Annual Financial Report

RNS Number : 0517I
Associated British Engineering PLC
27 June 2013
 



Company Number: 00110663

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

31 MARCH 2013

 

 

 


REPORT AND FINANCIAL STATEMENTS

CONTENTS                                                                                                     Page

The Directors' Report on pages 3 to 5 and the Directors' Remuneration Report on pages 42 and 43 have each been drawn up in accordance with the requirements of English law and liability in respect thereof is also governed by English law. In particular, the responsibility of the directors for these reports is owed solely to Associated British Engineering plc.

 


 

 

 

 

REVENUE

 

OPERATING (LOSS)/PROFIT

 

 

NET ASSETS

 

 

 

 

BASIC EARNINGS PER 2.5p ORDINARY SHARE

 

EQUITY SHAREHOLDERS' FUNDS PER 2.5p ORDINARY SHARE

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 MARCH 2013

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

FOR THE YEAR ENDED 31 MARCH 2013

 

The directors submit their report and audited accounts for the year ended 31 March 2013.

 

PRINCIPAL ACTIVITY

 

During the year the Company has acted as a parent undertaking for a subsidiary engaged in diesel and related engineering activities, for another new subsidiary engaged in commodity and natural resource trading, finance and investment and also a dormant subsidiary.  Details of the subsidiaries are set out in notes 23 & 24. 

 

BUSINESS REVIEW AND PRINCIPAL RISKS FACING THE BUSINESS

 

A review of the business and of events during the year is contained in the Chairman's Statement.

 

The Group's main operating business is its subsidiary British Polar Engines Limited. Business activity in the sector in which BPE primarily operates has in recent years been buoyed by sales to the oil services business. The past year has demonstrated that this business remains sensitive to economic downturn as orders have been delayed and deferred.

 

The trading outlook for BPE remains unpredictable and the Company is exposed to both volatile pricing and periodic cyclical swings. A review of the record of the trading results over the last decade amply demonstrates this with both revenue and operating profit increasing and declining with the oil sector. The Group's income stream fluctuates throughout the year as a result of the nature and size of the orders and order flows. It is therefore difficult to forecast trading and profitability to any great degree.

 

The economic downturn generally, and in our area of operation specifically, will continue to impact on the income and performance of the Group. In response to this the directors aim to keep abreast of the economic climate and business strategy will be continually reviewed and updated to deal with changes.

 

In January BPE invested in Akoris Trading Limited, a venture over which your company has control. This newly created subsidiary of BPE is exploring ways in which to develop its business in natural resource trading, finance and investment finance and commodity services. 

 

Further consideration of risks and uncertainties in respect of financial instruments that face the Group and Company is contained in note 19 to the Group financial statements.

 

KEY PERFORMANCE INDICATORS

 

The Group uses various indicators to monitor its progress.  Sales, service and production are continually monitored against set monthly budgets to compare and improve upon gross profit and operating profit margins. Budgets are set on a monthly and annual basis but the directors have not enhanced the disclosures in this regard as one key transaction stalling could have a significant impact on the feasibility of the budget meaning that such disclosures are not considered useful to users of the accounts.

 

The Group reviews the Pension Fund liability, the key assumptions underpinning the actuarial valuation and the minimum funding requirement on a continual basis. The key assumptions underpinning the actuarial valuation are reviewed and compared with industry norms; there were no notable variances from the prior year.  

 

There is nothing to report on environmental, employee, social and community matters or essential contractual or other arrangements.

 

RESULTS AND DIVIDENDS

 

The Group's loss after tax, including the one off impact of the share restructuring exercise, amounted to £127,000.  The directors are unable to recommend a dividend on the ordinary shares for the year (2012: nil per ordinary share).

 

CORPORATE GOVERNANCE

 

ASSOCIATED BRITISH ENGINEERING PLC

 

FOR THE YEAR ENDED 31 MARCH 2013

 

DIRECTORS

 

The names of the directors who served during the period from 1 April 2012 to 31 March 2013 are:

 

Non-Executive Director

Non-Executive Director

Biographical details of the directors are set out on page 44.

 

As at 12 June 2013 the Company had been notified of the following substantial interests, in excess of 3%, in the issued ordinary share capital of the Company:

 

BENEFICIAL INTERESTS IN SIGNIFICANT CONTRACTS

The beneficial interests of the directors, their spouses and children in the share capital of the Company according to the register kept by the Company as at 1 April 2012 and 31 March 2013 were as follows:

At the relevant dates Mr S J Cockburn had a non-beneficial interest in 80,859 ordinary shares.

 

At 31 March 2013 David Brown had a 12.4% interest in the shares of Akoris Trading Limited

 

ASSOCIATED BRITISH ENGINEERING PLC

 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

No share options were held by any of the directors at 31 March 2013 or 31 March 2012.

 

Since 31 March 2013 and up to and including 31 May 2013 there have been no changes in the directors' interests in the share capital of the Company.

CREDITOR PAYMENT POLICY

 

The Company's current policy concerning the payment of the majority of its trade creditors is to follow the Better Payment Practice Code co-ordinated by the Better Payment Practice Group.  For other suppliers the Company's policy is to:

 

(a)           settle the terms of payment with those suppliers when agreeing the terms of each transaction;

(b)           ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

(c)            pay in accordance with its contractual and other legal obligations.

 

Wherever possible the subsidiary follows the same policy.  The average number of days which the Company took to pay creditors was 30 days (2012: 30 days).

 

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

 

The Group uses various financial instruments and these include cash, equity investments, loan stock and various others, such as trade receivables and trade payables which arise directly from its operations.  The main purpose of these financial instruments is to raise finance for the Group's operations.

 

The structure of the Group's and Company's capital, at nominal value, is as follows:

 

 

 

 

Ordinary shares

Deferred shares

 

=========

======

==========

======

 

Further details of the policies adopted by the Group in respect of the financial risk management are included within note 19 to the Group financial statements.

 

CHARITABLE AND POLITICAL DONATIONS

 

The Group made charitable donations during the year of £100 (2012: £nil).

 

DISABLED PERSONS

 

It is the Group's policy to give sympathetic consideration to the recruitment, continuing employment, training, career development and promotion of disabled persons.

 

AUDITOR

 

By order of the Board

 

 

 

For and on behalf of haysmacintyre Company Secretaries Limited

Company Secretary

26 June 2013

 

 

 

 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

 

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Oxford    

26 June 2013

FOR THE YEAR ENDED 31 MARCH 2013

BASIS OF PREPARATION

The Company is incorporated in the United Kingdom under the Companies Act 2006.

 

These Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The policies set out below have been consistently applied to all the years presented.

 

The consolidated financial statements have been prepared using accounting policies specified by those IFRSs that are in effect at the end of the reporting period (31 March 2013) or which have been adopted early.

 

NEWLY ISSUED ACCOUNTING STANDARDS 

·      IAS 1 Presentation of Financial Statements (amendments effective 1 July 2012)

·      IAS 16 Property Plant & Equipment (amendments effective from 1 January 2013)

·      IAS 19 Employee Benefits (amendment effective from 1 January 2013)

·      IAS 27 Separate Financial Statements (amendment effective 1 January 2013)

·      IAS 28 Investments in Associates and Joint Ventures (effective from 1 January 2013)

·      IAS 32 Financial Instruments Presentation (amendment effective 1 January 2014)

·      IAS 34 Interim Finance Reporting (Revised 2011) (amendment effective 1 January 2013)

·      IFRS 1 First-time Adoption of International Financial Reporting Standards (amendment effective 1 January 2013)

·      IFRS 7 Financial Instruments (amendments effective 1 January 2013)

·      IFRS 9 Financial Instruments (effective from 1 January 2015)

·      IFRS 10 Consolidated Financial Statements (amendment effective 1 January 2013)

·      IFRS 11 Joint Arrangements (effective from 1 January 2013)

·      IFRS 12 Disclosure of Interests in Other Entities (amendment effective 1 January 2013)

·      IFRS 13 Fair Value Measurement (effective from 1 January 2013)

 

 

ASSOCIATED BRITISH ENGINEERING PLC

FOR THE YEAR ENDED 31 MARCH 2013

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 recent restructuring of the Company's capital base and the decrease in the pension scheme deficit based on this year's actuarial forecast and referred to in the Chairman's Statement. The directors have agreed a revised schedule of the contributions to eliminate the deficit on the ABE Pension Fund over thirteen years starting from the year ended 31 March 2010. 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.

 

BASIS OF CONSOLIDATION

The Group financial statements incorporate the financial statements of Associated British Engineering plc and its subsidiary undertakings to 31 March each year. All inter-company balances and transactions have been eliminated in full. The Group financial statements include the results of subsidiaries acquired or disposed of during the year from or to the effective date of acquisition or disposal.

 

BUSINESS COMBINATIONS

Acquisitions of businesses are accounted for using the acquisition method.  The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree.  Acquisition-related costs are generally recognised in profit or loss as incurred.

 

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:

 

·   deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 and IAS 19 respectively;

·   liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date; and

·   assets that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with the Standard.

 

Goodwill is measured in the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.  If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

 

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets.  The choice of measurement basis is made on a transaction-by-transaction basis.  Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

 

REVENUE RECOGNITION

Revenue is measured at the fair value of the consideration receivable by the Group for goods supplied and services provided, excluding value added tax and trade discounts. Revenue from the sale of spare parts is recognised when the goods are dispatched or, if under a bill and hold arrangement, when they are available for despatch to a specific customer. Revenue from the sale of engines is recognised in accordance with the performance of contractual terms and specifically when the engines have been satisfactorily tested in accordance with contractual terms. Revenue from servicing and repair work is recognised when the work is completed.

 

 

GROUP ACCOUNTING POLICIES (continued)

 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

ACCOUNTING ESTIMATES AND JUDGEMENTS

Management are required, in accordance with IFRS, to exercise judgement and to make estimates and assumptions regarding the application of accounting policies and the resulting effect on reported amounts of assets, liabilities, income and expenses. These estimates and assumptions are based on historical experience and a review of current conditions prevailing at the time but actual results may differ from these estimates. Any such revision is recognised in the financial statements in the period in which the change in circumstance is detected.

 

Accounting Judgements

 

The key areas where management have exercised judgement in the year, and the thought processes undertaken, are as follows:

 

Pension Scheme

The directors are in regular contact with the Trustees of the pension scheme in connection with three keys areas where judgement is exercised; the assumptions underpinning the actuarial valuation, continued negotiations regarding the pension scheme and in relation to the payment plan. The directors then assess the relevant estimates and assumptions made to ensure that where possible, all statutory obligations are met.

 

In evaluating the assumptions underpinning the actuarial valuation the directors have sought the professional advice of a firm of actuaries who prepare the valuation according to industry standards and norms. During the year under review an actuarial gain of £1,000 (2012: £643,000 gain) was recognised in the Group accounts.

 

The assumptions underpinning the actuarial valuation are disclosed further in note 17 to the Group financial statements.

 

Loan notes

The Group is also funded by £555,000 of loan notes with a 6% per annum coupon rate.  IAS 39 states that financial liabilities should initially be recognised at fair value.  The directors are of the opinion that the coupon rate is a market rate of return and therefore the loan notes were recognised at their transaction cost of £555,000, which was considered to be the same as their fair value.  During the year, these loan notes were redeemed in full.

 

Deferred tax

Please refer to Taxation Policy below and note 20.

 

Accounting Estimates

The accounting estimate having an impact on carrying amounts of assets and liabilities in the reporting period is as follows:

 

Inventories

Inventories held by the Group consist of raw material (mainly components), work in progress (manufactured engine parts) and finished goods (both purchased and manufactured engine parts). A specific provision is made, on a 100% basis, for all stock lines that are obsolete or slow moving for periods in excess of four years. A general provision is made of 5%, 12.5%, 25% and 50% over all stock lines that have not moved for one, two, three and four years respectively.

 

The inventory provision at the year end amounted to £2,145,000 (2012: £2,080,000). The gross value of inventories at the year end is £3,174,000 (2012: £3,169,000).

 

The directors review their assumptions and accounting estimates, along with the accounting policies adopted in preparing these financial statements, on a regular basis and recognise any change in the period in which circumstances vary.

 

INVENTORIES AND IMPAIRMENT OF INVENTORIES

Inventories of raw materials, work in progress and finished goods are valued at the lower of cost and net realisable value.  Work in progress and finished goods include an appropriate allocation of overheads.

 

Cost is on a first in, first out basis. Net realisable value is the estimated selling price in the normal course of business, less estimated costs of completion and provision is made for obsolete, slow moving and defective inventories.

 

GROUP ACCOUNTING POLICIES (continued)

 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

Property, plant and equipment are stated at cost less depreciation and any impairment in value.  Freehold land is not depreciated. Depreciation is calculated to write down the cost of all property, plant and equipment less its residual value by annual instalments over their expected useful lives on the following bases:

 

 

 

 

 

The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year.  Taxable profit differs from net profit as reported in the income statement 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 Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

 

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

 

 

GROUP ACCOUNTING POLICIES (continued)

 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

 

 

The Group has recognised the actuarial losses and gains immediately within the Statement of Comprehensive Income in accordance with the provisions stated within IAS 19 'Employee benefits'. 



 

GROUP ACCOUNTING POLICIES (continued)

 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

 

Share capital represents the nominal value of shares that have been issued except for the preference shares classified as debt.

 

Deferred shares represents shares arising from the sub-division of ordinary shares of £2.

 

Share premium includes any premiums received on issue of share capital.  Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

 

Retained earnings include all current and prior period retained profits and losses. 

 

Other reserves relate to movements not classified in any of the reserves detailed above.

 

All transactions with owners of the parent are recorded separately within equity.

2,488

3,342

 

 

2,519

(2,813)

 

-------------

-------------

(31)

529

(119)

(1,188)

38

30

-------------

-------------

(112)

(629)

 

 

Taxation

(15)

(28)




-------------

-------------

 

 

 

 

(127)

(657)


======

======

 

 

 

 

 

 

 

 

 
BASIC AND DILUTED

9

(6p)

(47p)

======

======



(657)

-

------------

------------

(657)

------------

------------

------------

------------

1

643

-----------

-----------

1

643

------------

------------

======

======

------------

------------

======

======

 

 

ASSETS

Non-current assets

Property, plant and equipment

 

-------------

-------------

Current assets

Inventories

Trade and other receivables

Held for trading investments

Cash and cash equivalents

 

-------------

-------------

 

 

-------------

-------------

Total assets

 

======

======

EQUITY AND LIABILITIES

Called up share capital

Deferred shares

Share premium account

Other components of equity

Retained earnings

 

--------------

--------------

Equity attributable to the Company's Equity shareholders

 

Non-controlling interests

 

--------------

--------------

Total equity

 

-------------

-------------

LIABILITIES


Non-current liabilities

Retirement benefit obligation

Loan notes

Obligation under finance leases

-

Deferred tax liabilities


 

-------------

-------------

 

 

-------------

-------------

Current liabilities

Trade and other payables

Obligations under finance leases

Current tax liabilities

 

-------------

-------------

 

 

-------------

-------------

Total liabilities

 

-------------

-------------

Total equity and liabilities

 

======

======

and were signed below on its behalf by:

 

 

Director

 

Share capital

Share premium

Deferred

shares

Other reserve

Retained earnings

Attributable to owners of the parent

Non-controlling interests

 

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 









Balance at 1 April 2011

2,627

5,038

-

11

(4,907)

2,769

-

2,769

 









Loss for the year

-

-

-

-

(657)

(657)

-

(657)

 









Other comprehensive income









Actuarial gain in defined

benefit plan

 

-

 

-

 

-

 

-

 

643

 

643

 

-

 

643

 

--------------

--------------

----------------

--------------

---------------

---------------

---------------

---------------

Total comprehensive income for the year

-

-

-

-

(14)

(14)

-

(14)

 

--------------

--------------

--------------

--------------

---------------

---------------

---------------

---------------

Capital restructuring

(2,576)

332

2,594

-

462

812

-

812

 









Balance at 31 March 2012

51

5,370

2,594

11

(4,459)

3,567

-

3,567

 

--------------

--------------

---------------

--------------

---------------

---------------

---------------

---------------

 









Loss for the year

-

-

-

-

(127)

(90)

(37)

(127)

 









Other comprehensive income









Actuarial gain in defined

 benefit plan

-

-

-

-

1

1

-

1

 

--------------

--------------

---------------

--------------

---------------

---------------

---------------

---------------

Total comprehensive income for the year

-

-

-

-

(126)

(89)

(37)

(126)

 

--------------

--------------

---------------

--------------

---------------

---------------

---------------

---------------

 









Additional non-controlling interest arising on the acquisition of Akoris Trading Limited

-

-

-

-

-

-

313

313

 









Balance at 31 March 2013

51

5,370

2,594

11

(4,585)

3,478

276

3,754

 

======

======

======

======

=======

=======

=======

======



 

 

 

 

 

Cash flows from operating activities

Cash used in operations

Interest received

Interest paid



-----------------

-----------------

 


-----------------

-----------------

Cash flows from investing activities




Proceeds from sale of equipment


Purchase of equipment


Sale proceeds from trading investments


 


-----------------

-----------------

Net cash (used in)/generated from investing activities


 


-----------------

-----------------

Cash flows from financing activities

Cash raised from open offer of shares

Cash raised from non-controlling interests

Proceeds from finance leases

Redemption of loan notes

 


-----------------

-----------------

Net cash generated from financing activities


 


-----------------

-----------------

 




Net (decrease)/increase in cash and cash equivalents


 


Cash and cash equivalents at beginning of year




-----------------

----------------

Cash and cash equivalents at end of year

 


=========

========

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

------------

------------

 

 

 

------------

------------

 

 

=====

======

 



1.       SEGMENTAL REPORTING

 

 

 

 





 

United Kingdom

 

Europe

 

Far East and Australasia

 

Africa

 

North and South America

 

Middle East

 

Russia

 


-------------

-------------

 

 

 


======

======

 

 

 

 

------------

------------

-----------

-----------

-------------

------------

------------

------------




-----------




=====





======

======

======

======


1.     SEGMENTAL REPORTING (continued)

----------

-------------

------------

----------

----------





----------



=====




=====

======

======

2.

OPERATING COSTS

 

 

 

 

 

Changes in inventories

 

Raw materials used

 

Staff costs

 

Depreciation and amortisation

 

Other expenses

 

 

-------------

-------------

 

 

 

 

======

======

 

 

3.

OPERATING PROFIT

 

 

 

Depreciation on owned assets

 

Depreciation on assets held under finance leases

 

Fees payable to the Company's auditor for the audit of the Company's annual accounts:

 

PLC audit costs

 

The audit of the Company's subsidiaries pursuant to legislation

 

Operating lease rental on plant and machinery

 

Foreign exchange gain

 

Profit on disposal of fixed assets

 


======

======



4.

 


 




 

Wages and salaries

 

Social security costs

 

Other pension costs

 


-------------

-------------

 


 


======

======

 




 

The average monthly number of persons employed by the Group during the year was:



 


 


 


 



 

Production

 

Administration

 


-------------

-----------

 


30

26

 


======

=====

5.



 

Directors received emoluments of £47,000 (2012: £35,000).  Further details can be found on page 43.

6.

KEY MANAGEMENT COMPENSATION

 

 

 

 

 

Remuneration of Group directors

 


======

======

The Group made no pension contributions in respect of Group directors during the year ended 31 March 2013 or 31 March 2012.

7.


 



 



 


 


 


 


 


 


 


 


 


 


----------

-----------

 


 


 


 



------------

------------

 



 



 



-------------

-------------

 



 



======

======

* These relate to the loss and legal/professional costs associated with the redemption of preference shares, associated dividend arrears and a capital restructuring exercise.  These costs were one off in nature.

 

8.


 



 




 



 


 


 


 


 



--------

---------

 

 



====

=====

 

The tax assessed for the period is different from the standard rate of corporation tax in the UK of 24% (2012: 26%).  The differences are explained as follows:

 



 



 

 




 


 


----------------

----------------

 

 


 


 


 


 


 


 


 



----------------

----------------

 



 



=======

========

 

The Group has trading losses of approximately £1.4 million (2012: £1.2 million), surplus advance corporation tax relief of approximately £865,000 (2012: £865,000) and capital losses of £9.2 million (2012: £9.2 million).  These are available to set against future taxable profits, taxation liabilities and capital gains respectively.  The trading losses are available to be used against future profits arising from the same trade within Associated British Engineering plc. These amounts are subject to agreement with Her Majesty's Revenue and Customs.

9.

EARNINGS PER SHARE


Basic and diluted earnings per share

=========

=========

=========

=========

=========

=========







.

 

10.

 

 

 

 

COST

At 1 April 2012

Additions

Disposals

 



----------------

-------------------

-------------------

At 31 March 2013

 



----------------

-------------------

-------------------

ACCUMULATED DEPRECIATION

At 1 April 2012

Charge for year

Eliminated on disposals

 



----------------

-------------------

-------------------

At 31 March 2013

 



----------------

-------------------

-------------------

At 31 March 2013

 



========

========

==========

At 31 March 2012

 



========

========

==========

 



CAPITAL COMMITMENTS






12.

INVENTORIES

 

 

 

 

 

Raw materials

 

Work in progress

 

Finished goods

 

 

-------------

-------------

 

 

 

 

======

======

 

 

13.

TRADE AND OTHER RECEIVABLES

 

 

 

 

 

Trade receivables

 

Prepayments and accrued income

 

 


-----------

-----------

 

 

 

 


=====

=====

 

 




 

 

 

 

 

FOR THE YEAR ENDED 31 MARCH 2013

 

14.

 

 

 

 

 

Listed Securities

 

 

====

===

 

 


 

 


 

 


 

 


 

 


 

Opening balance


 

Additions


 

Net profit recognised


 

Disposals


 

 

----------


 

Closing balance


 

 

=====


 

 


CALLED UP SHARE CAPITAL

 

Nominal value:



Allotted and fully paid:

2,048,990 ordinary shares of £0.025 each

1,313,427 deferred shares of £1.975 each

 

-------------

-------------

 

 

======

======

Carrying value:

Equity shares:

2,040,000 ordinary shares of £0.025 each

 

======

======

 


 The structure of the Group and Company's capital is as follows:


 

 

FOR THE YEAR ENDED 31 MARCH 2013

 

Previously the Group operated a defined benefit pension scheme, holding the assets in a separate trustee administered fund ("the ABE Pension Fund").  The required contributions were assessed with the advice of an independent qualified actuary using the projected unit credit method. The Group also has a designated Group personal pension plan which meets stakeholder requirements.

 

In the year ended 31 March 2009 the Company came to agreement with the Trustees of the scheme and a resolution was approved whereby the Group is no longer liable for its previously recognised retirement obligations for the ABE section of the fund. The elimination of the ABE section resulted in an elimination of £3,047,000 of the opening obligation which was reflected through the Statement of Comprehensive Income. The remaining obligation relates to the BPE section of the scheme and is summarised below:

 

FOR THE YEAR ENDED 31 MARCH 2013

 

17.

 

 

 

(a)

 

 

 

 

Operating charge

 

 

Current service cost

 

 

 

---------------

---------------

 

 

Total operating charge

 

 

 

--------------

--------------

 

 

Other finance charges

 

 

Interest on pension scheme liabilities

 

 

Expected return on pension scheme assets

 

 

 

---------------

---------------

 

 

Net finance charge

 

 

 

---------------

---------------

 

 

 

 

 

=======

=======

 

 (b)

Benefit liability

 

 

 

 

 

Present value of funded obligations

 

Fair value of plan assets

 

 

---------------

---------------

---------------

---------------

---------------

 

Net liability

 

 

=======

=======

=======

=======

=======

 

 






 

The major categories of plan assets are as follows:

 

 

 

 

 

Equities

 

Bonds

 

Cash

 

 

--------------

--------------

 

 

5,817

5,476

 

 

=======

=======

(c)

Change in benefit obligation



 

 



 

Benefit obligation at beginning of the year

 

Current service cost

 

Interest cost

 

Actuarial losses/(gains)

 

Contributions by plan participants

 

Benefits paid

 

 

---------------

---------------

 

Benefit obligation at end of the year

6,748

6,451

 

 

=======

=======

 

 

FOR THE YEAR ENDED 31 MARCH 2013

 

17.

RETIREMENT BENEFIT SCHEMES (continued)

2013

2012

 

 

£'000

£'000

(d)

Change in plan assets



 

 



 

Fair value of plan assets at beginning of the year

 

Expected return on plan assets

 

Actuarial gains on plan assets

 

Contributions made by employer

 

Contributions by plan participants

 

Benefits paid

 

 

---------------

---------------

 

Fair value of plan assets at end of the year

 

 

=======

=======

The cumulative amount of actuarial gain recognised in the Group statement of comprehensive income is £3,528,000 (2012: £3,527,000). The actuarial gain for the year recognised in the Group statement of comprehensive income is £1,000 (2012: £643,000).

 

 

 

 

 

 

 

 

Equities

 

Bonds

 

Cash

 

 

------------

------------

 

Overall rate of return for the plan

 

 

=======

======

(e)

 

 

 

Inflation

 

Rate of increase in pensionable salaries

 

Discount rate

 

Pension in payment increases

 

Revaluation rate for deferred pensioners

 

Pre-retirement mortality

 

Post retirement mortality

 

 



 

FOR THE YEAR ENDED 31 MARCH 2013

 

17.

RETIREMENT BENEFIT SCHEMES (continued)



 

 



History of experience gains and losses

 

 

(i)

Experience (gains) and losses on Scheme assets

2013

 

 

 

 

(a) Amount (£'000)

403

306

95

519

(403)

 

(b) Percentage of scheme assets

7%

6%

1%

12%

(11)%

 

 

 

 

 

 

 

(ii)

Experience (gains) and losses on scheme liabilities

 

 

 

 

 

 

    

 

 

 

 

 

 

(a) Amount (£'000)

(29)

2

92

(20)

10

 

(b) Percentage of present value of scheme liabilities

0%

0%

4%

0%

0%

 

   

 

 

 

 

 

18.

PAYABLES

 

 

 

Current

 

 

 

 

 

 

 


-----------------

-----------------

 

 

 

 


========

========

 

Non-current

 

Loan notes


 

 


-----------------

---------------

 

 

 

 


========

========

 

 

 

 

 


----------------

----------------

 

 

 

 


========

========



 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

 

 

 

 

 

 

FOR THE YEAR ENDED 31 MARCH 2013

 

 

 

20.

DEFERRED TAXATION

 

            The deferred taxation liability at 31 March 2013 was £15,000 (31 March 2012: Nil).

Group

 

 

Arising from trading losses

Arising from capital losses

Arising from pension deficit

 

-------------

-------------

 

 

======

======

21.

CONTINGENT LIABILITIES

 

 

 

 

 

a)

Banker's indemnities

 

 

====

====



 

FOR THE YEAR ENDED 31 MARCH 2013

 

22.

COMMITMENTS UNDER OPERATING LEASES

 

 

 

 

 

 

 

 

 

Within one year

 

Between two and five years  inclusive

 


-------------

-------------

 

 

======

======

 





At 31 March 2013 and 31 March 2012 the Company held 100% of the share capital of the following subsidiaries:

 

Share Capital

Proportion held by the parent

Country of incorporation

Nature of Business






British Polar Engines Limited

Ordinary

100%

Great Britain

Manufacture and supply of diesel engines, associated servicing and sale of spare parts






Danway Limited

Ordinary

100%

Cayman Islands

Dormant







Principal activity

Proportion of voting equity interests

 

Country of

incorporation

 

Date of acquisition

Consideration

transferred (cash)

£'000







Akoris Trading Limited

Commodity and natural resource trading, finance and investment.

50%

Great Britain

02/01/2013

                £312



 

·   

·   

·   

·    the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

·    the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the parent Company financial statements.

 

·  

·  

·  

·  

 

The accounts are prepared on the historical cost basis, modified to include the revaluation of current asset investments.

 

GOING CONCERN

 

The financial statements have been prepared on the going concern basis.  The most notable accounting event has been the decrease in the pension scheme deficit based on this year's actuarial forecast and mentioned in the Chairman's Statement. The directors have agreed a revised schedule of the contributions to eliminate the deficit on the ABE Pension Fund over thirteen years starting from the year ended 31 March 2010. 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.

 

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

Computer equipment       20 per cent

 

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 that have been enacted or substantively enacted by the balance sheet date.

 

FOREIGN CURRENCIES

 

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.

 

 

The company was also funded by £555,000 of loan notes with a 6% per annum coupon rate.  The loan notes were redeemed at their book value.

 

 

FIXED ASSETS

 

 

 

Tangible assets

3

1

319

Investments

5

2,484

2,484

 

-------------

-------------

 

 

------------

------------

CURRENT ASSETS



 



Investments

132

99

Debtors

Cash at bank and in hand

 

-------------

-------------

 

 

Creditors - amounts falling due within one year

 

-------------

-------------

Net current liabilities

 

------------

------------

 



Total assets less current liabilities

 

Creditors - amounts falling due after more than one year

 

-------------

-------------

 

 

======

======

CAPITAL AND RESERVES

 

Called up share capital

Deferred shares

Share premium account

Other reserve

Profit and loss account

 

-------------

-------------

SHAREHOLDERS' FUNDS

 

======

======

and were signed below on its behalf by:

 

 

 

 

 

         C Weinberg

Director

 

1.

ADMINISTRATIVE EXPENSES

 

 

 

 

 

 

 

 

Directors (note 2) and employees

 

 

Depreciation of tangible fixed assets: owned

 

 

 

 

======

======

 

 

 

2.

DIRECTORS

 

 

 

 

 

 

 

 

 

 

 

Remuneration in respect of directors was as follows:

 

 

Remuneration

 

 

 

 

======

======

 

 

 

 

 

 

3.

TANGIBLE FIXED ASSETS

Computer

 

 

equipment

 

 

£'000

 

COST

 

 

 

 

 

At 1 April 2012

2

 

Additions

-

 

Disposals

-

 

 

---------

--------------

-------------

 

At 31 March 2013

2

 

 

---------

--------------

-------------

 

DEPRECIATION

 

 

 

 

 

At 1 April 2012

1

 

Charge for the year

-

 

Disposals

-

 

 

---------

--------------

-------------

 

At 31 March 2013

1

 

 

---------

--------------

-------------

 

 

 

 

NET BOOK VALUE

 

 

 

 

 

At 31 March 2013

1

 

 

=====

======

======

 

At 31 March 2012

1

 

 

=====

======

======

 

 

 


4.

CAPITAL COMMITMENTS

 

 

 

 

 

 

 

 



5.

FIXED ASSET INVESTMENTS

 

 

 

 

 

COST

 

 

 

 

 

At 1 April 2012 and 31 March 2013

 

 

 

 


-------------

 

Amounts written off

 



 

 

 



 

At 1 April 2012 and 31 March 2013

 

 

 

 


-------------

 

Net book amount at 1 April 2012 and 31 March 2013

 

 

 

 

======

 

 

 


 

 

 

 

 

Company

Activity

 

 

 

 

British Polar Engines Limited

Engineering

 

Danway Limited

Non-trading

 

 

 

 

 

 

6

CURRENT ASSET INVESTMENTS

 

 

 

 

 

 

 

 

Equities

 

 

Cash on deposit

 

 

 

 

-------------

-------------

 

 

 

 

 

 

======

======

7.

DEBTORS

 

 

 

 

 

 

 

 

Prepayments and accrued income

 

 

 

 

-------------

-------------

 

 

 

 

 

 

======

======



 

 

8.

CREDITORS

 

 

 

 

 

Amounts falling due within one year

 

 

 

 

 

Amounts due to group undertakings

 

 

Other creditors

 

 

Accruals and deferred income

 

 

Corporation tax

 

-

2

 

 

 

-------------

-------------

 

 

 

 

 

 

======

======

 

 

 



 

Amounts falling due after one year

 

 

 

 

 

 

 

 

Amounts due to group undertakings

 

 

Loan notes

 

 

 

 

-------------

-------------

 

 

 

 

 

 

======

======

9.

DEFERRED TAXATION

 



 

 

 



 


 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

Arising from trading losses

 

 

Arising from capital losses

 

 

 

 

-------------

-------------

 

 

 

 

 

 

======

======

 

 

 



 

FOR THE YEAR ENDED 31 MARCH 2013

 

CALLED UP SHARE CAPITAL

 

Nominal value:



Allotted and fully paid:

2,048,990 ordinary shares of £0.025 each

1,313,427 deferred shares of £1.975 each share premium

 

-------------

-------------

 

 

======

======

Carrying value:

Equity shares:

2,040,000 ordinary shares of £0.025 each

 

======

======

 


12.

RESERVES

 

 

 

 

 

 

 

 

At 1 April 2012

 

 

Profit for the year

 

 

 

 

-------------

-------------

 

At 31 March 2013

 

 

 

 

======

======

 

 

 



 

·     

·     

·     

·     

·     

·     

·       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 management 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

 

 

·     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;

·  The Company does not have a Nomination Committee, this is contrary to provisions B2.1-B2.2;

 

·     The non-executive directors of the Company have not been appointed for specific terms as required by   provision B2.3;

·     There is no formal training programme for new directors on joining the Board. This is contrary to provision B4.2;

·     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.

 

 

. 

 



 

-             

-             

-             

-             

-             

-             

-             

The Board believes that it is not currently appropriate for the Company to maintain an internal audit function due to the size of the Group and the manner in which the Board are involved in payment and financial commitment execution.

 

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 year and information on the nature of the non-audit fees appear in note 3 to the financial statements.  There were no non-audit fees incurred from the auditor during the year. The Board also receive an annual confirmation of independence from the auditors.

 

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 decrease in the pension scheme deficit based on this year's actuarial forecast and mentioned in the Chairman's Statement. The directors have agreed a revised schedule of the contributions to eliminate the deficit on the ABE Pension Fund over thirteen years starting from the year ended 31 March 2010. 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.

 

 

 

C Weinberg

Director

 

 

 

 

 

 

Total Shareholder Return (TSR)

 

 

 

Source: Yahoo UK finance

                       

 

 



--------

--------



====

====

On behalf of the Board

 

 

 

 

 

 

 

 

BANKERS

CORPORATE ADVISERS

 

 


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The company news service from the London Stock Exchange
 
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