Company Registration No. 08977682 (England and Wales)
PARRIS TRACTORS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
PARRIS TRACTORS LIMITED
COMPANY INFORMATION
Directors
Mr A P Parris
Mr R A J Parris
Mrs S M Parris
Mrs P J Parris
Company number
08977682
Registered office
Ash House
Cook Way
Bindon Road
Taunton
Somerset
TA2 6BJ
Auditor
Lentells Limited
Ash House
Cook Way
Bindon Road
Taunton
Somerset
TA2 6BJ
PARRIS TRACTORS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
PARRIS TRACTORS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 1 -
The directors present the strategic report for the year ended 31 March 2019.
Fair review of the business
The year ended 31 March 2019 has been a successful year for the business despite the challenges the sector has faced due to the uncertainty surrounding Brexit. Export sales have seen a reduction this year, not only as a result of currently fluctuations, but also competition from manufacturers abroad is causing overseas trading to become more difficult.
The company continues to monitor and control its costs.
Principal risks and uncertainties
The main financial risk that the company faces is the value of sterling against foreign currencies as this has a significant impact on both sales and margins. The uncertainties of Brexit facing the agricultural sector is having an impact on sales and pricing of new machinery and this in turn affects the supply of second hand machinery into the marketplace.
Key performance indicators
Beyond monitoring market prices and demand it is difficult to set KPI’s that appropriately monitor these risks and uncertainties.
Mr R A J Parris
Director
20 December 2019
PARRIS TRACTORS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2019
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2019.
Principal activities
The principal activity of the company continued to be that of tractor trading.
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 P Parris
Mr R A J Parris
Mrs S M Parris
Mrs P J Parris
Results and dividends
The results for the year are set out on page 6.
Ordinary dividends were paid amounting to £8,000. The directors do not recommend payment of a final dividend.
Auditor
We have notified Lentells Limited that they will not be reappointed as auditor of the company. The appointment of a new auditor will be arranged in the year.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr R A J Parris
Director
20 December 2019
PARRIS TRACTORS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2019
- 3 -
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.
PARRIS TRACTORS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PARRIS TRACTORS LIMITED
- 4 -
Opinion
We have audited the financial statements of Parris Tractors Limited (the 'company') for the year ended 31 March 2019 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2019 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.
We draw attention to note 21 to the financial statements which describes the uncertainty relating to an ongoing VAT enquiry. Our opinion is not qualified in respect of this matter.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
PARRIS TRACTORS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PARRIS TRACTORS LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of 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 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
P A Stallard FCA (Senior Statutory Auditor)
for and on behalf of Lentells Limited
20 December 2019
Chartered Certified Accountants
Statutory Auditors
Ash House
Cook Way
Bindon Road
Taunton
Somerset
TA2 6BJ
PARRIS TRACTORS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2019
- 6 -
Year
Year
ended
ended
31 March
31 March
2019
2018
Notes
£
£
Turnover
3
26,377,754
28,879,889
Cost of sales
(25,319,504)
(27,205,930)
Gross profit
1,058,250
1,673,959
Administrative expenses
(559,899)
(587,058)
Operating profit
4
498,351
1,086,901
Interest payable and similar expenses
7
(13,879)
(12,441)
Profit before taxation
484,472
1,074,460
Tax on profit
8
(130,050)
(241,460)
Profit for the financial year
354,422
833,000
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PARRIS TRACTORS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2019
- 7 -
Year
Year
ended
ended
31 March
31 March
2019
2018
£
£
Profit for the year
354,422
833,000
Other comprehensive income
-
-
Total comprehensive income for the year
354,422
833,000
PARRIS TRACTORS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2019
31 March 2019
- 8 -
2019
2018
Notes
£
£
£
£
Fixed assets
Goodwill
10
1,150,000
1,350,000
Tangible assets
11
282,922
327,224
1,432,922
1,677,224
Current assets
Stocks
13
5,406,372
4,234,242
Debtors
14
3,381,513
3,160,959
Cash at bank and in hand
12,056
16,209
8,799,941
7,411,410
Creditors: amounts falling due within one year
15
(8,242,669)
(7,436,445)
Net current assets/(liabilities)
557,272
(25,035)
Total assets less current liabilities
1,990,194
1,652,189
Provisions for liabilities
17
(53,756)
(62,173)
Net assets
1,936,438
1,590,016
Capital and reserves
Called up share capital
20
34
34
Profit and loss reserves
1,936,404
1,589,982
Total equity
1,936,438
1,590,016
The financial statements were approved by the board of directors and authorised for issue on 20 December 2019 and are signed on its behalf by:
Mr R A J Parris
Director
Company Registration No. 08977682
PARRIS TRACTORS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2019
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2017
34
776,982
777,016
Year ended 31 March 2018:
Profit and total comprehensive income for the year
-
833,000
833,000
Dividends
9
-
(20,000)
(20,000)
Balance at 31 March 2018
34
1,589,982
1,590,016
Period ended 31 March 2019:
Profit and total comprehensive income for the period
-
354,422
354,422
Dividends
9
-
(8,000)
(8,000)
Balance at 31 March 2019
34
1,936,404
1,936,438
PARRIS TRACTORS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2019
- 10 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
404,728
629,543
Interest paid
(13,879)
(12,441)
Income taxes paid
(217,692)
(171,407)
Net cash inflow from operating activities
173,157
445,695
Investing activities
Purchase of tangible fixed assets
(293,550)
(300,250)
Proceeds on disposal of tangible fixed assets
319,500
169,750
Net cash generated from/(used in) investing activities
25,950
(130,500)
Financing activities
Dividends paid
(8,000)
(20,000)
Net cash used in financing activities
(8,000)
(20,000)
Net increase in cash and cash equivalents
191,107
295,195
Cash and cash equivalents at beginning of year
(1,306,101)
(1,601,296)
Cash and cash equivalents at end of year
(1,114,994)
(1,306,101)
Relating to:
Cash at bank and in hand
12,056
16,209
Bank overdrafts included in creditors payable within one year
(1,127,050)
(1,322,310)
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
- 11 -
1
Accounting policies
Company information
Parris Tractors Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Ash House, Cook Way, Bindon Road, Taunton, Somerset, TA2 6BJ.
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, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
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.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
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.
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
10% reducing balance
Motor vehicles
25% reducing balance
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.
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 the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 13 -
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.
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.
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though 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.
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.
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
1
Accounting policies
(Continued)
- 15 -
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
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 are included in the profit and loss account for the period.
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.
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 16 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
Tractor and machinery sales
26,098,448
28,515,186
Other sales
279,306
364,703
26,377,754
28,879,889
2019
2018
£
£
Turnover analysed by geographical market
UK
13,511,374
12,841,873
Europe
9,248,716
8,257,552
Rest of the world
3,617,664
7,780,464
26,377,754
28,879,889
4
Operating profit
2019
2018
Operating profit for the period is stated after charging/(crediting):
£
£
Exchange losses
4,435
-
Fees payable to the company's auditor for the audit of the company's financial statements
8,370
8,450
Depreciation of owned tangible fixed assets
31,565
21,145
Profit on disposal of tangible fixed assets
(13,213)
(10,614)
Amortisation of intangible assets
200,000
200,000
Cost of stocks recognised as an expense
24,877,242
26,727,602
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £4,435 (2018 - £-).
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Admin and sales
4
2
Management
4
4
8
6
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
132,896
79,194
Social security costs
7,307
5,494
Pension costs
1,767
40,868
141,970
125,556
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
8,412
8,160
Company pension contributions to defined contribution schemes
-
40,000
8,412
48,160
7
Interest payable and similar expenses
2019
2018
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
13,821
12,315
Other finance costs:
Other interest
58
126
13,879
12,441
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
138,467
217,693
Deferred tax
Origination and reversal of timing differences
(8,417)
34,217
Adjustment in respect of prior periods
-
(10,450)
Total deferred tax
(8,417)
23,767
Total tax charge
130,050
241,460
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
8
Taxation
(Continued)
- 18 -
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:
2019
2018
£
£
Profit before taxation
484,472
1,074,460
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
92,050
204,147
Tax effect of income not taxable in determining taxable profit
(2,511)
(2,018)
Amortisation on assets not qualifying for tax allowances
38,000
38,000
Under/(over) provided in prior years
-
(10,450)
Accelerated capital allowances in excess of depreciation
-
(22,436)
Deferred tax charge in respect of current year
(8,417)
34,217
Depreciation in excess of accelerated capital allowances
10,928
-
Taxation charge for the period
130,050
241,460
9
Dividends
2019
2018
£
£
Interim paid
8,000
20,000
10
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2018 and 31 March 2019
2,000,000
Amortisation and impairment
At 1 April 2018
650,000
Amortisation charged for the year
200,000
At 31 March 2019
850,000
Carrying amount
At 31 March 2019
1,150,000
At 31 March 2018
1,350,000
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 19 -
11
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 April 2018
354,650
2,000
356,650
Additions
293,550
-
293,550
Disposals
(332,500)
-
(332,500)
At 31 March 2019
315,700
2,000
317,700
Depreciation and impairment
At 1 April 2018
28,199
1,227
29,426
Depreciation charged in the year
31,372
193
31,565
Eliminated in respect of disposals
(26,213)
-
(26,213)
At 31 March 2019
33,358
1,420
34,778
Carrying amount
At 31 March 2019
282,342
580
282,922
At 31 March 2018
326,451
773
327,224
12
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,899,760
3,044,001
Carrying amount of financial liabilities
Measured at amortised cost
8,101,732
7,216,994
13
Stocks
2019
2018
£
£
Finished goods and goods for resale
5,406,372
4,234,242
14
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
2,872,923
3,036,545
Other debtors
491,871
122,811
Prepayments and accrued income
16,719
1,603
3,381,513
3,160,959
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 20 -
15
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans and overdrafts
16
1,127,050
1,322,310
Trade creditors
4,366,543
3,108,668
Corporation tax
138,468
217,693
Other taxation and social security
2,469
1,758
Other creditors
2,095,286
2,185,573
Accruals and deferred income
512,853
600,443
8,242,669
7,436,445
16
Loans and overdrafts
2019
2018
£
£
Bank overdrafts
1,127,050
1,322,310
Payable within one year
1,127,050
1,322,310
The company' overdraft is secured by a First Fixed Charge over the company's book and other debts, chattels, goodwill and uncalled capital both present and future, The bank also hold a First Floating Charge over all assets and undertaking both present and future.
17
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
18
53,756
62,173
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2019
2018
Balances:
£
£
ACAs
53,756
62,173
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
18
Deferred taxation
(Continued)
- 21 -
2019
Movements in the year:
£
Liability at 1 April 2018
62,173
Credit to profit or loss
(8,417)
Liability at 31 March 2019
53,756
The deferred tax liability set out above relates to accelerated capital allowances that are expected to reverse in future years.
19
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,767
40,868
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.
20
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary 'A' shares of 10p each
10
10
100 Ordinary 'B' shares of 10p each
10
10
100 Ordinary 'C' shares of 10p each
10
10
10 Ordinary 'D' shares of 10p each
1
1
10 Ordinary 'E' shares of 10p each
1
1
10 Ordinary 'F' shares of 10p each
1
1
10 Ordinary 'G' shares of 10p each
1
1
34
34
Ordinary 'A' shares are the entitled to full voting rights and ordinary 'A', 'B' and 'C' shares rank pari passu in terms of dividends and other distributions. Ordinary 'B' and 'C' shares do not carry any voting rights.
Ordinary 'D', 'E', 'F' and 'G' shares do not carry any voting rights and are entitled to dividends at the discretion of the directors.
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 22 -
21
Contingent liabilities
In October 2017, the company was subject to a VAT inspection the outcome of which remains ongoing. HMRC are seeking to recover VAT not previously charged on export sales totalling £243,000. The company has sought independent professional advice and is confident that the company has sufficient evidence to demonstrate that the company applied the correct rate of VAT to export sales and as a result overturn the reduced HMRC assessment. In view of this, no provision has been made in these account for this liability.
22
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2019
2018
£
£
Aggregate compensation
8,160
48,160
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2019
2018
2019
2018
£
£
£
£
Entities over which the directors have control, joint control or significant influence
127,432
453,757
1,899,957
4,093,166
Close family members
58,704
20,598
2,500
30,000
Management charge
2019
2018
£
£
Entities over which the directors have control, joint control or significant influence
5,200
5,200
The following amounts were outstanding at the reporting end date:
2019
2018
Amounts owed to related parties
£
£
Entities over which the directors have control, joint control or significant influence
1,032,203
726,677
Close family members
48,000
40,000
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
22
Related party transactions
(Continued)
- 23 -
The following amounts were outstanding at the reporting end date:
2019
Balance
Amounts owed by related parties
£
Entities over which the directors have control, joint control or significant influence
11,228
Close family members
30,099
2018
Balance
Amounts owed in previous period
£
Entities over which the directors have control, joint control or significant influence
140
Close family members
16,918
23
Directors' transactions
Interest free loans have been granted
to
the company
from
its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan
-
1,484,829
133,851
(211,709)
1,406,971
1,484,829
133,851
(211,709)
1,406,971
PARRIS TRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
- 24 -
24
Cash generated from operations
2019
2018
£
£
Profit for the year after tax
354,422
833,000
Adjustments for:
Taxation charged
130,050
241,460
Finance costs
13,879
12,441
Gain on disposal of tangible fixed assets
(13,213)
(10,614)
Amortisation and impairment of intangible assets
200,000
200,000
Depreciation and impairment of tangible fixed assets
31,565
21,145
Movements in working capital:
Increase in stocks
(1,172,130)
(443,307)
(Increase)/decrease in debtors
(220,554)
1,410,931
Increase/(decrease) in creditors
1,080,709
(1,635,513)
Cash generated from operations
404,728
629,543
2019-03-31
2018-04-01
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