Company Registration No. 02577957 (England and Wales)
PANEL SYSTEMS (HOLDINGS) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
PANEL SYSTEMS (HOLDINGS) LIMITED
COMPANY INFORMATION
Director
Mr C M Ibbotson
Secretary
C Fairburn
Company number
02577957
Registered office
Unit 3-9 Welland Close
Parkwood Industrial Estate
Rutland Road
Sheffield
S3 9QY
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
PANEL SYSTEMS (HOLDINGS) LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 29
PANEL SYSTEMS (HOLDINGS) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -

The director presents the strategic report for the year ended 31 December 2021.

Fair review of the business

The trading year showed a marked improvement over 2020 with most market sectors returning to more normal trading levels by the close of 2021. The early part of the year continued to suffer some reduction in activity due to the pandemic.

 

Looking forward the availability of raw materials and pricing may well impact on performance and operating margins, but the Company will work to minimise these risks through purchasing and managing stock levels.

Principal risks and uncertainties

 

Financial risk management objectives and policies

The company uses financial instruments, other than derivatives, cash, other liquid resources and various items such as trade debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company's operations. The main risks arising from the company’s financial instruments are liquidity risk, foreign currency risk and the general economic climate. The directors review and agree policies for managing each of these risks and monitor on a monthly basis.

 

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. This is supported through an agreed overdraft facility.

 

Currency risk

The company is exposed to transaction and translation foreign exchange risk. In relation to translation risk the volume of foreign purchases is low, and supplies are generally on 30-day terms. Sales and purchases for the Euro area are transacted in Euros.

 

General economic climate

The economic climate has improved significantly since 2020 with the effects of Covid and Brexit much reduced.

 

Key performance indicators

We consider that our key financial performance indicators are those that communicate the financial performance of the company including turnover, operating profit, profit before taxation and the strength of the balance sheet.

On behalf of the board

Mr C M Ibbotson
Director
30 March 2022
PANEL SYSTEMS (HOLDINGS) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
The director presents his report and financial statements for the year ended 31 December 2021. The company is dormant and has not traded during the year.
Principal activities

The company comprises three manufacturing divisions supplying a range of markets including construction, caravans and leisure.

 

The holding company has remained dormant during the year and is likely to remain dormant for the forseeable future.

Results and dividends

The results for the year are set out on page 7.

An interim ordinary dividend was paid amounting to £265,000. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr C M Ibbotson
Auditor

The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of director's responsibilities

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

 

 

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

PANEL SYSTEMS (HOLDINGS) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
On behalf of the board
Mr C M Ibbotson
Director
30 March 2022
PANEL SYSTEMS (HOLDINGS) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PANEL SYSTEMS (HOLDINGS) LIMITED
- 4 -
Opinion

We have audited the financial statements of Panel Systems (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

PANEL SYSTEMS (HOLDINGS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PANEL SYSTEMS (HOLDINGS) LIMITED
- 5 -
Matters on which we are required to report by exception

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, we have not identified material misstatements in the strategic report and the director's report.

 

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

 

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

PANEL SYSTEMS (HOLDINGS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PANEL SYSTEMS (HOLDINGS) LIMITED
- 6 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;

 

 

To address the risks of fraud through management bias and override controls, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director’s and other management and the inspection of regulatory and legal correspondence.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the 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 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 company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

John Warner (Senior Statutory Auditor)
For and on behalf of BHP LLP
31 March 2022
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
PANEL SYSTEMS (HOLDINGS) LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
Notes
£
£
Turnover
3
12,053,225
10,058,169
Cost of sales
(9,837,075)
(8,511,409)
Gross profit
2,216,150
1,546,760
Distribution costs
(444,378)
(396,198)
Administrative expenses
(734,623)
(666,902)
Other operating income
5,590
134,728
Exceptional item
4
-
0
(66,491)
Operating profit
5
1,042,739
551,897
Interest receivable and similar income
9
3,816
6,153
Interest payable and similar expenses
10
-
0
(368)
Profit before taxation
1,046,555
557,682
Tax on profit
11
(197,074)
(111,230)
Profit for the financial year
26
849,481
446,452
Profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

PANEL SYSTEMS (HOLDINGS) LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
£
£
Profit for the year
849,481
446,452
Other comprehensive income
-
-
Total comprehensive income for the year
849,481
446,452
Total comprehensive income for the year is all attributable to the owners of the parent company.
PANEL SYSTEMS (HOLDINGS) LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
14
195,949
361,830
Current assets
Stocks
17
659,929
469,767
Debtors
18
1,654,907
1,507,842
Cash at bank and in hand
3,768,910
3,104,418
6,083,746
5,082,027
Creditors: amounts falling due within one year
19
(1,707,085)
(1,431,468)
Net current assets
4,376,661
3,650,559
Total assets less current liabilities
4,572,610
4,012,389
Creditors: amounts falling due after more than one year
20
-
(3,360)
Provisions for liabilities
21
(600)
(21,500)
Net assets
4,572,010
3,987,529
Capital and reserves
Called up share capital
23
22,950
22,950
Share premium account
24
140,000
140,000
Capital redemption reserve
25
37,051
37,051
Profit and loss reserves
26
4,372,009
3,787,528
Total equity
4,572,010
3,987,529
The financial statements were approved and signed by the director and authorised for issue on 30 March 2022
30 March 2022
Mr C M Ibbotson
Managing Director
PANEL SYSTEMS (HOLDINGS) LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Investments
15
635,173
635,173
Current assets
-
-
Creditors: amounts falling due within one year
19
(397,445)
(397,445)
Net current liabilities
(397,445)
(397,445)
Total assets less current liabilities
237,728
237,728
Capital and reserves
Called up share capital
23
22,950
22,950
Share premium account
24
140,000
140,000
Capital redemption reserve
25
37,051
37,051
Profit and loss reserves
26
37,727
37,727
Total equity
237,728
237,728

For the financial year ended 31 December 2021 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

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.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved and signed by the director and authorised for issue on 30 March 2022
30 March 2022
Mr C M Ibbotson
Managing Director
Company Registration No. 02577957
PANEL SYSTEMS (HOLDINGS) LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2020
22,950
140,000
37,051
3,481,076
3,681,077
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
446,452
446,452
Dividends
12
-
-
-
(140,000)
(140,000)
Balance at 31 December 2020
22,950
140,000
37,051
3,787,528
3,987,529
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
849,481
849,481
Dividends
12
-
-
-
(265,000)
(265,000)
Balance at 31 December 2021
22,950
140,000
37,051
4,372,009
4,572,010
PANEL SYSTEMS (HOLDINGS) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2020
22,950
140,000
37,051
37,727
237,728
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
140,000
140,000
Dividends
12
-
-
-
(140,000)
(140,000)
Balance at 31 December 2020
22,950
140,000
37,051
37,727
237,728
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
265,000
265,000
Dividends
12
-
-
-
(265,000)
(265,000)
Balance at 31 December 2021
22,950
140,000
37,051
37,727
237,728
PANEL SYSTEMS (HOLDINGS) LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
1,036,601
1,458,484
Interest paid
-
0
(368)
Income taxes paid
(89,370)
(286,360)
Net cash inflow from operating activities
947,231
1,171,756
Investing activities
Purchase of tangible fixed assets
(31,555)
(212,677)
Proceeds on disposal of tangible fixed assets
10,000
10,780
Interest received
3,816
6,153
Net cash used in investing activities
(17,739)
(195,744)
Financing activities
Payment of finance leases obligations
-
(37,862)
Dividends paid to equity shareholders
(265,000)
(140,000)
Net cash used in financing activities
(265,000)
(177,862)
Net increase in cash and cash equivalents
664,492
798,150
Cash and cash equivalents at beginning of year
3,104,418
2,306,268
Cash and cash equivalents at end of year
3,768,910
3,104,418
PANEL SYSTEMS (HOLDINGS) LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 14 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Investing activities
Dividends received
265,000
140,000
Net cash generated from investing activities
265,000
140,000
Financing activities
Dividends paid to equity shareholders
(265,000)
(140,000)
Net cash used in financing activities
(265,000)
(140,000)
Net increase in cash and cash equivalents
-
-
Cash and cash equivalents at beginning of year
-
0
-
0
Cash and cash equivalents at end of year
-
0
-
0
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 15 -
1
Accounting policies
Company information

Panel Systems (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 3-9 Welland Close, Parkwood Industrial Estate, Rutland Road, Sheffield, S3 9QY.

 

The group consists of Panel Systems (Holdings) Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Basis of consolidation

The consolidated financial statements incorporate those of Panel Systems (Holdings) Limited and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes. All financial statements are made up to 31 December 2021.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The consolidated financial statements incorporate those of Panel Systems (Holdings) Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 December 2021. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.3
Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. They have considered the ongoing impact of the Covid-19 pandemic and believe with measures already taken and the strong financial position of the company that it will be able to continue trading for at least 12 months from the time of approval of the financial statements.Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.5
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings Leasehold
life of lease (maximum 10 years)
Plant and machinery
3 to 10 years
Motor vehicles
4 to 5 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.8
Fixed asset investments

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets 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).

PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.11
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 18 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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 group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 19 -
1.14
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.18
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provisions

Stocks are stated at the lower of cost and net realisable value. The Director will assess the requirement for any provision for obsolete stock or value deterioration as based on historical transactions, stock utilisation patterns, regular inspection and counting of physical items.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2021
2020
£
£
Turnover analysed by class of business
Panel Components
12,053,225
10,058,169
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
11,933,861
9,930,003
Europe and other
119,364
128,166
12,053,225
10,058,169
2021
2020
£
£
Other significant revenue
Interest income
3,816
6,153
Grants received
5,590
134,728
4
Exceptional item
2021
2020
£
£
Expenditure
Exceptional  expenditure - redundancy
-
66,491
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
5
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Research and development costs
31,784
14,716
Government grants
(5,590)
(134,728)
Depreciation of owned tangible fixed assets
197,436
207,508
Profit on disposal of tangible fixed assets
(10,000)
(10,725)
Operating lease charges
273,272
268,370
6
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
-
-
Audit of the financial statements of the company's subsidiaries
12,850
12,450
7
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Administration
50
54
-
-
8
9
-
-
3
5
-
-
Total
61
68
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
1,776,828
1,702,537
-
0
-
0
Social security costs
158,877
154,926
-
0
-
0
Pension costs
89,520
95,863
-
0
-
0
2,025,225
1,953,326
-
0
-
0
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
8
Director's remuneration
2021
2020
£
£
Remuneration for qualifying services
34,470
29,154
9
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
3,816
6,153

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
3,816
6,153
10
Interest payable and similar expenses
2021
2020
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
-
0
368
11
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
217,974
89,370
Adjustments in respect of prior periods
-
0
5,360
Total current tax
217,974
94,730
Deferred tax
Origination and reversal of timing differences
(20,900)
16,500
Total tax charge
197,074
111,230
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
11
Taxation
(Continued)
- 23 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2021
2020
£
£
Profit before taxation
1,046,555
557,682
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
198,845
105,960
Adjustments in respect of prior years
-
0
5,359
Fixed asset differences
(1,130)
583
Remeasurement of deferred tax for changes in tax rates
404
459
Deferred tax not recognised
(1,054)
(1,131)
Expenses not dedictible for tax purposes
9
-
Taxation charge
197,074
111,230
12
Dividends
2021
2020
Recognised as distributions to equity holders:
£
£
Interim paid
265,000
140,000
13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2021 and 31 December 2021
92,346
Amortisation and impairment
At 1 January 2021 and 31 December 2021
92,346
Carrying amount
At 31 December 2021
-
0
At 31 December 2020
-
0
The company had no intangible fixed assets at 31 December 2021 or 31 December 2020.
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
14
Tangible fixed assets
Group
Land and buildings Leasehold
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2021
73,741
1,919,726
393,659
2,387,126
Additions
-
0
30,889
666
31,555
Disposals
-
0
-
0
(61,323)
(61,323)
At 31 December 2021
73,741
1,950,615
333,002
2,357,358
Depreciation and impairment
At 1 January 2021
73,741
1,653,645
297,910
2,025,296
Depreciation charged in the year
-
0
140,509
56,927
197,436
Eliminated in respect of disposals
-
0
-
0
(61,323)
(61,323)
At 31 December 2021
73,741
1,794,154
293,514
2,161,409
Carrying amount
At 31 December 2021
-
0
156,461
39,488
195,949
At 31 December 2020
-
0
266,081
95,749
361,830
The company had no tangible fixed assets at 31 December 2021 or 31 December 2020.
15
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
635,173
635,173
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2021 and 31 December 2021
635,173
Carrying amount
At 31 December 2021
635,173
At 31 December 2020
635,173
16
Subsidiaries

Details of the company's subsidiaries at 31 December 2021 are as follows:

PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
16
Subsidiaries
(Continued)
- 25 -
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Panel Systems Limited
UK
Manufacture of panel components
Ordinary
100.00
17
Stocks
Group
Company
2021
2020
2021
2020
£
£
£
£
Raw materials and consumables
659,929
459,878
-
0
-
0
Work in progress
-
9,889
-
-
659,929
469,767
-
0
-
0
18
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,496,297
1,377,728
-
0
-
0
Prepayments and accrued income
158,610
130,114
-
0
-
0
1,654,907
1,507,842
-
-
19
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
£
£
£
£
Trade creditors
1,099,574
906,095
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
397,445
397,445
Corporation tax payable
217,974
89,370
-
0
-
0
Other taxation and social security
308,057
326,652
-
-
Other creditors
20,286
20,208
-
0
-
0
Accruals and deferred income
61,194
89,143
-
0
-
0
1,707,085
1,431,468
397,445
397,445
20
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
£
£
£
£
Government grants
-
0
3,360
-
0
-
0
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
21
Deferred taxation

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2021
2020
2021
2020
Group
£
£
£
£
ACAs
600
35,000
-
-
Tax losses
-
-
-
13,500
600
35,000
-
13,500
The company has no deferred tax assets or liabilities.
Group
Company
2021
2021
Movements in the year:
£
£
Liability at 1 January 2021
21,500
-
Credit to profit or loss
(40,300)
-
Asset at 31 December 2021
(18,800)
-

The deferred tax liability relates to accelerated capital allowances that are expected to mature within the same period.

22
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit and loss in respect of defined contribution schemes
89,520
95,863

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

23
Share capital
Group and company
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 10p each
229,500
229,500
22,950
22,950
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 27 -
24
Share premium account
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning and end of the year
140,000
140,000
140,000
140,000
25
Capital redemption reserve
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning and end of the year
37,051
37,051
37,051
37,051
26
Profit and loss reserves
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning of the year
3,787,528
3,481,076
37,727
37,727
Profit for the year
849,481
446,452
265,000
140,000
Dividends
(265,000)
(140,000)
(265,000)
(140,000)
At the end of the year
4,372,009
3,787,528
37,727
37,727
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 28 -
27
Operating lease commitments
Lessee

 

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2021
2020
2021
2020
£
£
£
£
Within one year
243,500
223,700
-
-
Between two and five years
703,446
746,904
-
-
In over five years
78,600
196,875
-
-
1,025,546
1,167,479
-
-

 

28
Cash generated from group operations
2021
2020
£
£
Profit for the year after tax
849,481
446,452
Adjustments for:
Taxation charged
197,074
111,230
Finance costs
-
0
368
Investment income
(3,816)
(6,153)
Gain on disposal of tangible fixed assets
(10,000)
(10,725)
Depreciation and impairment of tangible fixed assets
197,436
207,508
Movements in working capital:
(Increase)/decrease in stocks
(190,162)
97,499
(Increase)/decrease in debtors
(147,065)
909,921
Increase/(decrease) in creditors
147,013
(296,267)
Decrease in deferred income
(3,360)
(1,349)
Cash generated from operations
1,036,601
1,458,484
PANEL SYSTEMS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 29 -
29
Cash absorbed by operations - company
2021
2020
£
£
Profit for the year after tax
265,000
140,000
Adjustments for:
Investment income
(265,000)
(140,000)
Cash absorbed by operations
-
-
30
Analysis of changes in net funds - group
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
3,104,418
664,492
3,768,910
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