REG - Assoc British Enging - Annual Financial Report <Origin Href="QuoteRef">ASBE.L</Origin> - Part 4
31/07/2017 12:55
- Part 4: For the preceding part double click ID:nRSe6026Mc
26 Red Lion Square, London, WC1R 4AG England & Wales
Kelvin Diesels Limited 100% (2016: 100%) Diesel Engines, acting as nominee for British Polar Engines Limited 133 Helen Street, Govan, Glasgow, G51 3HD Scotland
Kelvin Diesels Limited
100% (2016: 100%)
Diesel Engines, acting as nominee for British Polar Engines Limited
133 Helen Street, Govan, Glasgow, G51 3HD
Scotland
The group controls 100% of the voting power of the subscribed shares and has control over the financial and operational
policies of Akoris Trading Limited. Therefore, Akoris Trading Limited is controlled by the group and consolidated in these
financial statements.
23. RELATED PARTY TRANSACTIONS
At 3 April 2017, British Polar Engines had a 2.30% (2016: 2.36%) holding in SalvaRx Group Plc.
Colin Weinberg, a director of the company held 0.1% holding in SalvaRx Group Plc at 3 April 2017 (0.1% at 31 March 2016).
ASSOCIATED BRITISH ENGINEERING PLC Company Number: 00110663
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 3 April 2017
3 April 31 March
2017 2016
Note £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 7 - -
Investments in subsidiaries 9 - -
Available for sale financial assets 10 169 134
169 134
Current assets
Trade and other receivables 11 - 3
Cash and cash equivalents 30 28
30 31
T Total assets 199 165
EQUITY AND LIABILITIES
Called up share capital 15 51 51
Deferred shares 15 2,594 2,594
Share premium account 5,370 5,370
Other reserve 212 212
Available for sale reserve 41 7
Retained earnings (8,151) (8,144)
Total equity 117 90
LIABILITIES
Non-current liabilities
Amounts due to group undertakings 12 - -
Current liabilities
Trade and other payables 12 82 75
Total liabilities 82 75
Total equity and liabilities 199 165
Total liabilities
82
75
Total equity and liabilities
199
165
Under section 408 of the Companies Act 2006, the company is exempt from the requirements to present its own profit and loss
account. The loss after tax for the period was £7,000 (2016: £1,000)
The financial statements were approved and authorised for issue by the Board of Directors on 28 July 2017 and were signed
below on its behalf by:
C Weinberg
Director
The accounting policies on pages 16 and 22 and the notes on pages 47 to 52 form part of these accounts.
ASSOCIATED BRITISH ENGINEERING PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 3 APRIL 2017
Share capital Share premium Deferredshares Other reserve Available for Sale Financial Assets Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £000
Balance at 1 April 2015 51 5,370 2,594 212 4 (8,143) 88
Loss for the year - - - - - (1) (1)
Other comprehensive income
Unrealised gain on Available For Sale financial assets (*) - - - - 3 - 3
-------------- -------------- ---------------- -------------- -------------- --------------- ---------------
Total comprehensive income for the year - - - - 3 (1) 2
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Balance at 31 March 2016 51 5,370 2,594 212 7 (8,144) 90
-------------- -------------- --------------- -------------- -------------- --------------- --------------
Loss for the period - - - - - (7) (7)
Other comprehensive income
Unrealised gain on Available For Sale financial assets (**) - - - - 34 - 34
-------------- -------------- --------------- -------------- -------------- --------------- ---------------
Total comprehensive income for the period - - - - 34 (7) 27
-------------- -------------- --------------- -------------- -------------- --------------- ---------------
Balance at 3 April 2017 51 5,370 2,594 212 41 (8,151) 117
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(*) = Items which will not be subsequently be reclassified to the Income Statement.
(**) = Items which may subsequently be reclassified to the Income Statement.
The accounting policies on pages 16 and 22 and the notes on pages 47 to 52 form part of these accounts.
ASSOCIATED BRITISH ENGINEERING PLC
COMPANY CASH FLOW STATEMENT
FOR THE PERIOD ENDED 3 APRIL 2017
2017 2016
£'000 £'000
Cash flows from operating activities
Cash used in operations (16) (53)
Interest received 18 22
Net cash used in operating activities 2 (31)
Cash flows from investing activities - -
Net cash derived from investing activities - -
Cash flows from financing activities - -
Net cash used in financing activities - -
Net decrease in cash and cash equivalents 2 (31)
Cash and cash equivalents at beginning of period 28 59
Cash and cash equivalents at end of period 30 28
CASH FLOW FROM OPERATING ACTIVITIES
2017 2016
£'000 £'000
Loss before taxation (8) (1)
Adjustments for:
Interest income (18) (22)
Changes in working capital:
Decrease/ (increase) in trade and other receivables 3 17
Increase/(Decrease) in payables 7 (47)
Taxes paid - -
Cash used in operations (16) (53)
The accounting policies on pages 16 and 22 and the notes on pages 47 to 52 form part of these accounts.
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE PERIOD ENDED 3 APRIL 2017
1. OPERATING COSTS AND OPERATING LOSS Operating loss is stated after charging 2017 2016
£'000 £'000
Fees payable to the Company's auditor for the audit of the company's annual accounts 21 20
2. STAFF COSTS AND EMPLOYEES 2017 2016
£'000 £'000
Wages and salaries 48 56
48 56
48
56
The average monthly number of persons employed by the Company during the period was:
2017 2016
Number Number
By activity
Directors 2 3
Administration 1 1
3 4
3
4
3. DIRECTOR'S REMUNERATION 2017 2016
£'000 £'000
Remuneration in respect of directors was as follows:
Remuneration 32 35
32
35
4. KEY MANAGEMENT COMPENSATION 2017 2016
£'000 £'000
Remuneration of Company directors 32 35
32
35
The Company made no pension contributions in respect of Company directors during the period ended 3
April 2017 or 31 March 2016.
5. INTEREST RECEIVED 2017 2016
£'000 £'000
Interest receivable on cash and cash equivalents (18) (22)
(18) (22)
(18)
(22)
6. TAXATION
There is no taxation liability at 3 April 2017 (2016: £nil)
There is no taxation liability at 3 April 2017 (2016: £nil)
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE PERIOD ENDED 3 APRIL 2017
7. PROPERTY, PLANT AND EQUIPMENT Computer equipment Total
£'000 £'000
COST
At 1 April 2015 2 2
Additions - -
Disposals - -
At 31 March 2016 2 2
At 1 April 2016 2 2
Additions - -
Disposals - -
At 3 April 2017 2 2
ACCUMULATED DEPRECIATION
At 1 April 2015 2 2
Charge for year - -
Eliminated on disposals - -
At 31 March 2016 2 2
At 1 April 2016 2 2
Charge for period - -
Eliminated on disposals - -
At 3 April 2017 2 2
CARRYING AMOUNTS
At 3 April 2017 - -
At 31 March 2016 - -
At 31 March 2015 - -
At 31 March 2015
-
-
8. CAPITAL COMMITMENTS
At 3 April 2017 the Company has no capital commitments (2016: £Nil)
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE PERIOD ENDED 3 APRIL 2017
9. INVESTMENTS IN SUBSIDIARIES
Company % Holding Activity Registered office Country of Incorporation
British Polar Engines Limited 100% Manufacture and supply of diesel engines, associated servicing and sale of spare parts 133 Helen Street, Govan, Glasgow, G51 3HD Scotland
Akoris Trading Limited * No trading activity in the period 26 Red Lion Square, London, WC1R 4AG England & Wales
Kelvin Diesels Limited* Diesel Engines, acting as nominee for British Polar Engines Limited 133 Helen Street, Govan, Glasgow, G51 3HD Scotland
Kelvin Diesels Limited*
Diesel Engines, acting as nominee for British Polar Engines Limited
133 Helen Street, Govan, Glasgow, G51 3HD
Scotland
The investment in British Polar Engines Limited and Akoris Trading Limited was fully provided against at 3 April 2017 and
31 March 2016.
* Held indirectly via British Polar Engines Limited
10 AVAILABLE FOR SALE INVESTMENTS 2017 2016
£'000 £'000
Listed securities 169 134
134
Available For Salefinancial assets
£
Opening balance 134
Additions -
Net fair value gain 35
Disposals -
Closing balance 169
Closing balance
169
Gains or losses on available for sale investments are presented within other comprehensive income.
IFRS 13 requires that the fair value reflects "exit price" and is valued in line with the relevant "unit of account" and
the fair value of the equity investments held is calculated by reference to the quoted market price at the period end.
Available for sale investments, which are valued based on active markets' prices, are reported under Level 1 in the fair
value hierarchy.
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE PERIOD ENDED 3 APRIL 2017
11 TRADE AND OTHER RECEIVABLES 2017 2016
£'000 £'000
Trade and other receivables - 2
Prepayments and accrued income - 1
- 3
-
3
12 TRADE AND OTHER PAYABLES 2017 2016
£'000 £'000
Amounts falling due within one year
Trade and other payables 48 55
Accruals and deferred income 34 20
82 75
13. FINANCIAL INSTRUMENTS
The fair values of cash and cash equivalents, available for sale financial assets, receivables and payables are
assumed to approximate to their carrying values.
The Company's financial instruments comprise cash and various items, such as trade and other receivables, available for
sale financial assets and trade and other payables that arise directly from its operations. The main purpose of these
financial instruments is to finance the Company's operations. At 3 April 2017 the Company has cash balances of £30,000
(2016: £28,000) and no bank overdraft (2016: £Nil).
RISKS
The main risks arising from the Company's financial instruments are market risk, liquidity risk and credit risk. Market
risk includes foreign exchange risk and interest rate risk. The Company has limited exposure to foreign exchange risk and
also has no loans, therefore limited exposure to interest rate risk.
Cash and cash equivalents held at floating rates expose the entity to cash flow risk. Interest rate risk is limited to the
cash and cash equivalents.
Based on the balance sheet value of cash and cash equivalents, a 1% change in interest base rates would lead to an increase
or decrease in income and equity of £300 (2016: £280).
The Board reviews and agrees policies for managing each of the above risks and they are summarised overleaf and in the
accounting policies to the Company financial statements. These policies have been consistently applied throughout the
period.
LIQUIDITY RISK
The Company's liquidity is dependent on the cash balances available and it is the Company's policy to place surplus cash on
deposit to ensure as high a rate of return as possible. The Board reviews an annual 12 month financial projection as well
as information regarding cash balances on a monthly basis.
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE PERIOD ENDED 3 APRIL 2017
13. FINANCIAL INSTRUMENTS (continued)
CREDIT RISK
The Company's principal financial assets are cash deposits, available for sale financial assets and trade and other
receivables. The credit risk associated with the cash is limited as the counterparties have high credit ratings assigned
by international credit-rating agencies. The credit risk arising from its trade and other receivables is negligible.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at
fair value into Levels 1 to 3 based on the degree to which the fair value is observable:
· Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or
liabilities;
· Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e as prices) or indirectly (i.e derived from prices); and
· Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or
liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Available for sale financial assets
Quoted securities 169 - - 169
14. DEFERRED TAXATION
2017 2016
£'000 £'000
Arising from trading losses 254 298
Arising from capital losses 1,408 1,655
1,662 1,953
1,662
1,953
The trading losses are available to be used against future profits.
Deferred tax assets on the trading losses have not been provided in the financial statements as they are not sufficiently
certain to crystallise in the foreseeable future. The amounts not recognised are set out above.
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE PERIOD ENDED 3 APRIL 2017
15. CALLED UP SHARE CAPITAL 2017 2016
£'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:
2,048,990 ordinary shares of £0.025 each 51 51
Equity shares:
2,048,990 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.
16. CONTINGENT LIABILITIES
There were no contingent liabilities at 3 April 2017 or 31 March 2016.
17. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption 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 period. Under that law the directors
are required to prepare financial statements in accordance with International Financial Reporting Standards, as adopted by
the European Union (IFRSs) and have also been chosen to prepare the parent company financial statements under IFRS as
adopted by the European Union. 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 Group and Company and profit or loss of the
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, IFRS as adopted by the European Union 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 the Group and
enable them to ensure that the financial statements and the directors 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 Company and 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. 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 of the Group and Company and profit or loss of the Group; 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 Group and Company, together with a description of the principal risks and uncertainties
faced.
C Weinberg
Director
Date: 28 July 2017
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 main principles of
the UK Corporate Governance Code ("the Code"), together with a statement regarding its compliance with specific provisions.
The Code is publicly available on the Financial Reporting Council's website www.frc.org.uk. 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 period 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 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 as the sole incumbent resigned and a new non-executive director has not been
appointed. ;
· There is no formal training programme for new directors on joining the Board. This is contrary to provision B4.2.
This has not been considered necessary to date but will be actively considered by the Board for 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.
· The Board has not appointed independent non-executive directors as required by B1.2, C.3.1, A4, D2, and D2.1. The
Board is actively pursuing suitable candidates for the position(s).
Board of Directors
The Board comprises 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 period with the Group's business, meet as required and also attend formal Board meetings.
The strategies proposed by management of the company and its subsidiaries 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 Company operates. During the period, 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.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
(AS REFERRED TO IN THE DIRECTORS' REPORT)
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 Group'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 (68), 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.
Bill Girdwood (42) he joined BPE in October 2014 from another engineering company and is now managing director with a
special focus on sales and new products. It is regrettable that Bill Girdwood was taken ill shortly before the end of the
financial year and remains on sick leave. Other Board members and management are assisting in covering his role on an
interim basis
The current Directors
Rupert Pearce Gould
Colin Weinberg
Short biographies of the directors appear on page 63 and show considerable and varied experience in the business world and
the City.
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.
At the period end, there were no independent non-executive directors. The directors continue to search for a suitable
candidate for the role and intend to appoint a non- executive director in the near future.
Nominations Committee
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 accounts; and to review and monitor the independence of
the statutory auditor and provision of additional services to the Company.
There is no internal audit function. Due to the size of the finance function and the close involvement of directors, the
Board and the Audit Committee do not consider there to be a need for a separate internal audit function.
As part of this process, the performance of the Group's major division 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 2017 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 period to 3 April 2017 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.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
(AS REFERRED TO IN THE DIRECTORS' REPORT)
Audit Committee (continued)
Inventory valuation
The Committee have reviewed the policy of valuing inventory and of providing for obsolete and slow-moving inventory lines.
This is in line with their expectations and with the policies implemented by similar organisations.
Recoverability of receivables
The Committee have reviewed the policy for providing for doubtful debts and believe them to be both robust and adequate.
Assessing external audit effectiveness
The Audit Committee reviews audit quality every year using feedback from the Auditors 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.
Pensions
The Committee continued to monitor the Company'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.
Going concern
The committee considered the use of the going concern basis, due to the continued losses being incurred. The audit
committee has considered and approves of the changes in the company's policy of reducing the forecast period of the
business insofar as it has exempted management from producing three-year projections. This will be reviewed annually.
Appointing the auditor and safeguards on non-audit services
haysmacintyre do not provide any prohibited non-audit services. In accordance with section 485 of the Companies Act 2006, a
resolution proposing that they be re-appointed will be put at a General Meeting.
The committee has overseen the preparation of the viability statement and has conducted a robust examination of the risks
identified, the resulting actions that may be required and the project outcomes.
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 company directors together with any incentive plans adopted, or to 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.
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.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
(AS REFERRED TO IN THE DIRECTORS' REPORT)
AUDIT AND INTERNAL CONTROL
The directors are responsible for the Group's system of internal control and reviewing its effectiveness and the processes
in place for risk management.
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 procedures, which exist to provide external
control, are as follows
- a regular review is undertaken to assess the risks facing the trading subsidiary and to enhance the systems
which manage the risk identified. Management establishes control procedures for each of the risks identified and reports
whether the key controls have operated effectively
- agreement of Group short term financial objectives and business plans
- review by the Board of monthly Group Financial Statements and monitoring of results against budget. The
executive directors attend regular Board meetings of the subsidiary(ies)
- Board control over treasury, taxation, legal, insurance and personnel issues
- The acquisition or disposal of a business may not be completed without the approval of the Board.
- The operational responsibility for preparing the consolidated accounts is delegated to a third party service
provider with the Board retaining responsibility for overall content, presentation and final review of the consolidated
accounts.
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 procedures, which exist to provide external control, are as follows -
- clearly defined organisation structures with segregation of duties wherever practicable. Operating and
financial responsibilities for the subsidiary Companies are delegated to the subsidiaries Board and there are limits which
apply to capital expenditure and significant contracts.
- a regular review is undertaken to assess the risks facing the trading subsidiaries and to enhance the systems
which manage the risk identified. Management establishes control procedures for each of the risks identified and reports
whether the key controls have operated effectively agreement of Group short term financial objectives and business plans.
- review by the Board of monthly Group Financial Statements and monitoring of results against budget. The
executive directors attend regular Board meetings of the subsidiaries
- Board control over treasury, taxation, legal, insurance and personnel issues
- The acquisition or disposal of a business may not be completed without the approval of the Board.
- The operational responsibility for preparing the consolidated accounts is delegated to a third party service
provider with the Board retaining responsibility for overall content, presentation and final review of the consolidated
accounts.
Risk Management
The Board confirms that there is an ongoing process for identifying, evaluating and managing significant business risks
faced by the Group, including those risks relating to social, environmental and ethical matters. This process was in place
throughout the period under review and up to the date of approval of this report. The Audit Committee has kept under review
the effectiveness of the system of internal control and has reported regularly to the Board.
Through these mechanisms, Group performance is continually monitored, risks identified in a timely manner, their financial
implication assessed, control procedure re-evaluated and corrective actions agreed and where possible implemented.
The Board believes that it is not currently appropriate for the Group to maintain an internal audit function due to the
size of the Group and the manner in which the Group operates.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
(AS REFERRED TO IN THE DIRECTORS' REPORT)
Risk Management (continued)
The Board consider the independence and objectivity of the external auditor on an annual basis, with particular regard to
non-audit services. The split between audit and non-audit fees for the period and information on the nature of the
non-audit fees appear in note 3 to the financial statements. There were no prohibited non-audit fees incurred from the
auditor during the period. The Board also receive an annual confirmation of independence from the auditors.
Fair, Balanced and Understandable
We consistently seek to improve the process of compiling the Annual Report to give the Board more time to assess whether it
was fair, balanced and understandable, as required by the Code. The Board considered whether the Annual Report contained
the necessary information for shareholders to assess the Group's performance, business model and strategy. The tone was
reviewed to ensure a balanced approach and, with the support of the Audit Committee, the Board made sure the narrative at
the front end of the report was consistent with the financial statements.
VIABILITY STATEMENT
In accordance with provision C2.2 of the UK Corporate Governance Code, published by the Financial Reporting Council ("FRC")
in September 2014, the directors have assessed the viability of the Group over the immediate and foreseeable future (up to
two years from the date of the accounts) and in consideration of its sales and marketing projections. This assessment has
been made taking account of the current position of the Group, the present immediate plan, the corporate planning process,
a budget for the operating company and the Group's principle risks associated with the current plan.
The provision C2.2 of the UK Corporate Governance Code and Appendix B of the FRC Guidance state that the period covered for
longer term viability statement should be significantly longer than 12 months from approval of the financial statements.
The Board believe that a two year period is appropriate for the Group as within two years the company will be over the
issues connected with the introduction of the new series Kelvin engine to the product line. This together with a
prospective rise orders in the reviving British Polar engines spares market. In order to manage its working capital and
address any cash shortfall, during this two-year period the Group may need to realise some of its investments and/or need
to raise funds. Assessing the longer-term viability of any company at this early stage of the strategy implementation is
inevitably a challenge given the volatility in markets. The Board are determined to continually revise its plans and amend
them should that prove necessary and anticipated sales not materialise.
The budgets where applicable include an assessment of live business opportunities of which the Board are aware at the time
of writing this report.
Following this assessment, the Board have concluded, based on the budgets produced and the financial position of the Group,
that there is reasonable expectation that the Group have adequate resources and will continue to operate and meeting is
liabilities as they fall due.
In doing so, it is recognised that such future assessments are subject to a level of uncertainty that increases with time
and, therefore, future outcomes cannot be guaranteed or predicted with certainty. The Directors have made the following key
assumptions in connection with this assessment:
- there is no significant unexpected sale attrition and projected engine and parts sales are not significantly
lower than anticipated;
- the Group is able to execute its sales growth strategy and deliver forecast margin improvements.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
(AS REFERRED TO IN THE DIRECTORS' REPORT)
GOING CONCERN
The financial statements have been prepared on the going concern basis and based on our plans for the next two years
(Please see Viability statement above and the going concern statement on page 5). There have been no changes to accounting
policies in the period. The most notable accounting event has been the extended losses that have resulted from a further
decline in turnover from last year. The Board is implementing its strategy for addressing this and for developing fresh
sales areas to utilise the company's expertise in its core business. This plan also remains subject to the recovery plan
agreed with the Trustees of our pension fund, which is set out in Contributions by employer in respect of the shortfall in
funding following the triennial review on page 36.
Based on the Group's budgets, cash forecasts which assume a combination of disposal of investments and a need for
fundraises or loans in the immediate to short term, 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.
On behalf of the Board
C Weinberg
Director
Date 28 July 2017
ASSOCIATED BRITISH ENGINEERING PLC
DIRECTORS' REMUNERATION REPORT
Introduction
This report is submitted in accordance with Schedule 8 of the Large and Medium sized Companies (accounts and Reports)
(Amendment) Regulations 2013 in respect of the period ended 3 April 2017. The reporting requirements entail two sections
to be included, a Policy Report and an Annual Remuneration Report which are presented below.
The Company's auditor, haysmacintyre, is required to give its opinion on certain information included in this report, this
comprises of the Directors Remuneration - single figure table on page 58 and the information on directors shareholdings
which is contained in the directors report on page 4 and also forms part of this directors' remuneration report. Their
report on these and other matters is set out on pages 3 to 5.
Consideration by the Directors of Matters Relating to Directors' Remuneration
The Company's Remuneration Committee considers Directors' remuneration and has not sought advice or services from any
person in respect of its consideration of Directors' remuneration during the period although the Directors expect from
time to time to review the fees against those paid to boards of directors of comparable organisations and appointments.
The Company does not have a Chief Executive Officer, Senior Management or any full time employees and relies on senior
management in each subsidiary.
DIRECTORS' REMUNERATION POLICY REPORT
The roles of the directors are as follows:-
Joint Chairman and Deputy Chairman - Rupert Pearce Gould (part time executive - operational)
Joint Chairman and Deputy Chairman - Colin Weinberg (part time executive - finance)
The Company's policy is for the Directors to be remunerated in the form of fees, payable monthly in arrears. The
non-executive directors each receive a fee for their services, which is agreed by the Remuneration Committee after
reviewing comparable organisations and appointments. None of the non-executive directors receive a pension or other
benefit from the Company, nor do they participate in any bonus or incentive schemes or share option schemes.
The fees are not specifically related to the Directors' performance, either individually or collectively. The Board is
also entitled to be repaid all reasonable travelling subsistence and other expenses incurred by them respectively whilst
conducting their duties as Directors, however no other remuneration or compensation was paid or payable by the company
during the period to any of the current Directors. There will be no payment for loss of office unless approved by a
separate shareholder resolution.
Major decisions on Remuneration
The Company's policy is that the fees payable to each director should reflect the time spent by the directors on the
Company's affairs and the responsibilities borne by each of the directors. They should be sufficient to attract candidates
of high calibre to be recruited. The policy is for the Chairmen of the Board to be paid higher fees than the other
directors in recognition of the more onerous role. The Remuneration policy is to review the director's fee rates from time
to time, benchmarking the fees against comparable organisations and appointments, although such review will not necessarily
result in any change. Due to the nature of the Company, there are no full time employees and therefore the requirement to
consider the percentage change in remuneration of all employees when determining the Directors' remuneration is not
considered to be relevant.
The directors have agreements with the company that may be terminated on one year's notice. In accordance with the Articles
of Association each director retires from office at the third annual general meeting after the annual general meeting at
which he was last elected. A retiring director is eligible for re-election.
ASSOCIATED BRITISH ENGINEERING PLC
DIRECTORS' REMUNERATION REPORT (Continued)
A Director may resign by notice in writing to the Board at any time giving one month's notice. None of the Directors are
entitled to compensation payable upon early termination of their arrangements other than in respect of any unexpired notice
period.
In accordance with the reporting requirements of Large and Medium sized Companies (accounts and Reports) (Amendment)
Regulations 2013, an Ordinary resolution for the approval of the remuneration policy of the Company to remain in force for
a three year
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