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COMPANY REGISTRATION NUMBER: 01797996
MAJESTIC ENGINEERING LIMITED
UNAUDITED FINANCIAL STATEMENTS
31 July 2017
MAJESTIC ENGINEERING LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 31 JULY 2017
Contents
Page
Officers and professional advisers
1
Chartered accountant's report to the director on the preparation of the unaudited statutory financial statements
2
Statement of financial position
3
Notes to the financial statements
5
MAJESTIC ENGINEERING LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
Director
K Ballinger
Registered office
Hanover Buildings
11-13 Hanover Street
Liverpool
L1 3DN
Accountants
ERC Accountants & Business Advisers Limited
Chartered accountant
Hanover Buildings
11-13 Hanover Street
Liverpool
L1 3DN
MAJESTIC ENGINEERING LIMITED
CHARTERED ACCOUNTANT'S REPORT TO THE DIRECTOR ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF MAJESTIC ENGINEERING LIMITED
YEAR ENDED 31 JULY 2017
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Majestic Engineering Limited for the year ended 31 July 2017, which comprise the statement of financial position and the related notes from the company's accounting records and from information and explanations you have given us. As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at www.icaew.com/en/membership/regulations-standards-and-guidance. This report is made solely to the director of Majestic Engineering Limited in accordance with the terms of our engagement letter dated 19 June 2017. Our work has been undertaken solely to prepare for your approval the financial statements of Majestic Engineering Limited and state those matters that we have agreed to state to you in this report in accordance with ICAEW Technical Release 07/16 AAF as detailed at www.icaew.com/compilation. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Majestic Engineering Limited and its director for our work or for this report.
It is your duty to ensure that Majestic Engineering Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and profit of Majestic Engineering Limited. You consider that Majestic Engineering Limited is exempt from the statutory audit requirement for the year. We have not been instructed to carry out an audit or a review of the financial statements of Majestic Engineering Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
ERC Accountants & Business Advisers Limited Chartered accountant
Hanover Buildings 11-13 Hanover Street Liverpool L1 3DN
22 December 2017
MAJESTIC ENGINEERING LIMITED
STATEMENT OF FINANCIAL POSITION
31 July 2017
2017
2016
Note
£
£
£
FIXED ASSETS
Tangible assets
5
85,832
82,367
CURRENT ASSETS
Stocks
11,370
11,370
Debtors
6
130,861
153,336
----------
----------
142,231
164,706
CREDITORS: Amounts falling due within one year
7
93,517
85,195
----------
----------
NET CURRENT ASSETS
48,714
79,511
----------
----------
TOTAL ASSETS LESS CURRENT LIABILITIES
134,546
161,878
CREDITORS: Amounts falling due after more than one year
8
2,823
PROVISIONS
Taxation including deferred tax
14,808
13,994
----------
----------
NET ASSETS
116,915
147,884
----------
----------
CAPITAL AND RESERVES
Called up share capital
100
100
Profit and loss account
116,815
147,784
----------
----------
SHAREHOLDERS FUNDS
116,915
147,884
----------
----------
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
In accordance with section 444 of the Companies Act 2006, the statement of income and retained earnings has not been delivered.
MAJESTIC ENGINEERING LIMITED
STATEMENT OF FINANCIAL POSITION (continued)
31 July 2017
For the year ending 31 July 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Director's responsibilities:
- The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476 ;
- The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements .
These financial statements were approved by the board of directors and authorised for issue on 22 December 2017 , and are signed on behalf of the board by:
K Ballinger
Director
Company registration number: 01797996
MAJESTIC ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 JULY 2017
1. GENERAL INFORMATION
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Hanover Buildings, 11-13 Hanover Street, Liverpool, L1 3DN.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Transition to FRS 102
The entity transitioned from previous UK GAAP to FRS 102 as at 1 August 2015. Details of how FRS 102 has affected the reported financial position and financial performance is given in note 12.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax.
Corporation tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. Deferred tax is recognised in respect of all material timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant & Machinery
-
25% reducing balance
Motor Vehicles
-
25% reducing balance
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. 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 return on the outstanding liability.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. EMPLOYEE NUMBERS
The average number of persons employed by the company during the year amounted to 5 (2016: 5 ).
5. TANGIBLE ASSETS
Land and buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 August 2016
75,000
86,248
17,682
178,930
Additions
8,290
8,290
Disposals
( 8,932)
( 8,932)
---------
---------
---------
----------
At 31 July 2017
75,000
86,248
17,040
178,288
---------
---------
---------
----------
Depreciation
At 1 August 2016
85,398
11,165
96,563
Charge for the year
213
1,786
1,999
Disposals
( 6,106)
( 6,106)
---------
---------
---------
----------
At 31 July 2017
85,611
6,845
92,456
---------
---------
---------
----------
Carrying amount
At 31 July 2017
75,000
637
10,195
85,832
---------
---------
---------
----------
At 31 July 2016
75,000
850
6,517
82,367
---------
---------
---------
----------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 July 2017
7,426
-------
At 31 July 2016
2,826
-------
6. DEBTORS
2017
2016
£
£
Trade debtors
87,819
97,996
Other debtors
43,042
55,340
----------
----------
130,861
153,336
----------
----------
7. CREDITORS: Amounts falling due within one year
2017
2016
£
£
Bank loans and overdrafts
6,706
4,092
Trade creditors
72,730
69,001
Corporation tax
4,780
5,699
Social security and other taxes
4,468
1,198
Other creditors
4,833
5,205
---------
---------
93,517
85,195
---------
---------
The debenture is secured by fixed and floating charges over the undertaking and all property and assets present and future including goodwill, bookdebts, uncalled capital, buildings, fixtures and plant and machinery.
8. CREDITORS: Amounts falling due after more than one year
2017
2016
£
£
Other creditors
2,823
-------
----
9. OPERATING LEASES
The total future minimum lease payments under non-cancellable operating leases are as follows:
2017
2016
£
£
Not later than 1 year
10,800
10,800
---------
---------
10. DIRECTOR'S ADVANCES, CREDITS AND GUARANTEES
A director had brought forward interest free advances, which are repayable on demand, totalling £51,829. Advances totalling £ 39,733 were made during the year and amounts totalling £ 52,000 were repaid. The advance carried forward is £39,562.
11. RELATED PARTY TRANSACTIONS
The following related party transactions were undertaken during the year: A director and shareholder , withdrew amounts totalling £ 39,733 and introduced amounts totalling £ 52,000 (2016: withdrew amounts totalling £26,045 and paid for shares using the business totalling £28,800). At the year end the balance payable by the director was £ 39,562 (2016: £51,829). No further transactions with related parties were undertaken such as are required to be disclosed in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
12. TRANSITION TO FRS 102
These are the first financial statements that comply with FRS 102. The company transitioned to FRS 102 on 1 August 2015.
Reconciliation of equity
1 August 2015
31 July 2016
As previously stated
Effect of transition
FRS 102 (as restated)
As previously stated
Effect of transition
FRS 102 (as restated)
£
£
£
£
£
£
Fixed assets
9,823
75,000
84,823
7,367
75,000
82,367
Current assets
162,463
162,463
164,706
164,706
Creditors: amounts falling due within one year
( 95,649)
( 95,649)
( 84,729)
( 466)
( 85,195)
----------
---------
----------
----------
---------
----------
Net current assets
66,814
66,814
79,977
( 466)
79,511
----------
---------
----------
----------
---------
----------
Total assets less current liabilities
76,637
75,000
151,637
87,344
74,534
161,878
Creditors: amounts falling due after more than one year
( 1,670)
( 1,670)
Provisions
( 14,514)
( 14,514)
( 13,994)
( 13,994)
----------
---------
----------
----------
---------
----------
Net assets
74,967
60,486
135,453
87,343
60,541
147,884
----------
---------
----------
----------
---------
----------
----------
---------
----------
----------
---------
----------
Capital and reserves
74,967
60,486
135,453
87,343
60,541
147,884
----------
---------
----------
----------
---------
----------
Deferred tax FRS 102 requires deferred tax to be recognised on all timing differences. This has resulted in an increase in the deferred tax liability on transition of £1,764. In the year to 31 July 2016 the deferred tax charged reduced by £521 with a corresponding decrease to the deferred tax liability. Holiday Pay FRS 102 requires a holiday pay accrual to be recognised. This has resulted in a holiday pay accruals liability in the year to 31 July 2016 of £466. Long Leasehold Property FRS 102 requires that properties included in the accounts which depreciation is not charged on, must be included at open market value. This has resulted in the profit and loss account reserve on transition increasing by £75,000. Deferred tax on property revaluation FRS 102 requires deferred tax to be recognised on property revaluation gains and losses which resulted in an increase to the deferred tax liability on transition of £12,750.
13. PROFIT AND LOSS RESERVE ACCOUNT
2017
2016
£
£
Profit and loss distributable
41,815
72,784
Profit and loss non-distributable
75,000
75,000
----------
----------
Reserves carried forward
116,815
147,784
----------
----------