,031

)

16,337

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(161,520

)

52,578

(LOSS)/PROFIT FOR THE YEAR

(161,520

)

52,578

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(161,520

)

52,578

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

1,618,937

1,872,177

1,618,937

1,872,177

CURRENT ASSETS

Stocks

11

9,353,272

9,483,060

Debtors

12

3,191,935

3,301,371

Cash at bank and in hand

784,159

814,432

13,329,366

13,598,863

CREDITORS

Amounts falling due within one year

13

7,490,207

7,833,619

NET CURRENT ASSETS

5,839,159

5,765,244

TOTAL ASSETS LESS CURRENT LIABILITIES

7,458,096

7,637,421

CREDITORS

Amounts falling due after more than one year

14

(2,837,146

)

(2,822,401

)

PROVISIONS FOR LIABILITIES

18

-

(32,550

)

NET ASSETS

4,620,950

4,782,470

CAPITAL AND RESERVES

Called up share capital

19

800,000

800,000

Retained earnings

20

3,820,950

3,982,470

SHAREHOLDERS' FUNDS

4,620,950

4,782,470

The financial statements were approved by the Board of Directors and authorised for issue on 26 September 2023 and were signed on its behalf by:

Ms S Kishver - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2021

800,000

3,929,892

4,729,892

Changes in equity

Total comprehensive income

-

52,578

52,578

Balance at 31 December 2021

800,000

3,982,470

4,782,470

Changes in equity

Total comprehensive income

-

(161,520

)

(161,520

)

Balance at 31 December 2022

800,000

3,820,950

4,620,950

Cash flows from operating activities

Cash generated from operations

1

361,141

(207,182

)

Interest paid

(243,301

)

(122,018

)

Interest element of hire purchase or finance lease rental payments paid

(5,926

)

(12,382

)

Net cash from operating activities

111,914

(341,582

)

Cash flows from investing activities

Purchase of tangible fixed assets

(87,344

)

(137,322

)

Interest received

28,000

28,000

Net cash from investing activities

(59,344

)

(109,322

)

Cash flows from financing activities

Loan repayments in year

(80,000

)

-

Amount introduced by directors

20,020

-

Amount withdrawn by directors

(13,316

)

(35,884

)

Net cash from financing activities

(73,296

)

(35,884

)

Decrease in cash and cash equivalents

(20,726

)

(486,788

)

Cash and cash equivalents at beginning of year

2

619,081

1,105,869

Cash and cash equivalents at end of year

2

598,355

619,081

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2022

2021

£

£

(Loss)/profit before taxation

(194,551

)

68,915

Depreciation charges

340,584

314,099

Foreign exchange adjustment on loans

153,740

68,877

Finance costs

249,227

134,400

Finance income

(28,000

)

(28,000

)

521,000

558,291

Decrease/(increase) in stocks

129,788

(2,009,690

)

Decrease in trade and other debtors

107,008

171,189

(Decrease)/increase in trade and other creditors

(396,655

)

1,073,028

Cash generated from operations

361,141

(207,182

)

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 2022

31.12.22

1.1.22

£

£

Cash and cash equivalents

784,159

814,432

Bank overdrafts

(185,804

)

(195,351

)

598,355

619,081

Year ended 31 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

814,432

1,107,743

Bank overdrafts

(195,351

)

(1,874

)

619,081

1,105,869

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.22

Cash flow

At 31.12.22

£

£

£

Net cash

Cash at bank and in hand

814,432

(30,273

)

784,159

Bank overdrafts

(195,351

)

9,547

(185,804

)

619,081

(20,726

)

598,355

Debt

Debts falling due within 1 year

(893,333

)

-

(893,333

)

Debts falling due after 1 year

(2,363,406

)

(73,740

)

(2,437,146

)

(3,256,739

)

(73,740

)

(3,330,479

)

Total

(2,637,658

)

(94,466

)

(2,732,124

)

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. See note 11 for the net carrying amount of the inventory and associated impairment provision.

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) Warranty 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 buildings

-

2% on cost

Leasehold improvements

-

20% on cost

Long leasehold

-

over the lease term

Plant and machinery

-

25% on cost

Fixtures & fittings

-

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.

Government grants

Other operating income includes government grants arising from the impact of Coronavirus (COVID-19) with the purpose of compensating the company for expenditure under the Job Retention Scheme, or other grants for loss of income, and are recognised in the period in which they become receivable.

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 loss (2021 - profit) before taxation are attributable to the one principal activity of the company.

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

2022

2021

£

£

Sale of goods

13,918,591

13,918,437

Rendering of services

232,670

179,717

Sales commission

123,044

108,421

14,274,305

14,206,575

An analysis of turnover by geographical market is given below:

2022

2021

£

£

United Kingdom

12,475,183

12,407,957

Europe

1,798,206

1,790,602

Rest of World

916

8,016

14,274,305

14,206,575

4.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

2,314,038

2,126,005

Social security costs

220,259

179,199

Other pension costs

79,689

81,219

2,613,986

2,386,423

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

2022

2021

Sales, warehouse and administration

79

87

2022

2021

£

£

Directors' remuneration

83,431

69,689

Directors' pension contributions to money purchase schemes

24,000

24,000

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

Money purchase schemes

1

1