Priden Engineering Limited - Limited company accounts 17.3

REGISTERED NUMBER: 04315304 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 MARCH 2017

FOR

PRIDEN ENGINEERING LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

DIRECTORS:

S M Warren

M Horsley

K Walker

SECRETARY:

S M Warren

REGISTERED OFFICE:

Algores Way

Wisbech

Cambridgeshire

PE13 2TQ

REGISTERED NUMBER:

04315304 (England and Wales)

SENIOR STATUTORY AUDITOR:

Robert Booty ACA FCCA CTA

AUDITORS:

Wheelers

Chartered Accountants, Tax Consultants

& Statutory Auditors

27-29 Old Market

Wisbech

Cambridgeshire

PE13 1NE

BANKERS:

Barclays Bank PLC

12 Old Market

Wisbech

Cambridgeshire

PE13 1NN

The directors present their strategic report for the year ended 30 March 2017.

REVIEW OF BUSINESS

During the financial year ending 30 March 2017, the company has been engaged principally with its core operations

covering the fields of manufacture of Pneumatic Discharge Equipment, Truck and Bus Components, Commercial

Bodies, Food and Industrial Machinery and our new venture Priden Financial Services.

It's been a busy and challenging year with a desire and ambition to promote growth through investment in people,

development of new products, extensive research and development and actively seeking new geographical markets.

The Company's performance was satisfactory albeit turnover was down by 9.7% to £13.0m on the previous year.

Margins improved slightly due to fluctuations on the previous year between individual division's revenue streams. We

have continued to invest in improving efficiencies in all areas of the business including production and purchasing. The

benefit of the efficiencies has not been fully realised in the year to 30 March 2017.

Current year results are very encouraging with an increase in turnover over the same period compared to last year and

the realisation of our investment in efficiencies is now having a positive impact on the bottom line. The current

confirmed order book is very strong which we are confident will ensure a good final four months to the current financial

year. The Food & Industrial division has recently secured contracts in excess of £400k for completion within the 2018

financial year. The Pneumatics division are now quoting for delivery well into the second quarter of 2018 and recently

the Truck & Bus division has secured a 2 year contract to supply a major bus manufacturer.

During the year the company undertook a full analysis of its branding and marketing and as a consequence the company

relaunched with a new website and corporate logo. This better differentiates the five Priden divisions and communicates

the core values which have been fundamental to its success over the last 30 years.

The company's key financial and other performance indicators during the year were as follows:

30 March 2017

30 March 2016

Change

£

£

%

Turnover

13,008,470

14,398,026

-9.7

Gross Profit

2,555,919

2,658,073

-3.8

Equity

2,002,038

1,827,849

9.5

Average number of employees

98

101

-2.9

As noted above current market conditions and forward orders support the view that trading levels can be comfortably

maintained for the next financial year.

The directors recognise that the long service, engagement and commitment of many of its employees has been fruitful

insomuch that output is both consistent and competent. We do not anticipate this investment and valuable asset will

change in the foreseeable future.

The directors are confident that the business will continue to meet all future regulatory requirements. Compliance with

regulation, legal and ethical standards is a high priority for the business.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's operations expose it to similar risks as others in the manufacturing industry, including aggressive

tendering, credit risk, fragile supply lines, extended credit terms and skilled labour shortages. The company mitigates

these risks by consolidating strong relationships with customers, maintaining strong bonds with suppliers and investing

in a quality workforce.

The company's operations also expose it to a variety of financial risks that include the effects of credit risk and liquidity

risk. The company has in place policies and procedures that seek to limit the potentially adverse effects on the financial

performance of the company of such risks.

Credit risk

The business acknowledges that credit risk has become increasingly important and to manage potential financial loss in

this regard the company maintains appropriate credit control procedures.

Liquidity risk

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial

liabilities. The risk is mitigated as the company has sufficient financial resources available to it to meet its obligations as

they fall due.

FUTURE PLANS

The company is heavily committed to its research and development programme and currently have patent applications

pending. Revenue streams from these are expected in the second quarter of 2018.

To further enhance our Food & Industrial division we are delighted to have been appointed the sole UK and European

distributor and service agent for a major food machinery manufacturer who are based in India. This provides our Food

division with a standard product which we can sell and generate ancillary fabrication work for integration into existing

customer's production lines.

Finally, the key performance indicators for the future are:

- turnover;

- gross margin;

- net trading results.

The directors will aim to maintain these by controls within the management structure by:

- monitoring and managing principal risks;

- assessment of progress against the business's strategy and objectives;

- measurement of performance against objectives and that of competitors.

ON BEHALF OF THE BOARD:

S M Warren - Secretary

22 December 2017

The directors present their report with the financial statements of the company for the year ended 30 March 2017.

DIVIDENDS

During the year the company paid dividends amounting to £160,000 (2016 - £216,000).

DIRECTORS

The directors shown below have held office during the whole of the period from 31 March 2016 to the date of this

report.

S M Warren

M Horsley

K Walker

Other changes in directors holding office are as follows:

A Fordham - resigned 6 March 2017

GOING CONCERN

The company's business activities, together with factors likely to affect its future development, performance and position

are set out in the business review, future performance and principal risks and uncertainties in the Strategic Report.

The directors have prepared cash flow forecasts for the foreseeable future, being at least 12 months from the date of

approval of these financial statements, which indicate that the directors have a reasonable expectation that the company

will have adequate resources to meet its operating liabilities as they fall due for the foreseeable future.

On the basis of their assessment, the company's directors have a reasonable expectation that the company will be able to

continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of

accounting in preparing the annual financial statements.

DISCLOSURE IN THE STRATEGIC REPORT

In accordance with Section 414C(11) of the Companies Act 2006 other matters, normally included within this report, are

set out in 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), 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.

AUDITORS

In accordance with Section 487(2) of the Companies Act 2006 the auditors, Wheelers, are deemed to have been

re-appointed.

ON BEHALF OF THE BOARD:

S M Warren - Secretary

22 December 2017

We have audited the financial statements of Priden Engineering Limited for the year ended 30 March 2017 on pages

eight to twenty six. The financial reporting framework that has been applied in their preparation is applicable law and

United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial

Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.

This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and

have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by

the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with

the audited financial statements and to identify any information that is apparently materially incorrect based on, or

materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 March 2017 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and

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

Opinion on other matter 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with

the financial statements, and has been prepared in accordance with applicable legal requirements. In the light of the

knowledge and understanding of the company and its environment, we have not identified any material misstatements in

the Strategic Report or the Report of the Directors.

Matters on which we are required to report by exception

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.

Robert Booty ACA FCCA CTA (Senior Statutory Auditor)

for and on behalf of Wheelers

Chartered Accountants, Tax Consultants

& Statutory Auditors

27-29 Old Market

Wisbech

Cambridgeshire

PE13 1NE

22 December 2017

TURNOVER

3

13,008,470

14,398,026

Cost of sales

10,452,551

11,739,953

GROSS PROFIT

2,555,919

2,658,073

Distribution costs

14,291

23,421

Administrative expenses

2,146,721

1,839,184

2,161,012

1,862,605

OPERATING PROFIT

6

394,907

795,468

Interest receivable and similar income

7

8,329

1,571

Interest payable and similar expenses

8

(18,123

)

(14,155

)

PROFIT BEFORE TAXATION

385,113

782,884

Tax on profit

9

50,924

149,814

PROFIT FOR THE FINANCIAL YEAR

334,189

633,070

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

334,189

633,070

FIXED ASSETS

Intangible assets

11

98,141

-

Tangible assets

12

719,148

870,923

Investments

13

100

-

817,389

870,923

CURRENT ASSETS

Stocks

14

944,145

1,060,292

Debtors

15

3,455,959

3,423,971

Cash at bank and in hand

555,396

533,959

4,955,500

5,018,222

CREDITORS

Amounts falling due within one year

16

3,572,863

3,809,949

NET CURRENT ASSETS

1,382,637

1,208,273

TOTAL ASSETS LESS CURRENT LIABILITIES

2,200,026

2,079,196

CREDITORS

Amounts falling due after more than one year

17

(29,860

)

(87,317

)

PROVISIONS FOR LIABILITIES

21

(168,128

)

(164,030

)

NET ASSETS

2,002,038

1,827,849

CAPITAL AND RESERVES

Called up share capital

22

3

3

Retained earnings

23

2,002,035

1,827,846

SHAREHOLDERS' FUNDS

2,002,038

1,827,849

The financial statements were approved and authorised for issue by the Board of Directors on 22 December 2017 and were signed on its behalf by:

S M Warren - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 31 March 2015

3

1,410,776

1,410,779

Changes in equity

Dividends

-

(216,000

)

(216,000

)

Total comprehensive income

-

633,070

633,070

Balance at 30 March 2016

3

1,827,846

1,827,849

Changes in equity

Dividends

-

(160,000

)

(160,000

)

Total comprehensive income

-

334,189

334,189

Balance at 30 March 2017

3

2,002,035

2,002,038

Cash flows from operating activities

Cash generated from operations

1

671,721

841,060

Interest paid

(3,422

)

(2,263

)

Interest element of hire purchase payments paid

(14,701

)

(11,892

)

Tax paid

(148,618

)

(142,522

)

Net cash from operating activities

504,980

684,383

Cash flows from investing activities

Purchase of intangible fixed assets

(98,141

)

-

Purchase of tangible fixed assets

(68,796

)

(111,001

)

Purchase of fixed asset investments

(100

)

-

Sale of tangible fixed assets

106,001

4,586

Interest received

8,329

1,571

Net cash from investing activities

(52,707

)

(104,844

)

Cash flows from financing activities

New HP agreements in year

17,360

94,309

Capital repayments in year

(146,508

)

(169,606

)

Amount withdrawn by directors

(54,893

)

(75,637

)

Equity dividends paid

(160,000

)

(216,000

)

Net cash from financing activities

(344,041

)

(366,934

)

Increase in cash and cash equivalents

108,232

212,605

Cash and cash equivalents at beginning of year

2

342,101

129,496

Cash and cash equivalents at end of year

2

450,333

342,101

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

30.3.17

30.3.16

£

£

Profit before taxation

385,113

782,884

Depreciation charges

132,668

154,438

(Profit)/loss on disposal of fixed assets

(1,023

)

4,541

Warranty provision

94

60,534

Finance costs

18,123

14,155

Finance income

(8,329

)

(1,571

)

526,646

1,014,981

Decrease/(increase) in stocks

116,147

(367,454

)

Decrease/(increase) in trade and other debtors

65,863

(237,810

)

(Decrease)/increase in trade and other creditors

(36,935

)

431,343

Cash generated from operations

671,721

841,060

2.	CASH AND CASH EQUIVALENTS

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

these Statement of Financial Position amounts:

Year ended 30 March 2017

30.3.17

31.3.16

£

£

Cash and cash equivalents

555,396

533,959

Bank overdrafts

(105,063

)

(191,858

)

450,333

342,101

Year ended 30 March 2016

30.3.16

31.3.15

£

£

Cash and cash equivalents

533,959

318,932

Bank overdrafts

(191,858

)

(189,436

)

342,101

129,496

1.	STATEMENT OF COMPLIANCE

Priden Engineering 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 financial statements have been prepared in compliance 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.

2.	ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared under the historical cost convention.

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

The significant accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all years presented unless otherwise stated.

Going concern

The company's business activities, together with factors likely to affect its future development, performance and

position are set out in the business review, future performance and principal risks and uncertainties in the

Strategic Report.

The directors have prepared cash flow forecasts for the foreseeable future, being at least 12 months from the date

of approval of these financial statements, which indicate that the directors have a reasonable expectation that the

company will have adequate resources to meet its operating liabilities as they fall due for the foreseeable future.

On the basis of their assessment, the company's directors have a reasonable expectation that the company will be

able to continue in operational existence for the foreseeable future. Thus they continue to adopt the going

concern basis of accounting in preparing the annual financial statements.

Related party exemption

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.

Significant judgements and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions

that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for

revenues and expenses during the year. However, the nature of estimation means that actual outcomes could

differ from those estimates.

The following judgements and estimates have had the most significant effect on amounts recognised in the

financial statements:

Turnover and amounts recoverable on contracts

Turnover on long term contracts is recognised by reference to the stage of completion of contract activity, and

therefore is sensitive to the ability to reliably assess this stage of completion. This is normally based on the costs

incurred to date as a proportion of total anticipated contract costs, however if this does not accurately reflect the

stage of completion then an alternative approach is used instead. In making the assessment of costs to complete

the contract, management considers not only specific forecast costs but also the level of risk on the contract. In

addition, if the final outcome of a contract cannot be reliably assessed, revenue recognition is limited to the level

of costs incurred until such time that the contract has progressed sufficiently to make profit recognition

appropriate. Where a contract is forecast to be loss making, full provision is made for such losses in the first year

in which they are foreseen.

Warranty

The company offers a warranty on products sold to customers. As such, it is necessary to consider the expected

future costs that will be incurred in meeting this warranty obligation and the associated warranty provision

required. When calculating the warranty provision, management considers the specific warranty terms offered to

customers, as well as both historic rates of warranty claims and any current issues of which management is

aware.

Turnover

Turnover comprises the invoiced value of goods and services supplied by the company excluding trade discounts

and value added tax. Turnover relating to long-term contracts represents the value of work performed during the

year determined by reference to the stage of completion of the contract.

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and

the revenue can be reliably measured. The specific methods used to recognise the different forms of revenue

earned by the company are set out below.

i) Sale of goods

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

have passed to the buyer and the amount of revenue can be reliably measured.

ii) Long-term contracts

Turnover from long-term contracts is recognised by reference to the stage of completion of contract activity at

the year end date. This is normally determined by the proportion that contract costs incurred to date bear to the

estimated total contract costs, except where this would not be representative of the stage of completion. If the

nature of a particular contract means that costs incurred do not accurately reflect the progress of contract activity,

an alternative approach is used such as the achievement of pre-determined contract milestones.

Revenue in respect of variations to contracts, claims and incentive payments are recognised when it is highly

likely that it will be agreed by the customer. Profit attributable to long-term contracts is recognised if the final

outcome of such contracts can be reliably assessed. On all contracts, full provision is made for any losses in the

year in which they are first foreseen.

iii) Rendering of services

Turnover from the provision of services is recognised as the contract activity progresses to reflect the

performance of the underlying contractual obligations.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Development costs are capitalised to the extent that they represent expenditure on separately identifiable projects

on which the outcome is assessed as probable that future economic benefits will flow to the company.

Amortisation is provided over the useful life of five years, at the commencement of income being generated from

the project,.

Research costs are written off in the year in which they are incurred.

Tangible fixed assets

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

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

Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated

residual value, of each asset on a systematic basis over its useful economic life or, if held under a finance lease,

over the term of the lease, whichever is shorter, as follows:

Improvements to leasehold property

2% on cost

Plant and machinery

15% on reducing balance

Computer equipment

25% on cost

Fixtures and fittings

15% on reducing balance

Motor vehicles

25% on reducing balance

Depreciation is provided when the assets are available for use.

The carrying values of tangible fixed assets are reviewed for impairment if events or changes in circumstances

indicate the carrying value may not be recoverable, and are written down immediately to their recoverable

amount. Useful lives and residual values are reviewed annually and where adjustments are required, these are

made accordingly.

Stocks

Stocks are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each

product to its present location and condition, as follows:

- Raw materials, consumables and goods for resale - purchase cost on a first-in, first-out basis.

- Work in progress and finished goods - cost of direct materials and labour plus attributable overheads based on a

normal level of activity.

Net realisable value is based on estimated selling price less any further costs expected to be incurred to

completion and disposal.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, 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 statement of financial position date.

Deferred tax

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

statement of financial position 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.