Company Registration No. 03497831 (England and Wales)
PANKL RACING SYSTEMS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
Richard Anthony
Chartered Accountants and Registered Auditors
PANKL RACING SYSTEMS UK LIMITED
COMPANY INFORMATION
Directors
Mr G Sarkoezi
Mr N Passler
(Appointed 1 November 2015)
Company number
03497831
Registered office
Telford Road
Bicester
Oxfordshire
OX26 4LD
Auditors
Richard Anthony
Gadd House
Arcadia Avenue
Finchley
London
N3 2JU
PANKL RACING SYSTEMS UK LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 5
Profit and loss account
6
Balance sheet
7
Statement of changes in equity
8
Statement of cash flows
9
Notes to the financial statements
10 - 22
PANKL RACING SYSTEMS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
- 1 -
The directors present the strategic report and financial statements for the year ended 31 December 2015.
Fair review of the business
The directors are satisfied with the performance and results for the year.
The Directors and Senior Management monitor management information on a regular basis to ensure that they are aware of trends and influences on profitability. They present to the European Group Board the monthly results, and the key performance indicators include turnover, EBIT, operative cash flow and relevant statistical information.
The turnover has decreased by 2.6% which in turn has seen a marginal decrease of the gross profit margin which has fallen by 0.4%.
Principal risks and uncertainties
The economic uncertainty, both globally and more specifically in European jurisdictions, continues to pose a risk in terms of the liquidity risk with clients. The directors manage this risk by managing the debtor book to ensure prompt payments.
Any changes in Motor Racing regulations have both direct and indirect effect on the company and indeed the group’s performance. Following the engine regulation changes in F1 racing in the prior year that saw changes in the company's sales, the current year saw very little changes in the regulations. Accordingly, there was very little effect in the company's performance for the year compared to the prior year.
Development and performance
Due to the nature of the company's activity, the company continues to engage in research and development in connection with the precision engineering activities to ensure the company maintains its competitive position in the marketplace and claims appropriate research and development tax credits.
The company has plans to grow the business organically through continuous innovation and development of its products and services. By continuing to broaden, innovate and enhance its products, the directors seek to manage the ongoing development of the business and maintain strong relationships with key clients.
Key performance indicators
The Board at company and group levels continued to use specific key performance indicators to monitor performance and control assets. The performance of the company is monitored both on a stand-alone basis and from a Group perspective in terms of the overall contribution to group profits.
Mr N Passler
Director
25 February 2016
PANKL RACING SYSTEMS UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2015.
Principal activities
The principal activity of the company continued to be that of precision engineers, principally focused on motorsport components.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Seidel
(Resigned 1 November 2015)
Mr G Sarkoezi
Mr N Passler
(Appointed 1 November 2015)
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditors
In accordance with the company's articles, a resolution proposing that Richard Anthony be reappointed as auditors of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and accounting estimates that are reasonable and prudent; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
PANKL RACING SYSTEMS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 3 -
Statement of disclosure to auditors
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 auditors are 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 auditors are aware of that information.
On behalf of the board
Mr N Passler
Director
25 February 2016
PANKL RACING SYSTEMS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PANKL RACING SYSTEMS UK LIMITED
- 4 -
We have audited the financial statements of Pankl Racing Systems UK Limited for the year ended 31 December 2015 set out on pages 6 to 22. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements: • give a true and fair view of the state of the company's affairs as at 31 December 2015 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.
-
give a true and fair view of the state of the company's affairs as at 31 December 2015 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
true
PANKL RACING SYSTEMS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PANKL RACING SYSTEMS UK LIMITED
- 5 -
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors' remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Michael Barnett BA (Econ) FCA (Senior Statutory Auditor)
for and on behalf of Richard Anthony
1 March 2016
Chartered Accountants
Statutory Auditor
Gadd House
Arcadia Avenue
Finchley
London
N3 2JU
PANKL RACING SYSTEMS UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2015
- 6 -
2015
2014
Notes
£
£
Turnover
3
7,859,400
8,072,824
Cost of sales
(5,303,701)
(5,415,632)
Gross profit
2,555,699
2,657,192
Administrative expenses
(2,158,066)
(2,142,510)
Other operating income
83,681
57,338
Operating profit
4
481,314
572,020
Interest receivable and similar income
7
1,942
23
Interest payable and similar charges
8
(50,411)
(83,469)
Profit before taxation
432,845
488,574
Taxation
9
(14,333)
(87,504)
Profit for the financial year
22
418,512
401,070
Total comprehensive income for the year
418,512
401,070
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PANKL RACING SYSTEMS UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2015
31 December 2015
- 7 -
2015
2014
Notes
£
£
£
£
Fixed assets
Goodwill
10
737,076
797,658
Tangible assets
11
875,872
985,927
1,612,948
1,783,585
Current assets
Stocks
13
1,783,506
1,660,199
Debtors
14
1,486,296
1,254,842
Cash at bank and in hand
781,491
571,238
4,051,293
3,486,279
Creditors: amounts falling due within one year
15
(1,366,118)
(1,381,038)
Net current assets
2,685,175
2,105,241
Total assets less current liabilities
4,298,123
3,888,826
Creditors: amounts falling due after more than one year
16
(1,886,800)
(1,898,712)
Provisions for liabilities
18
(88,690)
(85,993)
Net assets
2,322,633
1,904,121
Capital and reserves
Called up share capital
21
510,000
510,000
Profit and loss reserves
22
1,812,633
1,394,121
Total equity
2,322,633
1,904,121
The financial statements were approved by the board of directors and authorised for issue on 25 February 2016 and are signed on its behalf by:
Mr G Sarkoezi
Mr N Passler
Director
Director
Company Registration No. 03497831
PANKL RACING SYSTEMS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
- 8 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2014
510,000
993,051
1,503,051
Period ended 31 December 2014:
Profit and total comprehensive income for the year
-
401,070
401,070
Balance at 31 December 2014
510,000
1,394,121
1,904,121
Period ended 31 December 2015:
Profit and total comprehensive income for the year
-
418,512
418,512
Balance at 31 December 2015
510,000
1,812,633
2,322,633
PANKL RACING SYSTEMS UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
- 9 -
2015
2014
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
486,600
844,126
Interest paid
(50,404)
(83,469)
Income taxes refunded/(paid)
27,836
(173,629)
Net cash inflow from operating activities
464,032
587,028
Investing activities
Purchase of tangible fixed assets
(308,998)
(480,370)
Proceeds on disposal of tangible fixed assets
65,196
1,000
Interest received
1,942
23
Net cash used in investing activities
(241,860)
(479,347)
Financing activities
Repayment of borrowings
(11,919)
(14,522)
Net cash used in financing activities
(11,919)
(14,522)
Net increase in cash and cash equivalents
210,253
93,159
Cash and cash equivalents at beginning of year
571,238
478,079
Cash and cash equivalents at end of year
781,491
571,238
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
- 10 -
1
Accounting policies
Company information
Pankl Racing Systems UK Limited is a
company
limited by shares
incorporated in England and Wales.
The registered office is
Telford Road, Bicester, Oxfordshire, OX26 4LD.
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 on the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
These financial statements for the year ended 31 December 2015
are the
first
financial statements of Pankl Racing Systems UK Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was
1 January 2014
. The reported financial position and financial performance for the previous period are not affected by the transition to FRS 102.
1.2
Going concern
A
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.
, 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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Intangible fixed assets - goodwill
Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
1
Accounting policies
(Continued)
- 11 -
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.
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:
Land and buildings Leasehold
20% on cost
Plant and machinery
17%- 33.33% on cost
Fixtures, fittings & equipment
20%-50% on cost
Motor vehicles
20% on cost
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 recognised in the profit and loss account.
1.6
Impairment of fixed assets
At each reporting 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) prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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. Stocks held for distribution at no or nominal consideration are measured at cost, adjusted where applicable for any loss of service potential.
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks
held for distribution at no or nominal consideration are measured at cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
1
Accounting policies
(Continued)
- 12 -
1.8
Cash and cash equivalents
Cash and cash equivalents 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 statement of financial position 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.
Financial instruments are recognised in the company's statement of financial position 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 trade and other receivables 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.
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 publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors , loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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.
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.
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
1
Accounting policies
(Continued)
- 13 -
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 trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future receipts discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. Accounts 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 payables 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.
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.
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 direct issue 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.
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
1
Accounting policies
(Continued)
- 14 -
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.
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
The accounting policy in respect of deferred tax has been changed to reflect the requirements of FRS19 - Deferred tax. Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
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.
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
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income 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 asset are consumed.
including
any lease incentives received, are charged to income 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 asset are consumed.
1.15
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
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.
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 15 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2015
2014
£
£
Turnover
7,859,400
8,072,824
Other significant revenue
Interest income
1,942
23
Turnover analysed by geographical market
2015
2014
£
£
United Kingdom
2,724,459
2,406,591
European Community
3,727,536
4,316,365
Other
1,407,405
1,349,868
7,859,400
8,072,824
4
Operating profit
2015
2014
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
131,430
143,123
Fees payable to the company's auditors for the audit of the company's financial statements
17,658
17,500
Depreciation of owned tangible fixed assets
391,948
317,643
Profit on disposal of tangible fixed assets
(38,092)
(1,000)
Amortisation of intangible assets
60,582
60,582
Cost of stocks recognised as an expense
1,417,140
1,455,383
Operating lease charges
158,727
137,105
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2015
2014
Number
Number
Administration staff
15
19
Direct labour
54
56
69
75
Their aggregate remuneration comprised:
2015
2014
£
£
Wages and salaries
2,054,254
2,266,213
Social security costs
202,722
220,179
Pension costs
45,448
14,308
2,302,424
2,500,700
Redundancy payments in the year amount to £25,681 (2014 - £-).
6
Directors' remuneration
2015
2014
£
£
Remuneration for qualifying services
28,285
73,552
Company pension contributions to defined contribution schemes
840
210
29,125
73,762
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2014 - 1).
7
Interest receivable and similar income
2015
2014
£
£
Interest income
Interest on bank deposits
396
23
Other interest income
1,546
-
Total income
1,942
23
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
7
Interest receivable and similar income
(Continued)
- 17 -
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
396
23
8
Interest payable and similar charges
2015
2014
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
50,404
83,469
Other finance costs:
Losses on financial instruments measured at fair value through profit or loss
7
-
50,411
83,469
9
Taxation
2015
2014
£
£
Current tax
UK corporation tax on profits for the current period
85,088
54,644
Adjustments in respect of prior periods
(73,452)
(10,834)
Total current tax
11,636
43,810
Deferred tax
Origination and reversal of timing differences
2,697
43,694
Total tax charge
14,333
87,504
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
9
Taxation
(Continued)
- 18 -
The charge for the year can be reconciled to the profit per the profit and loss account as follows:
2015
2014
£
£
Profit before taxation
432,845
488,574
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2014: 20.00%)
86,569
97,715
Tax effect of expenses that are not deductible in determining taxable profit
6,332
6,898
Permanent capital allowances in excess of depreciation
(7,886)
(49,969)
Under/(over) provided in the year
(73,452)
(10,834)
Tax at marginal rate
73
-
Deferred tax movement for the year
2,697
43,694
Tax expense for the year
14,333
87,504
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2015 and 31 December 2015
1,223,950
Amortisation and impairment
At 1 January 2015
426,292
Amortisation charged for the year
60,582
At 31 December 2015
486,874
Carrying amount
At 31 December 2015
737,076
At 31 December 2014
797,658
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 19 -
11
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2015
522,615
3,592,334
419,241
34,302
4,568,492
Additions
17,147
233,700
20,580
37,571
308,998
Disposals
-
(234,955)
(21,710)
(19,987)
(276,652)
At 31 December 2015
539,762
3,591,079
418,111
51,886
4,600,838
Depreciation and impairment
At 1 January 2015
431,602
2,760,035
359,910
31,019
3,582,566
Depreciation charged in the year
45,476
311,075
32,222
3,175
391,948
Eliminated in respect of disposals
-
(207,851)
(21,710)
(19,987)
(249,548)
At 31 December 2015
477,078
2,863,259
370,422
14,207
3,724,966
Carrying amount
At 31 December 2015
62,684
727,820
47,689
37,679
875,872
At 31 December 2014
91,013
832,299
59,332
3,283
985,927
12
Financial instruments
2015
2014
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,342,336
1,128,014
Carrying amount of financial liabilities
Measured at amortised cost
3,113,148
3,157,748
13
Stocks
2015
2014
£
£
Raw materials and consumables
883,208
775,560
Work in progress
597,617
490,815
Finished goods and goods for resale
302,681
393,824
1,783,506
1,660,199
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 20 -
14
Debtors
2015
2014
Amounts falling due within one year:
£
£
Trade debtors
882,589
674,420
Corporation tax recoverable
55,000
65,000
Amounts due from fellow group undertakings
426,564
425,215
Other debtors
62,404
36,298
Prepayments and accrued income
59,739
53,909
1,486,296
1,254,842
Trade debtors disclosed above are measured at amortised cost.
15
Creditors: amounts falling due within one year
2015
2014
Notes
£
£
Trade creditors
522,715
551,540
Amount due to parent undertaking
491,914
542,806
Amounts due to fellow group undertakings
-
10,693
Corporation tax
84,116
54,644
Other taxation and social security
55,654
67,358
Other creditors
8,279
-
Accruals and deferred income
203,440
153,997
1,366,118
1,381,038
16
Creditors: amounts falling due after more than one year
2015
2014
Notes
£
£
Loans and overdrafts
17
1,886,800
1,898,712
17
Loans and overdrafts
2015
2014
£
£
Other loans
1,886,800
1,898,712
Payable after one year
1,886,800
1,898,712
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 21 -
18
Provisions for liabilities
2015
2014
Notes
£
£
Deferred tax liabilities
19
88,690
85,993
88,690
85,993
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2015
2014
Balances:
£
£
Accelerated capital allowances
88,690
85,993
2015
Movements in the year:
£
Liability at 1 January 2015
85,993
Charge to profit or loss
2,697
Liability at 31 December 2015
88,690
20
Retirement benefit schemes
Defined contribution schemes
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.
The charge to profit and loss in respect of defined contribution schemes was £45,448 (2014 - £14,308).
21
Share capital
2015
2014
£
£
Ordinary share capital
Authorised
510,000 Ordinary of £1 each
510,000
510,000
Issued and fully paid
510,000 Ordinary of £1 each
510,000
510,000
22
Reserves
PANKL RACING SYSTEMS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2015
- 22 -
23
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company in respect of the three properties it operates from with lease terms ranging from 15 years for one property (expiring 2023) to 3 years each for the other two properties (expiring 2018).
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, who are also directors, is as follows.
2015
2014
£
£
Aggregate compensation
29,125
73,762
No guarantees have been given or received.
25
Cash generated from operations
2015
2014
£
£
Profit for the year after tax
418,512
401,070
Adjustments for:
Taxation charged
14,333
87,504
Finance costs
50,411
83,469
Investment income
(1,942)
(23)
Gain on disposal of tangible fixed assets
(38,092)
(1,000)
Amortisation and impairment of intangible assets
60,582
60,582
Depreciation and impairment of tangible fixed assets
391,948
317,643
Movements in working capital:
(Increase)/decrease in stocks
(123,307)
386,804
(Increase) in debtors
(220,152)
(49,333)
(Decrease) in creditors
(65,693)
(442,590)
Cash generated from operations
486,600
844,126
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