ASSOCIATED BRITISH ENGINEERING PLC

 

FINANCIAL HIGHLIGHTS

 

			30 Sep	31 Mar
			2020	2019
			£'000	£'000
REVENUE			165	1,134
OPERATING PROFIT/ (LOSS)			139	(1,742)
PROFIT/ (LOSS) BEFORE TAXATION			145	(1,810)
NET ASSETS/ (LIABILITIES)			591	(3,708)
BASIC PROFIT/ (LOSS) PER 2.5p ORDINARY SHARE			263.0p	(84.5p)
EQUITY SHAREHOLDERS' FUNDS PER 2.5p ORDINARY SHARE			£0.29	(£1.81)

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

CHAIRMEN'S STATEMENT

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

 

The shareholders of Associated British Engineering Plc (ABE) will be disappointed that the operations of its main subsidiary British Polar Engines Ltd (BPE) failed to improve since the last annual accounts and up to the beginning of 2020 to a sufficient degree to counter the drag of the historic pension fund liabilities. Following a period of marketing and approval at the shareholder meeting held on 3 August 2020, the Group disposed of its shareholding in BPE together with its loan to that company. Consequently as at 30 September 2020 the Group had one remaining subsidiary, Akoris Trading Limited, and some investments. 

 

The actuarial increases to the liabilities of the pension fund together with judgement of likely future actuarial movements meant that there seemed to be no end in sight to actuarial increases and reducing the deficit. While the disposal of BPE is regrettable it had proved necessary for the future of BPE for it to combine with another business.  

 

You will see from our financial numbers and the balance sheet that in the period our net assets have improved by over £4 million. This is due primarily to the Pension Fund no longer being a liability of the Group as at 30 September 2020.  We are unable to comment on the trading of BPE as we have been denied access to the accounts of our former subsidiary. We do not believe that this impacts in any way on our balance sheet position as at 30 September 2020.  

 

It is hoped that the BPE staff and the business at Helen Street will prosper under its new ownership with a more diverse business model and that BPE will contribute profits for its new owners. We take this opportunity to thank all of our former group employees for their support over many years and especially from the start of the Pandemic in early 2020. 

 

The Board has, meanwhile, taken the opportunity to again reduce the cost base of the remaining parts of the Associated British Engineering Plc group. Since the year end the investments have made a useful gain in value and the company has started the process of diversifying the investments. It is expected that these and future capital gains will be tax free due to inherited capital gains tax losses; the Board will take the opportunity to liquidate investments and invest for future growth when suitable opportunities occur.  

 

Your company is now in a position to talk to potential acquisitions without having to consider the impact of the pension fund and related historical deficits. Your Board is now committed to using all its efforts to identifying and acquiring a new business with growth potential and hopefully showing profits for our group and a financial return for our patient shareholders.

 

 

 

 

 

 

 

 

 

Rupert Pearce Gould and Colin Weinberg

           

Chairmen

 

 

Date: 30 March 2021

 

ASSOCIATED BRITISH ENGINEERING PLC

 

DIRECTORS' REPORT

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

The directors submit their report and audited accounts for the period ended 30 September 2020.

 

RESULTS AND DIVIDENDS

 

The Group's profit after tax and exceptional items amounted to £144,800 (2019: £1,731,000 loss). The directors are unable to recommend a dividend on the ordinary shares for the period (2019: £Nil per ordinary share).

 

DIRECTORS

 

The names of the directors who served during the period from 1 April 2019 to 30 September 2020 are:

 

Mr C Weinberg	Director
Mr R Pearce Gould	Director

 

Biographical details of the directors are set out on page 55.

 

With regard to the appointment and replacement of directors, the Company is governed by its Articles of Association, the Corporate Governance Code, the Companies Act 2006 and related legislation.

 

In accordance with the Articles of Association Mr R Pearce Gould retires by rotation and, being eligible, offers himself for re-election.

 

DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

 

The group has, as permitted by s.234 and s.235 of the Companies Act 2006, maintained insurance cover on behalf of the directors and secretary indemnifying them against certain liabilities which may be incurred by them in relation to the company.

 

SUBSTANTIAL HOLDINGS

 

As at 18 February 2021 and at 30 September 2020 the Company had been notified of the following substantial interests, in excess of 3%, in the issued ordinary share capital of the Company:

 

Shareholders	Notes
The Bank of New York (Nominees) Limited	The Bank of New York Nominees owns 12.98% of issued ordinary shares, of which Colin Weinberg. owns 3.44% of issued share capital.
Fiske Nominees Limited (FISKPOOL)	FISKPOOL owns 12.87% of issued ordinary shares, of which Stephen Cockburn has a combined beneficial and non beneficial interest in 7.53% of issued share capital.
R A Pearce Gould	Mr Pearce Gould's overall holding is 12.89% of issued ordinary shares, which includes Rulegale below.
Stephen Cockburn	Mr Cockburn's overall beneficial and non beneficial interest is 9.18% of issued ordinary shares, including Fiske Nominees above.
C Weinberg	Mr Weinberg's overall holding is 8.22% of issued ordinary shares, including Bank of New York above.
Lynchwood Nominees Limited (2006420)	Lynchwood owns 6.74% of issued ordinary shares.
Rulegale Nominees Limited (JAMSCLT)	JAMSCLT owns 5.28% of which Mr R A Pearce Gould has all of the issued ordinary shares.
ASSOCIATED BRITISH ENGINEERING PLC DIRECTORS' REPORT (continued) FOR THE PERIOD ENDED 30 SEPTEMBER 2020 ___________________________________________________________________________________
Shareholders                                                     Hargreaves Lansdown (Nominees) Ltd (VRA)	Notes   Hargreaves Lansdown owns 5.27% of issued ordinary shares.
W B Nominees Limited	W B Nominees Limited owns 4.39% of issued ordinary shares.
Barclays Direct Investing Nominees Ltd (Clients)	Barclays Direct owns 3.68% of issued ordinary shares.
Vidacos Nominees Limited (BBUCCC)	BBUCCCC owns 3.40% of which Graeme Marshall owns all of the issued ordinary shares.
Winterflood Securities Limited (WINSCREEP)	Winterflood Securities owns 3.04% of issued share capital.

 

BENEFICIAL INTERESTS IN SIGNIFICANT CONTRACTS

 

None of the directors had a material interest in any contract of significance to which the Company or any of its subsidiaries was party during the period.

 

BENEFICIAL INTERESTS IN THE SHARE CAPITAL OF THE COMPANY

 

The beneficial interests of the directors, who served during the period, their spouses and dependents in the share capital of the Company according to the register kept by the Company as at 1 April 2019 and 30 September 2020 were as follows:

 

	Ordinary shares of
	2.5p              2.5p
	2020	2019
	No.	No.
Mr C Weinberg	168,404	167,416
Mr R Pearce Gould	264,049	264,049

 

No share options or derivatives were held by any of the directors at 30 September 2020 or 1 April 2019.

 

Since 30 September 2020 and up to and including 12 March 2021 there have been no changes in the directors' interests in the share capital of the Company.

 

 

FINANCIAL INTERESTS

 

The Group uses various financial instruments and these include cash, equity investments 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.

 

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 and the Strategic Report.

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

DIRECTORS' REPORT (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

. FINANCIAL INTERESTS - CAPITAL

 

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

	No. in issue		Nominal Value		Total Value		% of Capital
			£		£		£
Ordinary shares	2,048,990		0.025		51,255		1.9
Deferred shares	1,313,427		1.975		2,594,018		98.1

 

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.

 

EMPLOYEES

 

The Group recognises the importance of employees to the success of the business and ensures that they are fully informed of events that directly affect them and their working environment.

 

GLOBAL GHG EMISSIONS DATA FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

As reported elsewhere, the directors have no information on BPE or its Global GHG. The Global GHG for the other parts of the Group for the period covered by these accounts was zero.

 

GOING CONCERN

 

After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group will have adequate resources to continue in operational existence for the foreseeable future.

 

AUDITOR AND DISCLOSURE OF INFORMATION TO THE AUDITOR

 

On 12 March 2020, Haysmacintyre LLP resigned as Auditors of the Company.

 

Bright Grahame Murray were appointed as Auditors to the Company and 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.

 

So far as the Directors are aware, there is no relevant audit information that has not been brought to the attention of the Company's auditor. Each Director has taken all reasonable steps to make himself aware of any relevant audit information and to establish that such information was provided to the auditor.

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

 

A resolution to confirm the reappointment of Bright Grahame Murray as auditor of the Company will be proposed at the 2021 AGM. The confirmation has been recommended to the Board by its Audit Committee and Bright Grahame Murray have indicated their willingness to remain in office.

 

By order of the Board

 

 

 

 

                                                                                                                                                  Colin Weinberg

                                                                                                         For and on behalf of the Board of Directors

                                                                                                                                             Date: 30 March 2021

 

ASSOCIATED BRITISH ENGINEERING PLC

 

STRATEGIC REPORT

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

BUSINESS REVIEW

 

A review of the business and of events during the period is contained in the Chairmen's Statement on page 2 which forms part of the Strategic Report.

 

BUSINESS MODEL AND STRATEGY

 

The Associated British Engineering Group has one subsidiary undertaking:                     

 

Akoris Trading Limited ("Akoris").

 

On 4 August 2020, the Group disposed of its investment in British Polar Engines ("BPE"), as outlined in note 10, page 42 of these financial statements.

 

BPE's business model and strategy:

 

On 2 July 2019, the Company made an announcement to the Stock Exchange in relation to the proposed future of BPE. It was in advanced discussions prior to the 2019 year-end and, as a consequence of this process, it was decided by the Board of BPE that they should engage FRP Advisory LLP to advise on negotiations with the Trustees of the Pension Fund and the Pensions Regular and consider the future of the operating business of BPE including marketing the company for sale. As shareholders are aware the Company disposed of its interest in BPE on 4 August 2020 immediately following authorisation by shareholders.

 

PRINCIPAL RISKS AND UNCERTAINTIES FACING THE BUSINESS

 

The Group's main operating business was its subsidiary BPE.  The sale of BPE took place on 4 August 2020.The group now operates only one subsidiary.

 

The Board controls risks by adopting appropriate strategies and maintaining strong systems of internal control.

 

These strategies however cannot attempt to eliminate all risk, but control the risks that we believe are appropriate to take to maintain the group. Details of the group's risk management processes are given in the Corporate Governance report on page 50.

 

We have considered below the current risk factors that are considered by the Board to be material. However, in a changing world, new risks may appear or immaterial risks may become more important, and the directors will develop appropriate strategies.

 

The Board is looking to identify additional business to acquire with either high profitability or with the prospect of significant profitability.

 

Market conditions

The company has currently no significant trade. There remains a risk regarding the marketability of some of its investments and the ability to liquidate them. 

 

Reputational risk

Over many periods the Group has built up a reputation for integrity and is aware that this can be easily damaged with the consequential cost. To mitigate this risk, policies are in place which, cover standards of behaviour and good governance.

 

COVID-19 risk

Following the disposal of BPE and the low numbers of employees, COVID-19 does not affect the Group.

 

Brexit risk

As the service we provide is predominantly delivered to UK-based customers, the impact of Brexit on our business is not as significant as it is to other businesses. As a Board, we will continue to closely monitor developments in the UK Government's Brexit plans and any potential impacts on the company and so like most businesses we are keen to have certainty over how Brexit will be implemented.

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

STRATEGIC REPORT (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

Defined Benefit pension scheme funding

As previously stated, the subsidiary undertaking BPE was sold on 4 August 2020 and as a consequence the Group no longer has an exposure to any defined benefit scheme.

 

Cyclical nature of the business

The trading outlook for the Group remains unpredictable due to the requirement to identify a trading business in the midst of a Global pandemic

 

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 over the long term 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.

 

                                                                                                                          

 

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

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

STRATEGIC REPORT (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

Our employees

 

Whilst the Group does not have a specific human rights policy, it has a strong commitment to upholding the principles of human rights across our business.

 

CORPORATE GOVERNANCE

 

Details of corporate governance, which is part of this report for the period to 30 September 2020, are disclosed in the corporate governance report on page 47.

 

CORPORATE SOCIAL RESPONSIBILITY

 

The Group is committed to the protection of the environment and the development of processes which ensure that any adverse impact on the environment arising from its trading activities is minimised by encouraging reduction in waste, awareness of recycling, and encouraging employees to pay regard to environmental issues.

 

Employees

 

The Group's ability to achieve its commercial objectives and to service the needs of society and its customers in a profitable and competitive manner depends on the contribution of its employees. Employees are encouraged to develop their contribution to the business wherever they happen to work. The Group regularly keeps employees up to date with financial and other information.

 

The Group currently employs three people, made up of two male part time executives and one male part time administrator.

 

	Total no. of officers/employees	Number of males %	Number of females %
Senior Management	2	100	0
Whole Workforce	1	100	0

 

 

By order of the Board

 

 

 

 

 

                                                                                                                                                    Colin Weinberg

                                                                                                           For and on behalf of the Board of Directors

 

                                                                                                                                             Date: 30 March 2021

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF

 

ASSOCIATED BRITISH ENGINEERING PLC

 

 

Disclaimer of opinion

 

We were engaged to audit the financial statements of Associated British Engineering PLC (the "parent company") and its subsidiary companies (the "Group") for the period ended 30 September 2020 which comprise of the consolidated income statement, the consolidated statement of comprehensive income, the Group statement of financial position, the Group statement of cash flows, the Group statement of changes in equity, the Company balance sheet, the Company statement of changes in equity, the Company statement of cash flows and the notes to the financial statements, including a summary of significant accounting policies.   The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as applied in accordance with the provisions of the Companies Act 2006.

 

We do not express an opinion on the accompanying financial statements of the group.  Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

 

Basis for disclaimer of opinion

 

On 4 August 2020 the company disposed of its investment in British Polar Engines Limited which was the main trading subsidiary of Associated British Engineering PLC.  We have been unable to obtain from the management of British Polar Engines Limited details of the profit and loss account during the period 1 April 2019 until the date of disposal in August 2020.  We are therefore unable to confirm or verify by alternative means the amounts included in the consolidated statement of comprehensive income.  As a result of this matter we have been unable to determine whether any adjustments might have been found necessary to the elements included in the consolidated statement of comprehensive income or consolidated statement of cash flows. This has not impacted our work on the consolidated statement of financial position as at the 30 September 2020 and the remainder of the group, as the assets and liabilities of the disposed subsidiary are not included at the balance sheet date.  The parent company statement of financial position is also unaffected as the investment has been disposed.

 

An overview of the scope of our audit

 

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

 

The Group includes the listed parent Company (Associated British Engineering PLC) and the main trading entity (British Polar Engines Limited). The Group's accounting process is structured around finance teams based in Cambridge and Glasgow, maintaining their own accounting records and controls.

 

The main focus of our audit has been the parent company as explained above the main trading subsidiary, British Polar Engines Limited, was disposed of during the period.

 

Our application of materiality

 

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on the financial statements. For the purposes of determining whether the financial statements are free from material misstatement we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced.

 

We determined materiality for the Group to be £15,000, which is 2.64% of gross assets. Gross assets is used as the benchmark for materiality as it is considered the critical performance measure of the Group. We use a different level of materiality, performance materiality, to drive the extent of our testing and this was set at 83.33% of financial statement materiality for the audit of the group financial statements.

 

 

 

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF

 

ASSOCIATED BRITISH ENGINEERING PLC

 

 

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £750 as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

 

Other information

 

The other information comprises the information included in the annual report as set out on pages 1 to 54 other than the financial statements and our auditor's report thereon. The Directors' are responsible for the other information.

 

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

 

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

 

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information we are required to report on that fact. We have nothing to report in this regard.

 

In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other information and to report as uncorrected material misstatements of the other information where we conclude that those items meet the following conditions:

 

·      Fair, balanced and understandable set out on page 50 - the statement given by the Directors that they consider the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy, is materially inconsistent with our knowledge obtained in the audit; or

 

·      Audit Committee reporting set out on pages 48 and 49 - the section describing the work of the audit committee does not appropriately address matters communicated by us to the audit committee; or

 

·      Directors' statement of compliance with the UK Corporate Governance Code set out on page 47 - the parts of the Directors' statement required under the Listing Rules relating to the Company's compliance with the UK Corporate Governance Code containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK Corporate Governance Code.

 

 

Opinion on other matters prescribed by the Companies Act 2006

 

Because of the significance of the matter described in the basis for disclaimer opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit:

 

·      the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements and those reports have been prepared in accordance with applicable legal requirements;

 

 

 

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF

 

ASSOCIATED BRITISH ENGINEERING PLC

 

 

·      the information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has been prepared in accordance with applicable legal requirements; and

 

·      information about the company's corporate governance code and practices and about its administrative, management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.

 

Matters on which we are required to report by exception

 

Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in;

 

·      the strategic report or the directors' report; or

 

·      the information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.

 

Arising from the limitation of our work referred to above:

 

·      We have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

 

·      We were unable to determine whether adequate accounting records have been kept.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

·      returns adequate for our audit have not been received from branches not visited by us; or

 

·      the parent company financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or

 

·      certain disclosures of directors' remuneration specified by law are not made; or

 

·      a corporate governance statement has not been prepared by the parent company.

 

 

Corporate governance statement The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the group's compliance with the provisions of the UK Corporate Governance Statement specified for our review.

 

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

 

·    Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on pages 50 and 51;

 

·    Directors' explanation as to its assessment of the entity's prospects, the period this assessment covers and why the period is appropriate set out on pages 50 and 51.

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF

 

ASSOCIATED BRITISH ENGINEERING PLC

 

 

·    Directors' statement on fair, balanced and understandable set out on page 50;

 

·    Board's confirmation that it has carried out a robust assessment of the e-merging and principal risks set out on page 50;

 

·    The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 50; and;

 

·    The section describing the work of the audit committee set out on page 48.

 

Responsibilities of Directors

 

As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the Group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative to do so.

 

Those charged with governance are responsible for overseeing the Group's financial reporting process.

 

Auditor's responsibilities for the audit of the financial statements

 

Our responsibility is to conduct an audit of the company's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report. However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

 

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

 

The objectives of our audit, in respect to fraud are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

 

Our approach was as follows:

 

·      We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant are the Companies Act 2006, the Listing Rules and the UK Corporate Governance Code.

 

·      We understood how the Group is complying with those frameworks through discussions with the Audit Committee and management in combination with a review of the Group's documented policies and procedures.

 

·      We assessed the susceptibility of the Group's financial statements to material misstatement including how fraud might occur by considering the key risks impacting the financial statements. Given the activities of the Group, we consider management override as being most likely to occur in the recognition of revenue.

 

·      We have reviewed that the Group's control environment is adequate for the size and operating model of such a listed Company.

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF

 

ASSOCIATED BRITISH ENGINEERING PLC

 

 

Other matters we are required to address

 

Following recommendations of the audit committee, we were appointed by the audit committee to audit the financial statements for the period ending 30 September 2020 and subsequent financial periods. The period of total uninterrupted engagement is 1 year which covers the period ending 30 September 2020.

 

The non-audit services prohibited by the FRC's Ethical Standard were not provided to the group or the parent company and we remain independent of the group and the parent company in conducting our audit.                                   

 

Our audit opinion is consistent with the additional report to the Audit Committee.

 

Use of our report

 

This report is made solely to the parent company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

 

 

 

Matthew Eade

Senior Statutory Auditor

For and on behalf of Bright Grahame Murray

Emperor's Gate

114a Cromwell Road

Kensington

London

SW7 4AG

 

Date: 30 March 2021

 

 

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP AND PARENT COMPANY ACCOUNTING POLICIES

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

 

BASIS OF PREPARATION

The Company is a public limited company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on the final page of this annual report.

 

The financial statements have been prepared on the going concern basis. In the prior period, the financial statements were prepared on the break-up basis.

 

These Group consolidated accounts and the company accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (EU) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

The Company's ordinary shares are listed on the London Stock Exchange (LSE) under the ticker (ASBE) albeit that at the date of preparation share trading was suspended. These financial statements are presented in pound sterling because that is the currency of the primary economic environment in which the Group operates and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

 

The Company's accounting reference date is 30 September. These financial statements are for the period 1 April 2019 to 30 September 2020 (18 months). The comparative figures are for the period 1 April 2018 to 31 March 2019.

 

NEWLY ISSUED ACCOUNTING STANDARDS 

The following standards and amendments to existing standards became effective from 1 January 2020 and are applicable for the current reporting period:

 

·      Amendments to IFRS 3, Business Combinations. The amendment clarifies the definition of a business by providing a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

 

·      Amendments to IAS 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The amendments clarify the definition of 'materiality' and how it should be applied. The amendments also improve the explanations of the definition and ensure consistency across all IFRS standards.

 

·      Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition and Measurement, and IFRS 7, Financial Instruments: Disclosures. The amendments provide relief from specific hedge accounting requirements to address the potential uncertainty caused by the IBOR reform.

 

The adoption of the above new and revised standards had no impact on the financial statements of the Group for the period ended 30 September 2020.

 

The following amendments to existing standards have been issued, but will become effective for annual periods beginning on or after 1 January 2021.

 

·      Amendments to IAS 1, Presentation of Financial Statements. The amendments clarify the basis used for the classification of current and non-current liabilities.

 

·      Amendments to IAS 8, Accounting policies, Changes in Accounting Estimates and Errors. The amendments introduce the definition of an accounting estimate and include other amendments to IAS 8 to distinguish changes in accounting estimates from changes in accounting policies.

 

·      Amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The amendments clarify the costs that should be included when assessing whether a contract is onerous.

 

 

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP AND PARENT COMPANY ACCOUNTING POLICIES (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

GOING CONCERN

The Company has sufficient financial resources. As a consequence, the Directors believe the Company is well placed to manage its business risks successfully, including the impact of Covid-19 and Brexit. The Directors regularly review the forecasts.

 

In accordance with their responsibilities, the Directors of the Company have considered the appropriateness of the going concern basis, which has been used in the preparation of these financial statements. The Directors have prepared trading and cash flow forecasts for the Company, which take into account the future performance of the Company and consider the impact of the Covid-19 pandemic. The forecasts, including allowance for reasonable possible changes in trading performance indicate that the Company should be able to operate for at least 12 months from the approval of these financial statements. The Strategic Report and Directors Report includes further disclosure on the Covid-19 impact.

 

The forecasts for the 12 months from approval of these financial statements have been considered. As a result of the above assessment, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a minimum period of 12 months from the date of signing these financial statements. Thus, they are adopting the going concern basis in preparing the annual financial statements.

 

BASIS OF CONSOLIDATION

The consolidated accounts include the Company and its subsidiary undertaking (from the date of acquisition or to the date of disposal where applicable). Intra group sales and profits are eliminated on consolidation. The accounts of the subsidiary undertaking are made up to 30 September 2020.

 

A subsidiary is an entity controlled, either directly or indirectly, by the Company, where control is the power to govern the financial and operating policies of the entity so as to obtain benefit from its activities. The acquisition method of accounting is used to account for acquisition of subsidiaries by the Group. The cost on an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange. Acquisition costs are expensed in the consolidated income statement for the period in which they are incurred.

 

The consolidated financial statements consist of the results of the following entities:

 

Entity                                                                                           Summary Description

 

Associated British Engineering Plc (ABE)                                                    Holding Company

 

Akoris Trading Ltd (AT)                                                             Trading Company

 

British Polar Engines Ltd (BPE)                                                                Trading Company. Disposal in the year.   

                                                                                                                   Please refer to note 10 on page 42. 

 

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.

 

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.

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP AND PARENT COMPANY ACCOUNTING POLICIES (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

ACCOUNTING JUDGEMENTS

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

 

DEFERRED TAX

Judgement is applied by management in determining the extent to which the recovery of carried forward tax losses is probable for the purpose of meeting the criteria for recognition as deferred tax assets. Note 20 sets out information on carried forward tax losses for which a deferred tax asset has not been recognised.

 

Accounting estimates

The key accounting estimates having an impact on carrying amounts of assets and liabilities in the reporting period are as follows:

 

INVENTORIES

Inventories are stated at the lower of cost (including an appropriate proportion of attributable supplier rebates and discounts) and net realisable values.

 

Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Provision is made for obsolete or slow-moving inventories where appropriate.

 

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.

 

PROVISION FOR DOUBTFUL DEBTS

At the balance sheet date, each subsidiary evaluates the recoverability of trade receivables and records provisions for doubtful or disputed debts based on experience including comparisons of the relative age of accounts and consideration of the history. The actual level of debt collected may differ from the estimated levels of recovery and could impact future operating results positively or negatively. As at 30 September 2020 the Group has provided £Nil (2019: £834,000) against its trade receivables.

 

LEASED ASSETS

Leases of property and plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Assets held under finance leases are capitalised at lease inception at the lower of the asset's fair value and the present value of the minimum lease payments. Obligations related to finance leases, net of finance charges in respect of future periods, are included as appropriate within borrowings. The interest element of the finance cost is charged to the income statement over the life of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant or equipment is depreciated on the same basis as owned plant and equipment or over the life of the lease, if shorter.

 

Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Operating lease rentals (net of any related lease incentives) are charged against profit on a straight line basis over the period of the lease.

 

FOREIGN CURRENCIES

The functional and presentational currency of the parent company and its subsidiaries is UK Pound Sterling, rounded to the nearest thousand. Transactions in currencies other than the functional currency are translated at the rate ruling at the date of the transaction. At each balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Any gains or losses arising from the transactions are taken to the income statement.

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP AND PARENT COMPANY ACCOUNTING POLICIES (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

PROPERTY, PLANT AND EQUIPMENT

Plant and equipment are stated at cost less depreciation and any impairment in value. Depreciation is calculated to write down the cost of all plant and equipment less its residual value by annual instalments over their expected useful lives on the following bases:

 

Plant and machinery                  7½- 33⅓ per cent straight line

 

These useful lives and residual values are reviewed in each financial period.

 

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or where shorter, over the term of the relevant lease.  The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised as income.

 

The carrying values of plant and machinery are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.  If any such indication exists, and where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to their recoverable amounts.

 

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

 

Current tax payable is based on the taxable profit or loss for the period.  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 periods 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.

 

Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of reversal of the temporary differences is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

 

CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and short term deposits with a maturity of three months or less which are subject to an insignificant risk of changes in value.

 

FINANCIAL ASSETS

Financial assets are recognised initially at fair value, normally being the transaction price. In the case of financial assets not at fair value through profit or loss, directly attributable transaction costs are also included. The subsequent measurement of financial assets depends on their classification. The group derecognises financial assets when the contractual rights to the cash flows expire or the financial asset is transferred to a third party. This includes the de-recognition of receivables for which discounting arrangements are entered into.

 

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP AND PARENT COMPANY ACCOUNTING POLICIES (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

FINANCIAL INSTRUMENTS

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

 

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities.  Financial liabilities are presented as such in the balance sheet.  Finance costs and gains or losses relating to financial liabilities are included in the income statement.  Finance costs are calculated so as to produce a constant rate of charge on the outstanding liability. Where none of the contractual terms of share capital meet the definition of a financial liability then this is classed as an equity instrument.  Dividends and distributions relating to equity instruments are debited direct to equity.

 

Further analysis of the Group's financial instruments, and the relevant exposure to risks and uncertainties, is stated in note 19 and the various classifications of financial assets and liabilities are identified and explained.

 

Trade and other receivables

At the balance sheet date, the Company and its subsidiary evaluate the recoverability of trade receivables and record provisions for doubtful or disputed debts based on experience including comparisons of the relative age of accounts and consideration of history. The actual level of debt collected may differ from the estimated levels of recovery and could impact future operating results positively or negatively.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and other short-term highly liquid investments that have maturities of three months or less from inception, are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

 

Trade and other payables

Trade and other payables are originally recognised at fair value, net of transaction costs. Subsequent measurement is at amortised cost using the effective interest rate method. 

 

Investments in securities

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, with all transaction costs being written off to the income statement as incurred.

 

Investments are classified as available for sale and are measured at subsequent reporting dates at fair value. Gains and losses arising from changes in fair value of available for sale financial assets are included in other comprehensive income for the period.  When the asset is disposed of or deemed to be impaired, the cumulative gain or loss is reclassified from equity reserve to income statement.

 

IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT

At each balance sheet date the Group reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).  Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.   

 

Recoverable amount is the higher of fair value less costs to sell and value in use.  In assessing value in use the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.  An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP AND PARENT COMPANY ACCOUNTING POLICIES (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior periods.

 

 

SEGMENTAL REPORTING

The standard requires financial information to be disclosed in the financial statements in the same format in which it is disclosed to the chief operating decision-maker. The chief decision-maker has been identified as the Board, at which level strategic decisions are made.

 

EQUITY AND RESERVES

Share capital represents the nominal value of shares that have been issued except for the preference shares classified as debt. Deferred shares represent 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. Available for sale reserve includes all gains and losses relating to Available for Sale financial assets. Other reserves relate to movements not classified in any of the reserves detailed above. Revaluation reserve includes all gains and losses relating to Property, Plant and Equipment. All transactions with owners of the parent are recorded separately within equity.

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

		30 Sep		31 Mar
	Note	2020		2019
		£'000		£'000
REVENUE	1	165		1,134
Operating costs	2	(26)		(2,552)
Exceptional items	3	-		(324)
OPERATING PROFIT/(LOSS)	4	139		(1,742)
Finance expense	7	-		(68)
Finance income	7	1		-
Other income		5		-
PROFIT/(LOSS) BEFORE TAXATION		145		(1,810)
Taxation	8	-		79
PROFIT/( LOSS) FOR THE PERIOD FROM CONTINUOUS OPERATIONS		145		(1,731)
PROFIT ON DISPOSAL OF DISCONTINUED OPERATIONS (PAGE 42)	10	5,239		-
TOTAL PROFIT/(LOSS) FOR THE PERIOD		5,384			(1,731)
PROFIT/(LOSS) PER SHARE ON PROFIT/(LOSS) FOR THE PERIOD
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY
BASIC AND DILUTED PROFIT FROM DISCONTINUED OPERATIONS		256.0p		-
BASIC AND DILUTED PROFIT/(LOSS)	9	263.0p		(84.5p)
Profit/(Loss) for the period attributable to:
Owners of the Company		5,384		(1,731)
Non-controlling interests		-		-
		5,384		(1,731)

 

 

 

 

 

 

 

 

 

 

 

The accounting policies on pages 14 to 19 and the notes on pages 25 to 36 form part of these accounts.

 

ASSOCIATED BRITISH ENGINEERING PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

		30 Sep		31 Mar
	Note	2020		2019
		£'000		£'000
Profit/(Loss) for the period		5,384		(1,731)
Other comprehensive income/(loss)
Re-measurement of the net defined benefit liability (*)	17	-		(3,471)
Gain/ (Loss) on available for sale financial asset (**)		327		568
(Deficit)/surplus on revaluation of property		-		(50)
Other comprehensive profit/(loss) for the period		327		(2,953)
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD		5,711		(4,684)
Total comprehensive income/(loss) attributable to:
Owners of the Company		5,711		(4,684)
Non-controlling interests		-		-
		5,711		(4,684)

 

(*)  = Items which will not subsequently be reclassified to the Income Statement.

(**) = Items which may subsequently be reclassified to the Income Statement.

 

 

 

 

 

 

The accounting policies on pages 14 to 19 and the notes on pages 25 to 36 form part of these accounts.

 

ASSOCIATED BRITISH ENGINEERING PLC                                                    Company Number: 00110663

 

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

 

	Note	2020		2019
		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	10	-		-
Available for sale financial assets	14	413		21
		413		21
Current assets
Property, plant and equipment	10	-		534
Available for sale financial assets	14	-		714
Inventories	12	-		165
Trade and other receivables	13	24		125
Cash and cash equivalents		186		389
		210		1,927
Total assets		623		1,948
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 reserves		11		11
Available for Sale reserve		270		805
Revaluation reserve		-		550
Retained earnings		(7,705)		(13,089)
Equity attributable to the Parent Company's Equity shareholders		591		(3,708)
Total equity		591		(3,708)
LIABILITIES
Non-current liabilities
Retirement benefit obligations	17	-		-
Obligation under finance leases	18	-		-
		-		-
Current liabilities
Trade and other payables	18	32		664
Obligations under finance leases	18	-		10
Retirement benefit obligations	17	-		4,982
		32		5,656
Total liabilities		32		5,656
Total equity and liabilities		623		1,948

 

 

The financial statements were approved and authorised for issue by the Board of Directors on 30 March 2021 and were signed below on its behalf by:

 

C Weinberg

Director

The accounting policies on pages 14 to 19 and the notes on pages 25 to 36 form part of these accounts.

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

	Share capital	Share premium	Deferred shares	Other reserve	Available for Sale reserve	Revaluation reserve	Retained earnings	Attributa-ble to owners of the parent	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 April 2018	51	5,370	2,594	11	(64)	600	(7,586)	976	976
Loss for the period	-	-	-	-	-	-	(1,731)	(1,731)	(1,731)
Other comprehensive income
Actuarial loss in defined benefit plan (*)	-	-	-	-	-	-	(3,471)	(3,471)	(3,471)
Unrealised loss on Available for Sale financial assets (**)	-	-	-	-	568	-	-	568	568
Realised gain on Available for Sale Financial assets	-	-	-	-	301	-	(301)	-	-
Revaluation
Surplus on revaluation of freehold property	-	-	-	-	-	(50)	-	(50)	(50)
	--------------	--------------	---------------	--------------	--------------	--------------	---------------	---------------	---------------
Total comprehensive income for the period	-	-	-	-	869	-	(5,503)	(4,684)	(4,684)
	--------------	--------------	--------------	--------------	--------------	--------------	--------------	--------------	--------------
Balance at 1 April 2019	51	5,370	2,594	11	805	550	(13,089)	(3,708)	(3,708)
	--------------	--------------	---------------	--------------	--------------	--------------	---------------	---------------	---------------
Profit for the period	-	-	-	-	-	-	145	145	145
Other comprehensive income
Actuarial loss in defined benefit plan (*)	-	-	-	-	-	-	-	-	-
Disposal of subsidiary	-	-	-	-	(862)	(550)	5,239	3,827	3,827
Unrealised gain on Available for Sale financial assets (**)	-	-	-	-	327	-	-	327	327
Realised gain on
Available for Sale
Financial assets	-	-	-	-	-	-	-	-	-
Revaluation
Surplus on revaluation of freehold property	-	-	-	-	-	-	-	-	-
	--------------	--------------	---------------	--------------	--------------	--------------	---------------	---------------	---------------
Total comprehensive income for the period	-	-	-	-	-	-	-	-	-
	--------------	--------------	---------------	--------------	--------------	--------------	---------------	---------------	---------------
Balance at 30 September 2020	51	5,370	2,594	11	270	-	(7,705)	591	591
	======	======	======	======	======	======	=======	=======	======

 

(*)   = 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 14 to 19 and the notes on pages 25 to 36 form part of these accounts.

 

ASSOCIATED BRITISH ENGINEERING PLC

 

GROUP CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

	2020		2019
	£'000		£'000
Cash flows from operating activities
Cash used in operations	91		(80)
Interest received	-		-
Interest paid	-		(68)
Taxation	-		-
Net cash used in operating activities	91		(148)
Cash flows from investing activities
Proceeds from sale of equipment	-		24
Purchase of equipment	-		(16)
Movements in investments	(65)		-
Sale proceeds from trading investments	-		210
Sale proceeds from subsidiary disposal/loan assignment	100		-
Net cash increase from investing activities	35		218
Cash flows from financing activities
Repayment of finance leases	-		(25)
Net cash used in financing activities	-		(25)
Net increase in cash and cash equivalents	126		45
Cash decrease on disposal of subsidiary	(329)		-
Cash and cash equivalents at beginning of period	389		344
Cash and cash equivalents at end of period	186		389
CASH FLOW FROM OPERATING ACTIVITIES
	2020		2019
	£'000		£'000
Profit/(loss) from continuous operations	145		(1,810)
Adjustments for:
Depreciation	-		91
Finance expense	-		68
Foreign exchange difference	-		(11)
Pension scheme interest expense	-		38
Cash paid in excess of current service cost	-		(204)
Profit on disposal of equipment	-		(6)
Impairment of assets	-		156
Profit on disposal of AFS investments	-		(108)
Changes in working capital:
Decrease/(increase) in inventories	-		872
(Increase)/decrease in trade and other receivables	(20)		393
(Decrease)/increase in payables	(34)		33
	91		(80)
Cash used in operations	91		(80)

 

The accounting policies on pages 14 to 19 and the notes on pages 25 to 36 form part of these accounts.
 

ASSOCIATED BRITISH ENGINEERING PLC

 

NOTES TO THE ACCOUNTS - GROUP

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

1.      SEGMENTAL REPORTING

 

	The following table shows an analysis of the Group's external sales by geographical market:
		30 Sep		31 Mar
		2020		2019
		£'000		£'000
	United Kingdom	165		627
	Europe	-		240
	Far East and Australasia	-		87
	Africa	-		81
	North and South America	-		87
	Middle East	-		12
		165		1,134

 

 

	The following table shows an analysis of the Group's external sales from operations:
		30 Sep		31 Mar
		2020		2019
		£'000		£'000
	Revenue from the sale of goods (Diesel and engineering related services)	-		773
	Revenue from the rendering of services	165		361
		165		1,134

 

 

In the periods ended 30 September 2020 and 31 March 2019, save for dollar bank accounts and overseas debtors, all of the assets held by the Group were located in the United Kingdom and all capital expenditure was incurred within the United Kingdom.

 

Operating segments

The following segment information has been prepared in accordance with IFRS 8, "Operating Segments", which defines requirements for the disclosure of financial information of an entity's operating segments.

 

The Board consider the Group on an individual company basis.  Reports by individual companies are used by the chief decision-maker in the Group.  Significant operating segments are Associated British Engineering Plc and Akoris Trading Limited. As outlined in note 10 on page 42, British Polar Engines Limited, a former subsidiary undertaking, was disposed of during the period.

 

The Group's operations are located in the United Kingdom.  Any transactions between business units are on normal commercial terms and conditions.

 

Akoris Trading Limited is a commodity and natural resource trading, finance and investment company.

 

Associated British Engineering Plc is the Group's holding company.

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

NOTES TO THE ACCOUNTS - GROUP (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

1.    SEGMENTAL REPORTING (continued)

Period to 30 September 2020	Associated British Engineering Plc		British Polar Engines Limited		Akoris Trading Limited		Consolidated
	£'000		£'000		£'000		£'000
External sales	165		Unavailable		-		165
Segment result (PBIT)	146		Unavailable		(1)		145
Net finance expenses							-
Taxation							-
Profit after tax							145
Other information
Capital additions	-		Unavailable		-		-
Balance sheet
Segment assets	591		Unavailable		32		623
Period to 31 March 2019	Associated British Engineering Plc		British Polar Engines Limited		Akoris Trading Limited		Consolidated
	£'000		£'000		£'000		£'000
External sales	-		1,134		-		1,134
Segment result (LBIT)/ PBIT	(49)		(1,687)		(6)		(1,742)
Net finance expenses							(68)
Taxation							79
Loss after tax							(1,731)
Other information
Capital additions	-		16		-		16
Balance sheet
Segment assets	86		1,843		19		1,948

 

Included in the total Group revenue was £Nil (2019: £253,000) of sales which arose from one customer who contributed to 10% or more of the total Group revenue for the period ended 30 September 2020 (2019: two customers). The geographical market from which the revenue from the customers originate is principally the United Kingdom.

 

2.	OPERATING COSTS	30 Sep		31 Mar
		2020		2019
		£'000		£'000
	Raw materials used	-		1,175
	Staff costs (note 5)	65		616
	Depreciation of property plant and equipment	-		91
	Other expenses	(39)		670
		26		2,552

All of the revenue recognised by the Group during the year arose from contracts from customers as defined in IFRS 15.

 

 

ASSOCIATED BRITISH ENGINEERING PLC

 

NOTES TO THE ACCOUNTS - GROUP (continued)

FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

3.	EXCEPTIONAL ITEM	30 Sep		31 Mar
		2020		2019
		£'000		£'000
	Exceptional item	-		(324)

 

Following the directors' decision to prepare previous year's financial statements on a basis other than going concern, impairments arose to bring certain assets to their recoverable amounts and were shown as an exceptional item above. The items which relate to the impairment are tangible fixed assets (£156,000) and trade receivables (£167,944).

	4.		OPERATING PROFIT/(LOSS)		30 Sep				31 Mar
					2020				2019
					£'000				£'000
			Operating profit/(loss) is stated after charging/(crediting)
			Depreciation on owned assets		-				59
			Depreciation on assets held under finance leases		-				32
			Fees payable to the Company's auditor for the audit of the Company's annual accounts:
			PLC audit costs		9				24
			The audit of the Company's subsidiaries pursuant to legislation		1				22
			Operating lease rental on plant and machinery		-				25
			Profit on disposal of property, plant & equipment		-				(6)
	5.		STAFF COSTS AND EMPLOYEES		30 Sep				31 Mar
					2020				2019
					£'000				£'000
			Wages and salaries		62				332
			Social security costs		3				34
			Other pension costs		-				250
					65				616
			The average monthly number of persons employed by the Group during the period was:
					30 Sep	31 Mar
			2020				2019
			Number				Number
			By activity
			Production		-				5
			Administration		3				11
					3				16

  6.       DIRECTORS' REMUNERATION

Directors received emoluments of £78,336 (2019: £57,000).  Further details can be found on page 53.

		30 Sep		31 Mar
	KEY MANAGEMENT COMPENSATION	2020		2019
		£'000		£'000
	Remuneration of Group directors	42		30

          

The Group made no pension contributions in respect of Group directors during the period ended 30 September 2020 or 31 March 2019.