REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Audited Financial Statements |
for the Year Ended 31 December 2022 |
for |
Ponsse UK Limited |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Audited Financial Statements |
for the Year Ended 31 December 2022 |
for |
Ponsse UK Limited |
Ponsse UK Limited (Registered number: SC165729) |
Contents of the Financial Statements |
for the Year Ended 31 December 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Independent Auditors' Report | 7 |
Profit & Loss Account | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 13 |
Notes to the Financial Statements | 14 |
Ponsse UK Limited |
Company Information |
for the Year Ended 31 December 2022 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants & Statutory Auditor |
26 High Street |
Annan |
Dumfries & Galloway |
DG12 6AJ |
Ponsse UK Limited (Registered number: SC165729) |
Strategic Report |
for the Year Ended 31 December 2022 |
The directors present their strategic report for the year ended 31 December 2022. |
REVIEW OF BUSINESS |
The directors are satisfied with the performance of the company in the financial year under review which continue the positive results of recent years, despite the twin issues of Covid-19 and Brexit. |
Turnover for the year fell to £25,806,394 (2021 - £28,109,594) due principally to reduced new machine sales although improvements in sales margins has led to gross profits for the year of £3,088,108 (2021 - £2,902,128). a continuing increase in both real and percentage terms. |
Overhead expenses rose to £2,842,204 from £2,381,677, whilst other operating income also rose to £56,757 (2021 - £24,241). Overall, this lead to to an operating profit of £302,661 (2021 - £544,692) which has been achieved despite the external issues affecting the company and its trade this year. |
Interest payable has increased to £293,440 (2021 £290,006) resulting in a pre-tax profit of £10,384 (2021 - £255,131). |
Going forward, the directors are confident that the strong financial position at the year end as reflected in the Balance Sheet stands the company in good stead for the future. The market continues to present challenges going forward, along with uncertainties over Covid-19 and the implications for the company of Brexit, which have undoubtedly caused issues (and will continue to do so). However, the directors feel that the company and its management are well placed to meet these demands, with the ongoing support of the Group as a whole. |
Ponsse UK Limited (Registered number: SC165729) |
Strategic Report |
for the Year Ended 31 December 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company's approach to the detection and management of risks and uncertainties is based on the corporate governance statement for the Group, available in full on the parent company website. https://www.ponsse.com/investors/corporate-info |
Risk management |
Risk management means the systematic procedures that are built into the management system, the purpose of which are to identify and assess the risks associated with operations and to prepare for them. Risk management is vital to ensuring and safeguarding the company’s economic operating conditions and performance. Risk management is a part of internal control, and so implementation of internal controls also promotes the implementation of risk management. Risk management should not be separated from internal control, since awareness of internal control practices is ultimately essential to risk prevention. |
The overall purpose of risk management processes is to support the achievement of the goals that are set out in the company’s strategy, to safeguard continuity of the company’s financial development and business operations, and to maintain and develop a comprehensive and pragmatic system for risk management and reporting. Risk management emphasises prevention: the purpose of risk management processes is to help identify risks pre-emptively, and to minimise the likelihood of their realisation. The risk management process also includes evaluation and follow-up to keep track of business risks that may have an impact on the company’s strategic and financial goals or the continuity of business operations. |
The risk management process |
A risk is any potential event or chain of events that manifests itself as uncertainty with regard to achieving the company’s objectives, or that threatens the continuity of business operations. A deviation from the set goal, i.e. the realisation of the risk, may be negative, but could also be positive. In other words, risks can be both threats and |
opportunities. Risks are an inevitable part of business, and profitable business performance often requires thoughtful risk-taking. Although risks cannot be avoided entirely, it is possible to prepare for the potential realisation of harmful risks. Risk management is part of normal, day-to-day business operation, with risk management practices based on the company’s values, and its strategic and financial goals. |
Decisions on the necessary measures for preventing and responding to identified risks are made on the basis of evaluations. Risk assessment in any given case is based on the potential impact and probability of the risk. The primary means of risk management are avoidance, reduction and transferral of risks. Risks can also be controlled, and their effects can be minimised. |
The key factors for effective risk management are |
- Realistic and timely assessment |
- Awareness: personnel must be aware of the principles of risk management so that they can act according to instructions; |
- Comprehensiveness: risk management is part of every activity, but risk management processes are present to a particularly high degree in the vital processes of operation. |
Risks are divided into four categories: strategic, operational, financial and accident-related risks. Strategic risk refers to the nature of the business operations, the choice of strategy, and the risk associated with the implementation of the strategy. If realised,strategic risks can significantly weaken the company’s operating conditions. Examples of strategic risks are risks relating to competition, or to the regulation of business activities. Strategic risks can be realised, for example, in the context of significant investments and other business-related strategic decisions. |
Operational risks relate to the company’s internal processes, such as company management or personnel, or the company’s business network and systems. If an operational risk materialises, it lowers the efficiency of the company’s operations, and consequently harms the results and profitability of the company’s operations. |
Financial risks include risks relating to currencies, interest rates, credit, liquidity and capital management. The goal of financial risk management is to safeguard financial performance, cash flow, equity and liquidity from unfavourable fluctuations in financial markets. |
Ponsse UK Limited (Registered number: SC165729) |
Strategic Report |
for the Year Ended 31 December 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES (contd.) |
Accident-related risks are a more concrete threat to the company’s operations than the aforementioned types of risk. The emphasis in accident-related risk management and avoidance is on identifying risks. Accident-related risk factors include risks to work health and safety, environmental risks and property damage. Another area of emphasis with regard to this type of risk is prevention. A comprehensive insurance programme has been prepared for accident-related risks, and efforts are made to pre-emptively prevent risks through a safety and policy and guidelines, and by ensuring the safety of working methods and tools. The company is very attentive to hazardous situations, and is quick to respond to them. Increased attention is now being given to personnel safety matters. All accidents and near-misses are recorded in the monitoring system, and the necessary measures are taken to prevent hazardous situations. The company’s goal is an accident-free working environment. Accident-related risks are regularly assessed by internal audits for the entire personnel. |
Risk management organisation and division of responsibilities |
The parent company’s Board of Directors and management have the primary responsibility for defining the risk management policy and for organising risk management. They reinforce and define the risk management principles and risk management policy for the group as a whole, and also assesses the effectiveness of risk management. The Board of Directors also oversees the implementation of risk management policies and processes. However, the risks to business continuity are assessed regularly at all levels of Ponsse Group. Each employee of the group is required to contribute to anticipating risks and preventing them from materialising, for example by reporting risks to their supervisor. |
The risk management process includes systematic risk mapping and risk assessment for each type of operation and unit, and making sure that they are reflected in the company’s risk management plan. Risk management is systematically implemented and monitored as part of the daily business. The company promotes its risk management by increasing awareness of the significance of risk management and supporting shared risk management projects of the functions. |
Each of the subsidiaries independently carry out risk management in accordance with Ponsse Group’s risk management policy and guidelines, whilst every employee is obliged to take action to prevent risks, to comply with the company’s operating instructions, and to report any risks they detect to their supervisor. |
SECTION 172(1) STATEMENT |
The directors acknowledge their responsibilities under section 172 of the Companies Act and consider that they have successfully fulfilled their duties in this regard for the year under review, by considering the interests of all stakeholders when contemplating the consequences of all decisions taken at board level and by promoting the overall success of the company in doing so. |
ON BEHALF OF THE BOARD: |
Ponsse UK Limited (Registered number: SC165729) |
Report of the Directors |
for the Year Ended 31 December 2022 |
The directors present their report with the financial statements of the company for the year ended 31 December 2022. |
PRINCIPAL ACTIVITY |
Ponsse UK Limited is a company limited by shares, incorporated and domiciled in Scotland, with its principal place of business at 4 Annan Business Park, Annan. The principal activity of the company in the year under review was that of the sale, service and repair of forestry machines. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2022. |
FUTURE DEVELOPMENTS |
The company has no specific plans with regard to future developments. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | 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. |
Ponsse UK Limited (Registered number: SC165729) |
Report of the Directors |
for the Year Ended 31 December 2022 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
Independent Auditors' Report to the Members of |
Ponsse UK Limited |
Opinion |
We have audited the financial statements of Ponsse UK Limited (the 'company') for the year ended 31 December 2022 which comprise the Profit & Loss Account, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Auditors' Report thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Independent Auditors' Report to the Members of |
Ponsse UK Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- the financial statements are not in agreement with the accounting records and the returns; or |
- certain disclosures of directors remuneration specified by law are not made; or |
- we have not received all the information and explanations we require for our audit; |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Independent Auditors' Report to the Members of |
Ponsse UK Limited |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue 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: |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the company through discussions with directors and other management; |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- reading the minutes of meetings of those charged with governance; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report. |
Independent Auditors' Report to the Members of |
Ponsse UK Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' 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. |
for and on behalf of |
Chartered Accountants & Statutory Auditor |
26 High Street |
Annan |
Dumfries & Galloway |
DG12 6AJ |
Ponsse UK Limited (Registered number: SC165729) |
Profit & Loss Account |
for the Year Ended 31 December 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
2,842,204 | 2,381,677 |
245,904 | 520,451 |
Other operating income |
OPERATING PROFIT | 5 |
Interest receivable and similar income |
303,824 | 545,137 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
Ponsse UK Limited (Registered number: SC165729) |
Balance Sheet |
31 December 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
CURRENT ASSETS |
Stocks | 9 |
Debtors | 10 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 14 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Retained earnings | 16 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Ponsse UK Limited (Registered number: SC165729) |
Statement of Changes in Equity |
for the Year Ended 31 December 2022 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2021 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2021 |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements |
for the Year Ended 31 December 2022 |
1. | STATUTORY INFORMATION |
Ponsse UK Limited is a private company, limited by shares, registered in Scotland. The company's registered number is SC165729 and its registered office can be found on the company information page. |
The presentation currency of the financial statements is the Pound Sterling (£) which is the functional currency of the company. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The directors consider it appropriate to prepare the financial statements on the going concern basis. |
The company are in constant communication with management in the parent company and in fellow subsidiaries to utilise group resources and facilities, and to secure the future viability of operations. Should this support be withdrawn or unavailable, the company may be unable to realise its assets and discharge its liabilities in the normal course of business, whilst adjustments would have to be made to reduce the value of assets to their recoverable amounts and to provide for any further liabilities which may arise. |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 3.17(d); |
• | the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23; |
• | the requirement of paragraph 33.7. |
Significant judgements and estimates |
In preparing the financial statements, management are required to make judgements, estimates and assumptions based on historical experience and other relevant factors. Actual results may differ from these best estimates, which are reviewed on an ongoing basis. |
The items in the financial statements where these judgements are required (and the factors in play) include trade debtors (likelihood of non-payment), stock (impairment losses, particularly on trade-in machines), fixed assets (depreciation rates) and contingent liabilities (warranty claims). |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover represents net sales of goods and services, excluding value added tax, recognised when the company becomes entitled to the income and when the outcome of the transaction can be reliably measured. |
For turnover involving the sale of goods, this occurs when: |
- the company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
- the company no longer retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
- it is probable that the economic benefits associated with the transaction will flow to the company; and |
- the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Specifically, new and used machine sales are recognised when the machine arrives in the UK and when the company receives invoicing details from the customer/finance company (whichever is later), whilst parts sales are recognised at the successful completion and fulfilment of the order. |
For turnover involving the rendering of services, this occurs by reference to the stage of completion of the transaction at the end of the reporting period and where the outcome of a transaction can be estimated reliably, with the following conditions being satisfied: |
- the amount of revenue can be measured reliably; |
- it is probable that the economic benefits associated with the transaction will flow to the entity; |
- the stage of completion of the transaction at the end of the reporting period can be measured reliably; and |
- the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. |
Specifically, service sales are recognised at the completion of the service work whilst sales under service agreements are reflected evenly over the term of the contract. |
Tangible fixed assets |
Tangible assets are recognised at acquisition cost less accumulated depreciation and impairment losses. |
Expenses incurred from the direct acquisition of tangible assets are included in the acquisition. The acquisition cost of a self-manufactured asset item includes material expenses, direct expenses incurred for employee benefits and other direct expenses incurred for the completion of the tangible assets for the intended use. |
If tangible assets consist of several parts whose estimated useful lives differ, each part is treated as a separate item. In such a case, all replacement costs are activated and any remaining book value in connection with replacement is de-recognised. In any other cases, costs arising at a later date are included in the book value of tangible assets only if it is likely that the future economic benefits related to the item will benefit the company and the item's acquisition cost can be reliably defined. Other repair and maintenance costs are recognised through profit or loss as they are realised. |
Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life. |
Freehold property | - 5% on cost |
Plant and machinery | - 20% on cost |
Fixtures and fittings | - 20% on cost |
Motor vehicles | - 20% on cost |
Factors such as a change in how an asset is used, significant unexpected wear and tear, technological advancement, and changes in market prices may indicate that the residual value or useful life of an asset has changed since the most recent annual reporting date. If such indicators are present, the company will review its previous estimates and, if current expectations differ, amend the residual value, depreciation method or useful life, accounting for such revisions as a change in an accounting estimate in accordance with FRS 102. |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Government grants |
Government grants are recognised when there is reasonable assurance that the entity will comply with the conditions attaching to the grant and the grant will be received. |
A grant that does not impose specified future performance-related conditions on the recipient is recognised in income when the grant proceeds are received or receivable. A grant that imposes specified future performance-related conditions on the recipient is recognised in income only when those conditions are met. |
Grants are classified as either as a grant relating to revenue or a grant relating to assets. Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items (cost is calculated on the weighted-average basis for parts stock and on the actual basis for new and second hand machines). |
Financial instruments |
The company has no complex financial instruments but does hold basic financial instruments of; cash at bank, debtors and creditors. |
Cash and cash equivalents comprise cash at bank and on hand, foreign currency on hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. A bank overdraft would be shown within current liabilities. |
Trade and other debtors are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less losses for bad debts except where the effective of discounting would be immaterial. In such cases, trade and other debtors are stated at cost less losses for bad debts. |
Trade and other creditors are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate unless the effect of discounting would be immaterial. In such cases, trade and other creditors are stated at cost. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit & Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Any monetary assets or liabilities denominated in a foreign currency at balance sheet date are translated at the exchange rate in force at the year end. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Employee benefits |
The total cost of employee benefits to which employees have become entitled as a result of service rendered to the entity during the reporting period are recognised and charged to the profit and loss account in the period to which they relate. |
Provision for liabilities |
A provision is initially recognised when there is an obligation at the balance sheet date as the result of a past event, it is probable that there will be the transfer of funds in settlement and the amount of the obligation can be estimated reliably. The provision is subsequently measured by placing a charge against the provision only for expenditure for which the provision was originally recognised. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
2022 | 2021 |
£ | £ |
An analysis of turnover by geographical market is given below: |
2022 | 2021 |
£ | £ |
United Kingdom |
Europe |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
4. | EMPLOYEES AND DIRECTORS |
2022 | 2021 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2022 | 2021 |
Employees (excluding directors) |
2022 | 2021 |
£ | £ |
Directors' remuneration |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2022 | 2021 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) |
Current auditors' remuneration |
Previous auditors' remuneration |
Foreign exchange differences |
Government grants |
Stock impairment losses recognised in Profit & Loss Account |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2022 | 2021 |
£ | £ |
Interest paid to ultimate parent company |
Other interest |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2022 | 2021 |
£ | £ |
Current tax: |
UK corporation tax |
Overprovision in prior year | (1,058 | ) | (1,320 | ) |
Total current tax |
Deferred tax | ( |
) |
Tax on profit |
UK corporation tax has been charged at 19% (2021 - 19%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2022 | 2021 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2021 - |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | - |
Depreciation in excess of capital allowances | - |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Deferred tax | 18,957 | (5,111 | ) |
Tax overprovided in the current year | 23,951 | 1,675 |
Total tax charge | 36,649 | 68,569 |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
8. | TANGIBLE FIXED ASSETS |
Fixtures |
Freehold | Plant and | and | Motor |
property | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2022 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Freehold property relates to the company's new premises, construction of which was completed in 2018. It includes the land itself which was acquired for £117,550 initially under a long term ground lease with an option to purchase following on from the completion of the building work thereon, which has been exercised. |
9. | STOCKS |
2022 | 2021 |
£ | £ |
Raw materials and consumables |
Finished goods |
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Prepayments |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade creditors |
Tax | ( |
) |
Social security and other taxes |
VAT |
Amounts due to group undertakings |
Accrued expenses |
12. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2022 | 2021 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
13. | SECURED DEBTS |
Nordea Bank Finland Plc hold a guarantee & indemnity dated September 2013 from the parent company in relation to the company's liabilities. |
14. | PROVISIONS FOR LIABILITIES |
2022 | 2021 |
£ | £ |
Deferred tax |
Accelerated capital allowances | 98,016 | 79,059 |
Deferred |
tax |
£ |
Balance at 1 January 2022 |
Charge to Profit & Loss Account during year |
Balance at 31 December 2022 |
At the financial year end, the net reversal of deferred tax liabilities expected to occur during the financial year ending 31 December 2023 is estimated at £18,895 on the assumption of no anticipated capital disposals. |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
Ordinary | £1 | 50,000 | 50,000 |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
15. | CALLED UP SHARE CAPITAL - continued |
The ordinary shares currently in issue rank equally in terms of all rights, preferences and restrictions, including voting, distribution of dividends and repayment of capital. |
16. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2022 |
Deficit for the year | ( |
) |
At 31 December 2022 |
17. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme, the assets of which are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable to the fund and amounted to £54,293 in the year (2021 - £49,405). |
18. | ULTIMATE PARENT COMPANY |
The directors regard Ponsse OYJ, a company incorporated in Finland, as the ultimate parent company and the ultimate controlling party, by virtue of its ownership of the company's entire share capital. |
According to the register kept by the company Ponsse OYJ has a 100% interest in the equity capital of Ponsse UK Limited at 31 December 2022. Copies of the parent's consolidated financial statements may be obtained from the registered office of Ponsse OYJ, 74200 Vierema, Finland. |
19. | CAPITAL COMMITMENTS |
2022 | 2021 |
£ | £ |
Contracted but not provided for in the |
financial statements |
20. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Ponsse UK Limited (Registered number: SC165729) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
21. | SHARE-BASED PAYMENT TRANSACTIONS |
The parent company introduced a new share-based incentive scheme in 2018 for key employees within the group, involving shares in the parent company. |
This involves those qualifying employees from the company firstly purchasing shares in the parent company at market value and subsequently receiving the equivalent amount of free shares in the parent as a bonus incentive, with Ponsse UK Limited meeting all taxes arising on the award of this employee bonus. Shares awarded as bonuses may not be transferred by the qualifying employees during the restriction period ending on 12 December 2021, whilst the qualifying employees must remain within the employment of the group until that date to receive full entitlement of the shares awarded. |
The award in 2018 saw four company employees receive a total of 351 parent company shares valued at £9,171. The cost of these shares (and the associated tax liability thereon which will be met by the company) has been spread evenly over the course of the three-year restriction period ending in the prior financial year. Consequently, no cost has been reflected in this year's profit and loss account (2021 - £3,900). |