REG - Assoc British Enging - Annual Financial Report <Origin Href="QuoteRef">ASBE.L</Origin> - Part 4
29/07/2015 07:00
- Part 4: For the preceding part double click ID:nRSc3684Uc
report to you if,
in our opinion:
· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
· the parent company financial statements and the part of the Directors' Remuneration Report to be audited 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.
Other matter
We have reported separately on the Group financial statements of Associated British Engineering plc for the year ended 31
March 2015.
Nicholas Watson
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Oxford
Date: 28 July 2015
ASSOCIATED BRITISH ENGINEERING PLC
PRINCIPAL ACCOUNTING POLICIES - COMPANY
FOR THE YEAR ENDED 31 MARCH 2015
BASIS OF PREPARATION
The Company accounts have been prepared in accordance with applicable UK accounting standards (United Kingdom Generally
Accepted Accounting Practice). The summary of the principal accounting policies, which have been applied consistently, is
set out below. The policies have remained unchanged from the previous year.
BASIS OF ACCOUNTING
The accounts are prepared on the historical cost basis, modified to include the fair value of current asset investments.
The company does not present its own profit and loss account as permitted by Section 408 of the Companies Act 2006. The
company loss is disclosed in note 12 to the company accounts.
GOING CONCERN
The financial statements have been prepared on the going concern basis. There have been no changes to accounting policies
in the year. The most notable accounting event has been the increase in the pension scheme deficit based on this year's
actuarial forecast and referred to in the Chairman's Statement. With reference to the recovery plan agreed with the
Trustees in conjunction with the valuation of the pension scheme as at 1 April 2014, the Group will make the following
contributions over the period from 1 April 2014 to 31 March 2030:
· From 1 April 2014 until 1 August 2014 contributions of £17,000 per month have been paid in accordance with the
previous recovery plan.
· From 1 August 2014, £10,000 per month will be payable by the 19th of the calendar month after that to which they
relate.
· An additional lump sum of relating to the profits of the employer in respect of all accounting periods from 1 April
2014 is payable in the financial year following the generation of the profits calculated on the following basis:-
· a) for all trading profits (before interest and taxation, and excluding those generated from external investments)
in excess of £250k and below £1,050k an additional payment of 20% of such profits
· b) for all trading profits (before interest and taxation, and excluding those generated from external investments)
in excess of £1050k an additional payment of 10% of such profits
· Profit-share contributions will only be payable if there is a gross pension deficit recorded in the Employer's
Annual Report and Accounts for the financial year in which the profits are generated
· Funding shortfall contributions (including profit-share contributions) will cease in the event that a funding
surplus is certified by the Scheme Actuary
Based on the Group's budgets and cash forecasts, the Board considers that the Group has sufficient resources to meet all
necessary outgoings and to enable it to continue in operational existence for the foreseeable future.
CASH FLOW STATEMENT
The Company's results for the year ended 31 March 2015 are included in the consolidated financial statements of Associated
British Engineering plc, which are publicly available. Consequently, the Company has taken advantage of the exemption from
preparing a cash flow statement under the terms of FRS 1 - Cash Flow Statements.
TANGIBLE FIXED ASSETS
Freehold land is not depreciated. Other fixed assets are depreciated over their estimated useful lives at the following
annual rates to cost:
Freehold buildings 5 per cent straight line
Computer equipment 20 per cent straight line
DEFERRED TAXATION
Deferred tax is recognised on an undiscounted basis on all timing differences where the transactions or events that give
the Company an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred by the
balance sheet date. Deferred tax assets are recognised when it is more likely than not that they will be recovered.
Deferred tax is measured using rates of tax and laws that have been enacted or substantively enacted by the balance sheet
date.
ASSOCIATED BRITISH ENGINEERING PLC
PRINCIPAL ACCOUNTING POLICIES - COMPANY
FOR THE YEAR ENDED 31 MARCH 2015
FOREIGN CURRENCIES
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the year
end date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Any exchange
gains or losses are credited or charged to the profit and loss account in the year in which they arise.
FINANCIAL INSTRUMENTS
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such
in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and
loss account. Finance costs are calculated so as to produce a constant rate of charge on the outstanding liability.
FINANCIAL INSTRUMENTS (continued)
Where none of the contractual terms of share capital meet the definition of a financial liability then this is classed as
an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Trade and other debtors
Trade and other debtors are originally recognised at fair value and subsequently amortised cost under effective interest
method. A provision against trade debtors is made when there is objective evidence that the Company will not be able to
collect all amounts due to it in accordance the original terms of those receivables. There is no general or specific
provision for bad and doubtful debts at year end. Trade debtors and cash and cash equivalents are classified as loans and
receivables.
Trade and other creditors
Trade and other creditors are initially recognised at fair value, net of transaction costs and are subsequently held at
amortised cost.
INVESTMENTS
Fixed asset investments in subsidiaries are included at cost less provisions for impairment.
Other investments are classified as available for sale and are recognised and derecognised on a trade date where a purchase
or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe
established by the market concerned, and are measured at fair value.
Gains and losses arising from changes in fair value are shown in the statement of total recognised gains and losses for the
period. When the asset is disposed of or deemed to be impaired, the cumulative gain or loss is reclassified from the
equity reserve to profit or loss.
ASSOCIATED BRITISH ENGINEERING PLC Company Number: 00110663
COMPANY BALANCE SHEET
AS AT 31 MARCH 2015
Restated
2015 2014
Note £'000 £'000
FIXED ASSETS
Tangible assets 3 - -
Investments in subsidiaries 5 - -
Other investments 6 138 171
------------- -------------
138 171
------------ ------------
CURRENT ASSETS
Debtors 7 20 18
Cash at bank and in hand 52 98
------------- -------------
72 116
Creditors - amounts falling due within one year 8 (122) (54)
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Net current (liabilities)/assets (50) 62
------------ ------------
Total assets less current liabilities 88 233
Creditors - amounts falling due after more than one year 8 - -
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88 233
====== ======
CAPITAL AND RESERVES
Called up share capital 10 51 51
Deferred shares 10 2,594 2,594
Share premium account 12 5,370 5,370
Other reserve 212 212
Available for sale reserve 12 4 -
Profit and loss account 12 (8,143) (7,994)
------------- -------------
SHAREHOLDERS' FUNDS 88 233
====== ======
-------------
SHAREHOLDERS' FUNDS
88
233
======
======
The financial statements were approved and authorised for issue by the Board of Directors on 28 July 2015
and were signed below on its behalf by:
C Weinberg
Director
The accounting policies on pages 43 and 44 and the notes on pages 46 to 49 form part of these accounts.
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE YEAR ENDED 31 MARCH 2015
1. ADMINISTRATIVE EXPENSES 2015 2014
£'000 £'000
Directors (note 2) and employees 60 64
Depreciation of tangible fixed assets: owned - 1
====== ======
2. DIRECTORS
2015 2014
£'000 £'000
Remuneration in respect of directors was as follows:
Remuneration 49 45
====== ======
The average number of employees, including directors, during the year was 5 (2014: 5). More detailed information concerning directors' remuneration is shown in the Directors' Remuneration Report.
3. TANGIBLE FIXED ASSETS Computer Freehold land
equipment and buildings Total
£'000 £'000 £'000
COST
At 1 April 2014 2 - 2
Additions - - -
Disposals - - -
--------- -------------- -------------
At 31 March 2015 2 - 2
--------- -------------- -------------
DEPRECIATION
At 1 April 2014 2 - 2
Charge for the year - - -
Disposals - - -
--------- -------------- -------------
At 31 March 2015 2 - 2
--------- -------------- -------------
NET BOOK VALUE
At 31 March 2015 - - -
===== ====== ======
At 31 March 2014 - - -
===== ====== ======
4. CAPITAL COMMITMENTS
At 31 March 2015 the Company had no capital commitments (2014: £Nil).
4.
CAPITAL COMMITMENTS
At 31 March 2015 the Company had no capital commitments (2014: £Nil).
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE YEAR ENDED 31 MARCH 2015
5. INVESTMENTS IN SUBSIDIARIES
The wholly owned subsidiaries are:
Company Activity Country of
Incorporation
British Polar Engines Limited Engineering England & Wales
Akoris Trading Limited * Commodity and natural resource trading, finance and investment England & Wales
The investment in British Polar Engines Limited was fully provided against at 31 March 2015 and 31 March 2014.
* Held indirectly via British Polar Engines Limited
6 OTHER INVESTMENTS 2015 2014
£'000 £'000
Equities 133 129
Cash on deposit 5 42
------------- -------------
138 171
====== ======
======
======
7. DEBTORS 2015 2014
£'000 £'000
Prepayments and accrued income 20 18
------------- -------------
20 18
====== ======
8. CREDITORS 2015 2014
£'000 £'000
Amounts falling due within one year
Trade creditors 40 -
Other creditors 56 21
Accruals and deferred income 26 33
------------- -------------
122 54
====== ======
Amounts falling due after one year 2015 2015
£'000 £'000
Amounts due to group undertakings - -
------------- -------------
- -
====== ======
======
======
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE YEAR ENDED 31 MARCH 2015
9. DEFERRED TAXATION
There is no unprovided deferred taxation liability at 31 March 2015 or 31 March 2014.
No provision has been made for the potential deferred tax assets on the trading losses carried forward as they are not sufficiently certain to crystallise in the foreseeable future. The amounts not recognised (all of which have been calculated at 20% (2014: 20%) are set out below:
2015 2014
£'000 £'000
Arising from trading losses 298 273
Arising from capital losses 1,655 1,655
------------- -------------
1,953 1,928
====== ======
10. CALLED UP SHARE CAPITAL 2015 2014
£'000 £'000
Nominal value:
Allotted and fully paid:
2,048,990 ordinary shares of £0.025 each 51 51
1,313,427 deferred shares of £1.975 each share premium 2,594 2,594
------------- -------------
2,645 2,645
====== ======
Carrying value:
Equity shares:
2,040,000 ordinary shares of £0.025 each 51 51
====== ======
Further to the Extraordinary General Meeting held on 1 September 1999 the ordinary shares have 200 votes per share.
The deferred shares do not have voting rights and do not carry any entitlement to attend general meetings of the Company;
they are not admitted to any Stock Exchange and carry a right to participate in any return of capital once an amount of
£100 has been paid in respect of each new ordinary share.
11. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
2015 2014
£'000 £'000
(Loss)/profit for the financial year (135) 671
Unrealised loss on available for sale investments (10) -
------------- -------------
(145) 671
Opening shareholders' funds 233 (438)
------------- -------------
Closing shareholders' funds 88 233
====== ======
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE YEAR ENDED 31 MARCH 2015
12. RESERVES
Available For Sale Reserve Profit and loss Share premium
£'000 £'000 £'000
At 1 April 2014 - (7,994) 5,370
Loss for the year (135) -
Transfer between reserves 14 (14) -
Unrealised loss on available for sale investments (10) - -
------------- ------------- -------------
At 31 March 2015 4 (8,143) 5,370
====== ====== ======
There were no movements in other reserves during the year. As permitted by the Companies Act 2006, the Company's profit and
loss account has not been included in these accounts. The Company's loss for the financial year was £135,000 (2014:
£671,000 profit).
13. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 March 2015 or 31 March 2014.
14. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption conferred by FRS 8 with regard to disclosing transactions with
wholly-owned subsidiaries, on the grounds that the results of the subsidiaries are included in the publicly available
consolidated financial statements of Associated British Engineering plc.
ASSOCIATED BRITISH ENGINEERING PLC
STATEMENT OF DIRECTORS' RESPONSIBILITIES
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors' Report, the Remuneration 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
are required to prepare Group financial statements in accordance with International Financial Reporting Standards, as
adopted by the European Union (IFRSs), and have elected to prepare the Parent Company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws).
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 and profit or loss of the Company and Group 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 Group and enable
them to ensure that the financial statements and the remuneration report comply with the Companies Act 2006 and Article 4
of the IAS Regulations. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The directors confirm that:
· so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware;
and
· the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
· the directors are responsible for preparing the annual report in accordance with applicable law and regulations.
Having taken advice from the Audit Committee, the directors consider the annual report and the financial statements, taken
as a whole, provides the information necessary to assess the company's performance, business model and strategy and is
fair, balanced and understandable
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
To the best of my knowledge:
· the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in
the consolidation taken as a whole; and
· the annual report, including the Strategic Report includes a fair review of the development and performance of the
business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with
a description of the principal risks and uncertainties that they face.
C Weinberg
Director
28 July 2015
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT
(AS REFERRED TO IN THE DIRECTORS' REPORT)
In accordance with the requirements of the Listing Rules of the Financial Conduct Authority, set out below are details of
the Company's corporate governance arrangements, including a statement as to how the Company applies the principles of
Section 1 of the UK Corporate Governance Code, together with a statement regarding its compliance with specific provisions.
Whilst welcoming the principles contained within the Code, the Board considers that it should be recognised that what may
be appropriate for a large Company may not necessarily be so appropriate for a smaller company and the Company's current
circumstances. As a result, the Company has been in compliance throughout the year with the provisions set out in the UK
Corporate Governance Code with the following exceptions:-
· The division of responsibilities between the roles of chairman and chief executive have not been clearly established,
set out in writing and agreed by the Board. This is contrary to provision A.2.1. This has not been put in place because
there is no chief executive on the Board but the appointment of joint-chairmen provides checks and balances;
· The Company does not have a Nomination Committee, this is contrary to provisions B2.1-B2.2. This has not been
considered necessary due to the size and nature of the Board which consists of one non-executive director and two part
time executive directors;
· The non-executive director of the Company has not been appointed for specific terms as required by provision B2.3.
This has not been considered necessary to date but his rotation is being actively considered by the Board;
· There is no formal training programme for new directors on joining the Board. This is contrary to provision B4.2.
The has not been considered necessary to date but is being actively considered by the Board om new appointments;
· The Board has not undertaken a formal and rigorous annual evaluation of its own performance and the individual
directors. This is contrary to provision B.6.1. When a new non-executive director is appointed this will be implemented.
Board of Directors
The Board comprises one non-executive director and two part time executive directors, as detailed in the Directors'
Report.
The Board of Directors is responsible for formulating strategy and monitoring financial performance. The directors are in
frequent contact throughout the year with the Group's business, meet as required and also attend formal Board meetings. The
strategies proposed by management of the company and its subsidiary(ies) are fully discussed, critically examined against
the best and long term interests of not only the shareholders, but also customers, employees, suppliers and various
communities and environments within which the Group operates. During the year, all serving directors were in attendance at
Board meetings.
The Board retains full responsibility for the direction and control of the Group and has a formal schedule of matters in
respect of which decisions are reserved to it, covering key areas including strategy formulation, acquisitions or
disposals, approval of the budget for the subsidiary, financial results, board appointments and proposals for dividend
payments.
The Board has full and timely access to relevant information throughout the Group.
All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring
that Board procedures are compiled with. There is also formal agreed procedure for directors in the furtherance of their
duties to take independent professional advice as necessary at the Company's expense.
The business address of each of the directors is 9 High Street, Little Eversden, Cambridge CB23 1HE.
The Board is supported by a senior management team which includes the following individuals:
Stewart Davis (67), non-executive director of BPE and former managing director. Stewart has worked for BPE for 51 years
and was its sales director from 1985 to 2007.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
Jim Duncan (50), former Operations Director of BPE having joined BPE some 35 years ago and was appointed joint managing
director of BPE responsible for engineering on Stewart Davis's retirement
Bill Girdwood (41) he joined BPE in October 2014 from another engineering company and as joint managing director he is
responsible for sales.
Marc Weisberger (39) he was a founder, shareholder and managing director of Akoris Trading Limited. He resigned in January
2015
Non-Executive Directors
Short biographies of the directors appear on page 56 and show considerable and varied experience in the business world and
the City. During the year, Sir David Thomson Bt. was appointed a director immediately after the AGM in 2014 and before the
resignation of David Brown; he was deemed to have vacated his office in December 2014. Andrew Beaumont was also deemed to
have vacated his office as non-executive director on the same day.
Under the Company's Articles of Association, new directors and at least one third of the directors retire from office each
year. The retiring director is eligible for re-election.
The role of non-executive directors is a vital element of corporate accountability. Due to the small size of the Board and
because there are no full time executive directors, the directors and the joint chairmen carry out certain executive
responsibilities.
Nomination
The Appointment of directors will be discussed by the full Board until such time as there are two non-executive directors
to form an effective committee. Potential new non-executive directors are proposed by all the members of the Board and
major shareholders; the Board considers these in the light of the Company's business requirements and the need to have a
balanced Board. The Board will then implement an appropriate review committee.
Audit Committee
The Company's audit committee comprises the full Board. The audit committee meets at least twice a year to monitor the
financial reporting process, including its annual and interim accounts; the effectiveness of the Company's internal
controls and risk management systems; statutory audit of the annual and consolidated accounts; and to review and monitor
the independence of the statutory auditor and provision of additional services to the Group.
As part of this process, the performance of the Group's major divisions is considered, with key judgements, estimates and
accounting policies being approved by the subsidiary Board ahead of recommendation to the group board. The primary areas of
financial reporting judgement considered by the Committee in relation to the 2015 financial statements and how they were
addressed are outlined below:
Revenue Recognition and Management Override
The Committee have reviewed the systems and control processes in place during the financial year to 31 March 2015 and
concluded that, given the resources available, appropriate procedures are in place. There is sufficient level of
supervisory oversight in place to ensure that revenue is not materially misstated and the risk of management override has
been reduced.
Assessing external audit effectiveness
The Audit Committee reviews audit quality every year using feedback from the Auditors, the Board and Senior Management
Team. The effectiveness and quality of the audit process is considered by focussing on the scope of the audit and auditor
independence in order to ensure that the quality of the audit process is not compromised and remains effective.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
Audit Committee (continued)
Pensions
The Committee continued to monitor the Group's pension arrangements, in particular the liability in respect of the defined
benefit plans, which are sensitive to assumptions made in respect of discount rates and inflation. The Committee reviewed
the actuarial assumptions used and compared them with those used by other companies, and considered them to be reasonable.
Provisions
The Committee reviewed whether certain provisions were sufficient, in particular inventory provisions and decided that they
were reasonable and appropriate.
Appointing the auditor and safeguards on non-audit services
The current auditors have acted for more than ten years and do not provide any non-audit services. The Audit Committee
will consider the practicalities of putting the audit out to tender.
Remuneration
The Company's remuneration committee comprises Rupert Pearce Gould and Colin Weinberg. The remuneration committee is to
meet at least twice a year and has as its remit the determination and review of, amongst others, the remuneration of
directors including group directors together with any incentive plans adopted, or be adopted, by the Company and the
Group.
Communication with Shareholders
The Board believes it is important to respond adequately to the queries of both private and institutional shareholders.
During the year The Group responded to shareholder concerns about the structure of the Board and the changes during the
year were a consequence of that.
The Chairman's Statement in the Annual Report contains a business review. An interim business review is also provided with
the half yearly announcement. The Chairmen are available to shareholders at any time to discuss strategy and governance
matters.
The Board seeks to ensure that its report and accounts and other financial statements provide a clear assessment of the
Group's business. All shareholders have the opportunity to ask questions and express their views at the Company's Annual
General Meeting, at which all directors are available to take questions.
AUDIT AND INTERNAL CONTROL
The directors are responsible for the Group's system of internal control and reviewing its effectiveness. These controls
can only ever provide reasonable but not absolute assurance that assets are safeguarded against material misstatement or
loss, that proper accounting records are maintained, and that the information used internally, or for publication, is
accurate and reliable. The key
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