Company Registration No. 01668906 (England and Wales)
INDUSTRIAL MACHINERY SUPPLIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
INDUSTRIAL MACHINERY SUPPLIES LIMITED
COMPANY INFORMATION
Directors
AT Dyer
J Boer
(Appointed 16 July 2020)
Secretary
AT Dyer
Company number
01668906
Registered office
Trans Tech House Gelders Hall Road
Shepshed
Loughborough
Leicestershire
LE12 9NH
Auditor
UHY Hacker Young
14 Park Row
Nottingham
NG1 6GR
Bankers
Barclays Bank
Bishop Meadow Road
Loughborough
Leicestershire
LE11 5RE
Solicitors
Halborns Limited
16 Clarendon Street
Nottingham
NG1 5HQ
INDUSTRIAL MACHINERY SUPPLIES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
INDUSTRIAL MACHINERY SUPPLIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The directors present the strategic report for the year ended 31 December 2020.
Principle activities
The company's principal business is the importing and distribution of commercial vehicle components into the UK and Eire.
The company's sales turnover was deemed satisfactory by the directors against 2020 budgeted figures.
Business review
In 2020 IMS amalgamated with the Dutch based IMS BV.
This has led to cost synergies and a joint European strategy for the newly named IMS Group.
A very competitive market had a negative effect on gross margin.
The company continued to be affected by Brexit in 2020 following the UK’s decision to leave the EU. The effect of Brexit on the UK economy remains uncertain. The main risk is the exchange rate between the GBP and the Euro currencies
Significant losses were made due to detrimental forward currency arrangements, bad debt provisions on specific customers and financial obligations for specific contracts being written off in the current year as opposed to apportioning over the term of the agreement.
The company is investing heavily into IT systems in 2020 and 2021.
Principal risks and uncertainties
Covid 19
The Covid 19 pandemic has greatly affected the UK and world economies. The company has undertaken a significant restructuring process to improve efficiency and to reduce costs. The directors believe that after restructuring the business it will have a sustainable cost base that can match future budgeted sales in the new CV 19 economy.
AT Dyer
Director
29 November 2021
INDUSTRIAL MACHINERY SUPPLIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2020.
Principal activities
The principal activity of the company continued to be that of the importing and distribution of commercial vehicle components in the UK and Eire.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
AT Dyer
J Boer
(Appointed 16 July 2020)
J Bouman
(Resigned 30 June 2020)
Auditor
UHY Hacker Young were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
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 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.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
Statement of disclosure to auditor
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 company’s
auditor
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 company’s
auditor
is aware of that information.
On behalf of the board
AT Dyer
Director
29 November 2021
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INDUSTRIAL MACHINERY SUPPLIES LIMITED
- 4 -
Opinion
We have audited the financial statements of Industrial Machinery Supplies Limited (the 'company') for the year ended 31 December 2020 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 company's affairs as at 31 December 2020 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INDUSTRIAL MACHINERY SUPPLIES LIMITED
- 5 -
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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
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 directors'
r
esponsibilities
s
tatement, 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 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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INDUSTRIAL MACHINERY SUPPLIES LIMITED
- 6 -
Auditor's 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 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
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation, pensions legislation, employment and health and safety regulation, anti-bribery, corruption and fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue and profit. Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of correspondence with and reports to the regulators, enquiries of management, and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Other matters which we are required to address
The financial statements of the Company for the year ended 31 December 2019 were audited by another auditor who expressed an unmodified opinion on those statements on 10 November 2020.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INDUSTRIAL MACHINERY SUPPLIES LIMITED
- 7 -
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.
Andrew Timms (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
29 November 2021
Chartered Accountants
Statutory Auditor
INDUSTRIAL MACHINERY SUPPLIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
- 8 -
Year
Year
ended
ended
31 December
31 December
2020
2019
Notes
£'000
£'000
Turnover
3
17,397
27,432
Cost of sales
(14,401)
(26,204)
Gross profit
2,996
1,228
Distribution costs
210
(868)
Administrative expenses
(3,082)
(2,935)
Operating profit/(loss)
4
124
(2,575)
Interest payable and similar expenses
7
(212)
(261)
Loss before taxation
(88)
(2,836)
Tax on loss
8
467
133
Profit/(loss) for the financial year
379
(2,703)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 9 -
2020
2019
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
9
16
45
Current assets
Stocks
11
3,622
2,673
Debtors
12
4,193
6,571
Cash at bank and in hand
994
6,081
8,809
15,325
Creditors: amounts falling due within one year
13
(8,061)
(15,154)
Net current assets
748
171
Total assets less current liabilities
764
216
Provisions for liabilities
Provisions
15
169
(169)
-
Net assets
595
216
Capital and reserves
Called up share capital
18
10
10
Profit and loss reserves
585
206
Total equity
595
216
The financial statements were approved by the board of directors and authorised for issue on 29 November 2021 and are signed on its behalf by:
AT Dyer
Director
Company Registration No. 01668906
INDUSTRIAL MACHINERY SUPPLIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 10 -
Share capital
Profit and loss reserves
Total
£'000
£'000
£'000
Balance at 1 January 2019
10
2,909
2,919
Year ended 31 December 2019:
Loss and total comprehensive income for the year
-
(2,703)
(2,703)
Balance at 31 December 2019
10
206
216
Period ended 31 December 2020:
Profit and total comprehensive income for the period
-
379
379
Balance at 31 December 2020
10
585
595
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 11 -
1
Accounting policies
Company information
Industrial Machinery Supplies Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Trans Tech House Gelders Hall Road, Shepshed, Loughborough, Leicestershire, LE12 9NH.
1.1
Accounting convention
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 a
mounts
in these financial statements are
rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
:
The
disclosure
requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
-
Section 26 ‘Share based Payment’
:
Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Pon Holdings BV
. These consolidated financial statements are available from its registered office,
Rondebeltweg 31, 1329 BN Almere or Potbus 30052, 1308 AB Almere, Netherlands.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 12 -
1.3
Turnover
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
1.4
Tangible fixed assets
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:
Plant and equipment
10%-20%
Fixtures and fittings
10%-25%
Computers
10%-33%
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 credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company 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.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 14 -
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 16 -
Deferred tax
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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in
profit
or
loss
in the period
in which
it arises.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 17 -
1.14
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
1.16
Warranty provisions
Provision for post sale warranty repair costs are accrued for specific warranty claims made and in process, plus a percentage of in year sales based upon the directors' assessment of average warranty costs historically incurred.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
3
Turnover and other revenue
2020
2019
£'000
£'000
Turnover analysed by geographical market
United Kingdom
16,518
26,700
Rest of Europe
880
732
17,398
27,432
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 18 -
4
Operating profit/(loss)
2020
2019
Operating profit/(loss) for the period is stated after charging/(crediting):
£'000
£'000
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(565)
(153)
Fees payable to the company's auditor for the audit of the company's financial statements
20
(4)
Depreciation of owned tangible fixed assets
29
151
Profit on disposal of intangible assets
(110)
Operating lease charges
177
194
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Non-Directors
20
23
Directors
2
2
Total
22
25
Their aggregate remuneration comprised:
2020
2019
£'000
£'000
Wages and salaries
1,141
1,314
Pension costs
58
56
1,199
1,370
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 19 -
6
Directors' remuneration
2020
2019
£'000
£'000
Remuneration for qualifying services
170
168
Company pension contributions to defined contribution schemes
14
14
184
182
7
Interest payable and similar expenses
2020
2019
£'000
£'000
Other interest
212
261
8
Taxation
2020
2019
£'000
£'000
Current tax
UK corporation tax on profits for the current period
(129)
Adjustments in respect of prior periods
2
Total current tax
2
(129)
Deferred tax
Origination and reversal of timing differences
(469)
(4)
Total tax credit
(467)
(133)
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
8
Taxation
(Continued)
- 20 -
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£'000
£'000
Loss before taxation
(88)
(2,836)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(17)
(539)
Tax effect of expenses that are not deductible in determining taxable profit
1
Tax effect of income not taxable in determining taxable profit
(4)
Change in unrecognised deferred tax assets
(401)
Adjustments in respect of prior years
2
Effect of change in corporation tax rate
(48)
Under/(over) provided in prior years
406
Taxation credit for the period
(467)
(133)
9
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Total
£'000
£'000
£'000
£'000
Cost
At 1 January 2020 and 31 December 2020
73
169
165
407
Depreciation and impairment
At 1 January 2020
63
147
152
362
Depreciation charged in the year
3
17
9
29
At 31 December 2020
66
164
161
391
Carrying amount
At 31 December 2020
7
5
4
16
At 31 December 2019
10
22
13
45
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 21 -
10
Financial instruments
2020
2019
£'000
£'000
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
-
732
11
Stocks
2020
2019
£'000
£'000
Finished goods and goods for resale
3,622
2,673
12
Debtors
2020
2019
Amounts falling due within one year:
£'000
£'000
Trade debtors
3,010
6,121
Corporation tax recoverable
225
228
Amounts owed by group undertakings
141
99
Other debtors
5
58
Prepayments and accrued income
339
61
3,720
6,567
Deferred tax asset (note 16)
473
4
4,193
6,571
13
Creditors: amounts falling due within one year
2020
2019
Notes
£'000
£'000
Bank loans and overdrafts
14
5,000
12,154
Trade creditors
1,415
1,140
Amounts owed to group undertakings
123
Taxation and social security
1,151
588
Derivative financial instruments
732
Other creditors
173
164
Accruals and deferred income
322
253
8,061
15,154
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 22 -
14
Loans and overdrafts
2020
2019
£'000
£'000
Bank overdrafts
5,000
12,154
Payable within one year
5,000
12,154
The bank overdraft relates to the inter-company cash pooling and is repayable on demand and has interest of 2.10%.
15
Provisions for liabilities
2020
2019
£'000
£'000
Warranty provision
169
-
Movements on provisions:
Warranty provision
£'000
At 1 January 2020 and 31 December 2020
169
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2020
2019
Balances:
£'000
£'000
Accelerated capital allowances
(2)
4
Tax losses
364
-
Short term differences
111
-
473
4
INDUSTRIAL MACHINERY SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
16
Deferred taxation
(Continued)
- 23 -
2020
Movements in the year:
£'000
Asset at 1 January 2020
(4)
Credit to profit or loss
(469)
Asset at 31 December 2020
(473)
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
17
Retirement benefit schemes
2020
2019
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
58
56
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
of £1 each
10,000
10,000
10
10
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£'000
£'000
Within one year
195,224
208,000
Between two and five years
109,003
258,000
304,227
466,000
2020-12-31
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