Company Registration No. 01944865 (England and Wales)
PANAZ LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2022
31 March 2022
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
PANAZ LIMITED
COMPANY INFORMATION
Directors
Mr A J W Attard
Mrs P M Attard
Mr R S Attard
Mr N Memon
Company number
01944865
Registered office
Bentley Wood Way
Network 65 Business Park
Hapton
Burnley
Lancashire
BB11 5ST
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
PANAZ LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of income and retained earnings
10
Balance sheet
11
Notes to the financial statements
12 - 23
PANAZ LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -
The directors present the strategic report for the year ended 31 March 2022.
Fair review of the business
Panaz manufactures and distributes exclusive interior textiles and wallcoverings all of which are designed and distributed within our group headquarters and produced within our own manufacturing facilities or in conjunction with our strategic eco-system partners. We process fabrics via carefully selected subcontracted supply chains, and create printed fabrics using in house advanced manufacturing facilities.
The company operates from a modern warehouse and distribution centre in Hapton with direct access to the M65 and thus the national motorway network. There is additional land on site available for expansion.
The Panaz European team has successfully established one of the world’s foremost Contract fabric companies, becoming leaders in the design, manufacture, and distribution of desirable inherently flame retardant and exclusive fabrics. There is a clear culture within the business that is determined to ensure our customer receive the best possible professional service.
Embedded in the business is an experienced management team who is strong, dedicated and internationally focused capable of delivering sizable growth.
Key performance indicators
-
Turnover ended March 2022 at just under £16.5m
-
Turnover up +21% from the previous Year
-
Turnover split: UK 76%, Export 24%
-
Positive pre-tax profit increase of 1.5% vs the previous year
Strengths
-
UK Market leader with an ambition to grow and lead globally
-
Huge spectrum of growth through an abundance of UK and export opportunities
-
Lead by exemplary Customer service levels
-
Substantial electronic customer interaction – website over 1m hits per annum
-
Exceptional employee engagement of over 90%
-
Panaz is an acknowledged industry innovator
Customer profile
-
High-profile blue-chip customers
-
Highly discerning interior design and architectural customer base
-
Very high quality with ultra low returns rate
-
International and global Panaz brand awareness
-
Global Shipping and cruise ship clients
-
Over 80% repeat customers
-
10,000 samples shipped weekly
Diversified product range offering a unique one-stop-shop for contract fabric solutions.
Over 7,000 individual SKUs with a further number of print variants creates the largest contract fabric available from stock in the UK. With multi-channel usage adding versatility and increased stock turn.
PANAZ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
Summary of Key Strategic Areas
A conscious decision was taken to diversify our existing supply chain. This has led to more flexibility on cost and limited geopolitical risk. Panaz continues to invest in research and development in innovative products and processes that set a benchmark within the industry. We have recently created new trademarks in Shieldplus by Panaz, an antimicrobial fabric finish and topical cleaner, and Arma a new stain resistant and flame-retardant finish for polyester upholstery.
We continue to invest in the latest digital technology to enhance the speed of manufacturing and the variety of designs we can offer. In addition to new machinery, we have launched an online platform branded as ReMake. An industry first digital platform, that allows pre-registered customers the opportunity to re-colour all Panaz designs from the product portfolio. In addition, the platform provides the software to upload designs to print directly on Panaz digital machinery. This investment in digital automation will offer significant opportunities in the future.
Sampling is an important part of the Panaz customer service proposition. Over10,000 individual samples are shipped on a weekly basis worldwide. Recent investments in sampling order inputting is resulting in more information gathered to aid sales and stock inventory decisions.
All staff are incentivised to successfully retain customers and procure new avenues and are regarded as part of our profit incentive scheme. This is robustly tracked and managed through strategic analysis and key performance indicators.
At the end of 2017 Panaz successfully negotiated the exclusive distribution rights to sell Silicastone products to the UK independent retail and Interior design sector. With early sales looking promising to key customers who have highly integrated CSR responsibilities. The partnership looks set to develop significantly over the coming years.
Panaz has since its inception set high standards reducing its environmental impact. We were the first company in our industry to utilise waterless printing methods. We aim to sustain and improve our natural environment for the benefit of all. We are committed to continual improvement in our environmental performance by improving the efficiency with which we use resources and through compliance with all relevant environmental regulation and legislation. We operate a robust environmental management system to ensure environmental issues are integrated into our business processes and practices.
The board takes active steps to ensure that the suggestions views and interests of staff members are gathered and considered in its strategic direction. The company benefits from having a board who are actively involved in the daily running of the business and maintain regular communications with its management team. Further examples of how the board engages with its staff include regular updates on business performance through employee newsletters and web-based HR facilitation Hi Bob. The company also offers employees the opportunity to for career development and regular communication where necessary from a company's in house human resources on all major matters of importance including the welfare and health and safety of the workforce.
The company is an active member of the Furniture Makers Charity and we encourage staff to become involved in local and national fund raising events.
Principle Risks and Uncertanties
full cooperation with customers which has resulted in a positive increase of sales turnover.
We have worked hard this year to mitigate the effects of Brexit. Viable routes into Europe have been established along with the creation of a European distribution hub in Holland which together has reduced the complexities and issues significantly, in addition transport costs are coming down and customers are being serviced more efficiently. Our internal teams in logistics and supply chain have done an amazing job servicing our customers.
The cost to ship and import products around the world has remained high during 2021. However, we do anticipate significant reductions to this risk in 2022/23.
The company is exposed to many risk profiles some of which are financial, including credit risk, liquidity risk, foreign exchange, internal/external fraud and pricing risk. However, much of the risk is managed by a comprehensive strategy that aims to limit potential adverse effects. Foreign exchange uncertainty adds to short term risk, although mostly hedged by export activities. The group has implemented policies and procedures that require appropriate credit checks on customers before sales are executed or agreed. The amount of exposure to any individual customer is subject to a limit, which is reassessed regularly.
Unfortunately, in today’s environment there are now risks to computer and information systems. We actively take steps to mitigate against such factors and invest in protective software and have implemented advanced operating procedures.
Going concern
Despite the continuation of the pandemic and export complexities the Directors are confident that profit will be generated for the full year in 2022 and Panaz is in a strong position to grow in the years to come.
PANAZ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
Mr R S Attard
Director
15 December 2022
PANAZ LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2022.
Principal activities
The principal activity of the company continued to be that of the manufacture and distribution of exclusive interior textiles and wall coverings.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £2,000,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A J W Attard
Mrs P M Attard
Mr R S Attard
Mr N Memon
Auditor
The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
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.
PANAZ LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 5 -
On behalf of the board
Mr R S Attard
Mr N Memon
Director
Director
15 December 2022
PANAZ LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PANAZ LIMITED
- 6 -
Opinion
We have audited the financial statements of Panaz Limited (the 'company') for the year ended 31 March 2022 which comprise the statement of income and retained earnings, the balance sheet 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 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 March 2022 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.
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.
PANAZ LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PANAZ LIMITED
- 7 -
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 or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which 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.
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
.
Extent to which the audit was considered capable of
detecting irregularities, including fraud
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
.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
PANAZ LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PANAZ LIMITED
- 8 -
Identifying and assessing potential risks related to
irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, we have considered the following
:
-
the nature of the industry and sector, control environment and
business performance including the design of the
Company'
s
remuneration policies, key drivers for directors’ remuneration,
bonus levels and performance targets;
-
results of our enquiries of management about their own identification and assessment of
the risks of irregularities;
-
the matters discussed among the audit engagement team
and
relevant specialists regarding how and where fraud
might occur in the financial statements and any potential
indicators of fraud
;
-
a
ny matters we identified having obtained and reviewed the
Company's
documentation of their policies and procedures
relating to:
-
identifying, evaluating and complying with laws and regulations
and whether they were aware of any instances of non
-
compliance;
-
detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged
fraud;
-
the internal controls established to mitigate risks of fraud or
non-compliance with laws and regulations
.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory
frameworks that the
Company
operates in, focusing on provisions
of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this
context included
UK Companies Act, employment law, health and
safety
regulations
, pensions legislation and tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
-
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
-
enquiring of management concerning actual and potential litigation and claims;
-
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
-
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
-
in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations
(irregularities) is
from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by
auditing standards would identify it. In addition, as with any audit, there
remained a higher risk of non
-
detection of irregularities, as these may
involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal controls. We are not responsible for preventing
non-compliance and cannot be expected to detect non-compliance with
all laws and regulations.
PANAZ LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PANAZ LIMITED
- 9 -
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
David Gorton FCA CTA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
15 December 2022
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
PANAZ LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2022
- 10 -
2022
2021
Notes
£
£
Turnover
3
16,343,257
13,454,008
Cost of sales
(9,576,918)
(7,946,529)
Gross profit
6,766,339
5,507,479
Distribution costs
(1,102,833)
(826,079)
Administrative expenses
(4,398,920)
(3,893,246)
Other operating income
475,474
939,830
Operating profit
4
1,740,060
1,727,984
Interest payable and similar expenses
7
(503)
(43,877)
Profit before taxation
1,739,557
1,684,107
Tax on profit
8
(281,269)
(247,977)
Profit for the financial year
1,458,288
1,436,130
Retained earnings brought forward
6,991,894
7,055,764
Dividends
9
(2,000,000)
(1,500,000)
Retained earnings carried forward
6,450,182
6,991,894
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PANAZ LIMITED
BALANCE SHEET
AS AT
31 MARCH 2022
31 March 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
10
59,842
29,041
Tangible assets
11
712,013
762,878
771,855
791,919
Current assets
Stocks
12
3,436,379
3,304,034
Debtors
13
3,743,707
3,118,427
Cash at bank and in hand
2,012,044
4,114,289
9,192,130
10,536,750
Creditors: amounts falling due within one year
14
(3,343,649)
(2,922,333)
Net current assets
5,848,481
7,614,417
Total assets less current liabilities
6,620,336
8,406,336
Creditors: amounts falling due after more than one year
15
(1,275,000)
Provisions for liabilities
Deferred tax liability
17
150,154
119,442
(150,154)
(119,442)
Net assets
6,470,182
7,011,894
Capital and reserves
Called up share capital
19
20,000
20,000
Profit and loss reserves
6,450,182
6,991,894
Total equity
6,470,182
7,011,894
The financial statements were approved by the board of directors and authorised for issue on 15 December 2022 and are signed on its behalf by:
Mr R S Attard
Mr N Memon
Director
Director
Company Registration No. 01944865
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 12 -
1
Accounting policies
Company information
Panaz Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Bentley Wood Way, Network 65 Business Park, Hapton, Burnley, Lancashire, BB11 5ST.
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 £.
The financial statements have been prepared under the historical cost convention. 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 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares
;
-
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash
f
low and related notes and disclosures
;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Panaz Holdings Limited
. These consolidated financial statements are available from its registered office
, Bentley Wood Way, Network 65 Business Park, Burnley, Lancashire, BB11 5ST
.
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.
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.
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
20-33% straight line
1.5
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:
Short tem leasehold property
10% straight line
Plant & machinery
10-20% straight line
Office equipment
20% straight line
Motor vehicles
20% straight line
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
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible 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.
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.
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 14 -
1.7
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.
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.
1.8
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.
1.9
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.
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.
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 15 -
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.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies 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.
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 16 -
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.
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.
1.12
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.
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
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 17 -
1.16
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.
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.
The main areas of judgement are in relation to stock costing and valuations and useful lives of fixed assets.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
12,405,658
9,680,966
Europe
3,313,896
3,498,355
Rest of world
623,703
274,687
16,343,257
13,454,008
2022
2021
£
£
Other revenue
Royalty income
266,025
233,018
Grants received
80,790
601,812
Management Fees Receivable
128,659
-
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(177,026)
(166,161)
Government grants
(80,790)
(601,812)
Fees payable to the company's auditor for the audit of the company's financial statements
10,900
11,400
Depreciation of owned tangible fixed assets
208,190
187,386
Amortisation of intangible assets
7,779
6,598
Operating lease charges
467,151
349,297
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administration
41
39
Sales
15
15
Production
31
28
Total
87
82
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,594,215
2,280,387
Social security costs
332,972
278,151
Pension costs
68,845
68,882
2,996,032
2,627,420
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
210,033
239,379
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
93,921
86,340
Company pension contributions to defined contribution schemes
3,400
-
7
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
503
43,877
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 19 -
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
246,160
245,733
Adjustments in respect of prior periods
4,397
(9,746)
Total current tax
250,557
235,987
Deferred tax
Origination and reversal of timing differences
(7,007)
11,990
Changes in tax rates
37,719
Total deferred tax
30,712
11,990
Total tax charge
281,269
247,977
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
1,739,557
1,684,107
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
330,516
319,980
Tax effect of expenses that are not deductible in determining taxable profit
4,480
5,156
Tax effect of income not taxable in determining taxable profit
(2,244)
Group relief
(20,703)
(184)
Research and development tax credit
(68,550)
(66,009)
Under/(over) provided in prior years
4,397
(9,746)
Remeasurement of deferred tax for changes in expected tax rates
37,719
Fixed asset differences
(6,590)
1,024
Taxation charge for the year
281,269
247,977
9
Dividends
2022
2021
£
£
Final paid
2,000,000
1,500,000
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 20 -
10
Intangible fixed assets
Software
£
Cost
At 1 April 2021
36,948
Additions
38,580
At 31 March 2022
75,528
Amortisation and impairment
At 1 April 2021
7,907
Amortisation charged for the year
7,779
At 31 March 2022
15,686
Carrying amount
At 31 March 2022
59,842
At 31 March 2021
29,041
11
Tangible fixed assets
Short tem leasehold property
Plant & machinery
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2021
210,731
1,216,459
617,469
122,505
2,167,164
Additions
6,160
6,084
95,177
60,825
168,246
Group Transfers
(12,043)
(12,043)
At 31 March 2022
216,891
1,210,500
712,646
183,330
2,323,367
Depreciation and impairment
At 1 April 2021
90,389
725,684
505,701
82,512
1,404,286
Depreciation charged in the year
21,077
108,940
78,173
208,190
Group Transfers
(1,122)
(1,122)
At 31 March 2022
111,466
833,502
583,874
82,512
1,611,354
Carrying amount
At 31 March 2022
105,425
376,998
128,772
100,818
712,013
At 31 March 2021
120,342
490,775
111,768
39,993
762,878
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 21 -
12
Stocks
2022
2021
£
£
Raw materials and consumables
427,206
585,357
Finished goods and goods for resale
3,009,173
2,718,677
3,436,379
3,304,034
13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
3,285,583
2,825,521
Amounts owed by group undertakings
189,922
35,132
Other debtors
95,947
122,371
Prepayments and accrued income
172,255
135,403
3,743,707
3,118,427
14
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
16
225,000
Trade creditors
2,623,949
1,958,310
Corporation tax
110,369
85,728
Other taxation and social security
320,942
316,787
Other creditors
78,330
122,353
Accruals and deferred income
210,059
214,155
3,343,649
2,922,333
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
16
1,275,000
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 22 -
16
Loans and overdrafts
2022
2021
£
£
Bank loans
1,500,000
Payable within one year
225,000
Payable after one year
1,275,000
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Fixed asset timing differences
150,908
120,372
Short term timing differences
(754)
(930)
150,154
119,442
2022
Movements in the year:
£
Liability at 1 April 2021
119,442
Charge to profit or loss
30,712
Liability at 31 March 2022
150,154
18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
68,845
68,882
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.
19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
20,000
20,000
20,000
20,000
PANAZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
19
Share capital
(Continued)
- 23 -
20
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:
2022
2021
£
£
Within one year
201,031
245,560
Between two and five years
277,107
478,138
478,138
723,698
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Purchases
2022
2021
£
£
Entities over which the entity has control, joint control or significant influence
171,621
-
Other information
As permitted by FRS 102 the financial statements do not disclose transactions with the parent company and fellow subsidiaries where 100% of the voting rights are controlled within the group.
22
Directors' transactions
Included within other debtors due within one year are loans to directors amounting to £21,357 (2021 - £22,771). The maximum amount outstanding during the year was £22,771. The balance is repayable on demand.
23
Ultimate controlling party
The company is a wholly owned subsidiary of Panaz Holdings Limited, a company incorporated in England and Wales. Panaz Holdings Limited is controlled by Mr A J W Attard.
2022-03-31
2021-04-01
false
CCH Software
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Mr A J W Attard
Mrs P M Attard
Mr R S Attard
Mr R S Attard
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