Majestic Engineering Limited Company Accounts

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