Sauter Automation Limited - Period Ending 2020-12-31
Sauter Automation Limited - Period Ending 2020-12-31
Registration number:
Sauter Automation Limited
for the Year Ended 31 December 2020
Sauter Automation Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Income Statement |
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Consolidated Statement of Comprehensive Income |
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Consolidated Statement of Financial Position |
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Statement of Financial Position |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Sauter Automation Limited
Company Information
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Directors |
M J Clinch W Karlen A T McKenzie C Reid |
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Company secretary |
A T McKenzie |
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Registered office |
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Auditors |
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Sauter Automation Limited
Strategic Report for the Year Ended 31 December 2020
The directors present their strategic report for the year ended 31 December 2020.
Principal activity
The principal activity of the group is marketing, design, manufacture, installation and maintenance of advanced building environmental management products and solutions.
Fair review of the business
The group proved reassuringly resilient in the face of the unexpected challenges brought by COVID 19. The construction industry responded quickly to the new requirement for COVID secure working environments. This meant that most of our active sites for installation of new systems closed only briefly and were then able to progress with minor disruption. We have however seen numerous delays to placement of new orders as investors and developers wait to see the medium-term implications on demand for commercial space. This led to a reduction in new system revenue in the year. The outlook remains positive. We are now seeing clients progressing tenders and confidence that demand in London for residential space remains strong and demand for new commercial space will return in the near future.
Despite the slowdown in tender progress, we have invested time throughout 2020 in developing new relationships with major developers and infrastructure providers which we are optimistic will bear fruit as activity levels pick up.
The service and maintenance side of the business delivered a robust performance, partly due to our longstanding contracts with the NHS. We have been able to assist the NHS with numerous upgrade projects as well as support for the set up of Nightingale hospitals.
Over the course of the year, we have fully transitioned all our new installs to the next generation Sauter Modulo 6. This delivers to our clients a market leading combination of performance, security, integration, connectivity and user friendliness.
Coinciding with this transition, we have signed agreements with a select number of solution partners in the second half of 2020. These solution partners are now able to install and maintain the latest generation Sauter systems. The market buzz that this has created has allowed us to ensure we only work with partners that meet our quality standards in line with our brand values. These partners expand our geographic coverage throughout the UK and give our customers additional options in terms of maintenance of Sauter systems.
On the facilities management side of the business, lower occupancy levels resulted in lower client demand for reactive maintenance and discretionary upgrade spend. However, the underlying maintenance business continued of grow. We have had a very strong start to the projects business in 2021 and expect to see a rebound as the UK comes out of lock down.
Brexit has continued to throw up challenges, particularly in relation to the paperwork required for the ongoing importation of our product from mainland Europe. We are making good progress working through these issues at the time of writing. We are optimistic that now a deal has been agreed, the reduction in uncertainty will have a positive impact on the UK construction market.
We use a number of metrics to measure the performance of the business. These key performance indicators (KPIs) measure past performance but also provide information and context to anticipate future events, allowing us to act early and manage the business effectively.
The group's key financial and other performance indicators during the year were as follows:
Sauter Automation Limited
Strategic Report for the Year Ended 31 December 2020 (continued)
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Unit |
2020 |
2019 |
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Revenue |
£m |
17.0 |
19.2 |
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EBIT (excluding Sauter licence fees) |
£m |
1.2 |
1.3 |
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Work in hand |
£m |
8.0 |
8.8 |
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Cash position |
£m |
2.4 |
2.2 |
Sauter Automation (SAL) is the UK subsidiary of FR Sauter AG. SAL has an excellent reputation for delivering high quality HVAC control products and solutions. Whilst operating autonomously as an independent company, with full in-house resources, SAL has the added advantage of support from a major manufacturer. Our customers benefit from the Sauter Group strategy of designing, developing and producing energy efficient control solutions, thereby creating sustainable environments.
Principal risks and uncertainties
Market risk:
The principle risk the company continues to face is the extent of property development and construction within both the private and public sectors. Volatility in the construction market presents a significant challenge in that the company needs to ensure it is in a position to retain skilled staff and subcontractors during slower periods. COVID 19 led to a slowdown in 2020 however it is now possible that there will be a rapid rebound in 2021 which in the past has led to skilled labour shortages.
Our service and maintenance business and facilities management business are well insulated from the impact of volatility in the construction market.
Financial risk:
Financial risk is managed through internal controls. We make use of credit checks to monitor our exposure to bad debt risk. All company funds are held by Barclays. The group also holds funds with Bank of Scotland. Financial performance is reported internally on a monthly basis and measured against budget and prior year performance. Forecasts are updated as appropriate.
Foreign exchange risk:
The company imports a significant amount of equipment from Switzerland and the EU. Currency hedging is managed by our ultimate parent company.
Liquidity risk:
Cash is monitored on a daily basis. The business is managed conservatively with significant headroom above our minimum working capital requirements maintained. The group has no external debt.
Approved by the
.........................................
Company secretary and director
Sauter Automation Limited
Directors' Report for the Year Ended 31 December 2020
The directors present their report and the for the year ended 31 December 2020.
Directors of the group
The directors who held office during the year were as follows:
Dividends
The directors do not recommend the payment of a dividend for the year ended 31 December 2020.
Financial instruments
Price risk, credit risk, liquidity risk and cash flow risk
The group does not use any financial instruments to hedge its risks associated with price, credit, liquidity or cash flow. The group reviews its exposure to foreign exchange risk on an ongoing basis.
Research and development
The group did not undertake research and development activities during the year (2018: Nil).
Disclosure of information in the strategic report
The group in accordance with section 414C (11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 has set out in the group's strategic report information required by schedule 7 of the
Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
.........................................
Company secretary and director
Sauter Automation Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have 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 directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Sauter Automation Limited
Independent Auditor's Report to the Members of Sauter Automation Limited
Opinion
We have audited the financial statements of Sauter Automation Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2020, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and 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 United Kingdom Accounting Standards, including Financial Reporting Standard 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:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2020 and of the group's profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 group 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 company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
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 this other information, we are required to report that fact.
Sauter Automation Limited
Independent Auditor's Report to the Members of Sauter Automation Limited (continued)
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 Directors' 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:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors’ remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 the 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 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Sauter Automation Limited
Independent Auditor's Report to the Members of Sauter Automation Limited (continued)
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud, we have obtained an understanding of the nature of the industry, the control environment and the legal and regulatory frameworks that the Group operates in.
We determined that the most significant applicable legal and regulatory frameworks are those directly relevant to the reporting framework and preparation of the financial statements (FRS 102, Companies Act 2006 and UK tax legislation). We considered the extent to which non-compliance might have a material effect on the financial statements.
We determined the principal risks which could lead to material misstatement of the financial statements to be related to posting inappropriate journal entries and management bias in accounting estimates. We identified the most significant risks in respect of accounting estimates to be the determination of level of accrued contract revenue at the end of the reporting period, the assumptions used in assessing impairment of goodwill and investments, and the actuarial assumptions used in determining the defined benefit pension liability.
Audit procedures performed by the engagement team included:
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Identifying those members of the group who have the primary responsibility for ensuring compliance with laws and regulations; |
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Enquiries with management, to understand managements’ approach to ensuring compliance with laws and regulations, and to obtain knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements; |
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Evaluating managements’ incentives and opportunities for manipulation of the financial statements (including management override of controls); |
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Testing journal entries and performing analytical procedures to identify any unusual transactions, or those outside the normal course of business, which may indicate risks of material misstatement due to fraud; |
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Testing of balances and transactions that are subject to estimation uncertainty by review of evidence supporting the assumptions and judgements used, and determining whether those judgements used indicate potential bias; |
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Reading minutes of meetings of those charged with governance; |
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Review of legal expense accounts to identify spend which may be indicative of breaches of laws and regulations; |
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Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with the provisions of laws and regulations described above. |
The engagement team also remained aware of the need for professional scepticism to identify any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Sauter Automation Limited
Independent Auditor's Report to the Members of Sauter Automation Limited (continued)
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.
......................................
For and on behalf of
Knoll House
Knoll Road
Surrey
GU15 3SY
Sauter Automation Limited
Consolidated Income Statement for the Year Ended 31 December 2020
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Note |
2020 |
2019 |
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Turnover |
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|
|
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Cost of sales |
( |
( |
|
|
Gross profit |
|
|
|
|
Distribution costs |
( |
( |
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|
Administrative expenses |
( |
( |
|
|
Other operating income |
|
- |
|
|
Operating profit |
|
|
|
|
Other interest receivable and similar income |
|
|
|
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Interest payable and similar expenses |
( |
( |
|
|
(42) |
(63) |
||
|
Profit before tax |
|
|
|
|
Taxation |
( |
( |
|
|
Profit for the financial year |
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|
|
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Profit/(loss) attributable to: |
|||
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Owners of the company |
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|
|
|
Non Controlling Interests |
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Sauter Automation Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2020
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2020 |
2019 |
|
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Profit for the year |
|
|
|
Remeasurement gain/loss on defined benefit pension schemes |
( |
- |
|
Total comprehensive income for the year |
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Total comprehensive income attributable to: |
||
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Owners of the company |
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|
|
Non Controlling Interests |
|
|
|
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Sauter Automation Limited
(Registration number: 01292827)
Consolidated Statement of Financial Position as at 31 December 2020
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Note |
2020 |
2019 |
|
|
Fixed assets |
|||
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Intangible assets |
|
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|
Tangible assets |
|
|
|
|
|
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||
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Current assets |
|||
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Stocks |
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Debtors |
|
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Cash at bank and in hand |
|
|
|
|
|
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||
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
- |
( |
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Provisions for liabilities |
( |
( |
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|
Net assets |
|
|
|
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Capital and reserves |
|||
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Called up share capital |
250 |
250 |
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Profit and loss account |
3,897 |
3,382 |
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Equity attributable to owners of the company |
4,147 |
3,632 |
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Non Controlling Interests |
291 |
375 |
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Total equity |
4,438 |
4,007 |
Approved and authorised by the
.........................................
Company secretary and director
Sauter Automation Limited
(Registration number: 01292827)
Statement of Financial Position as at 31 December 2020
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Note |
2020 |
2019 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Investments |
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||
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Current assets |
|||
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Stocks |
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Debtors |
|
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Cash at bank and in hand |
|
|
|
|
|
|
||
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Creditors: Amounts falling due within one year |
( |
( |
|
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Net current assets |
|
|
|
|
Total assets less current liabilities |
|
|
|
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Creditors: Amounts falling due after more than one year |
- |
( |
|
|
Provisions for liabilities |
( |
( |
|
|
Net assets |
|
|
|
|
Capital and reserves |
|||
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Called up share capital |
250 |
250 |
|
|
Profit and loss account |
4,349 |
3,528 |
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Shareholders' funds |
4,599 |
3,778 |
The company made a profit after tax for the financial year of £896,000 (2019 - profit of £679,000).
Approved and authorised by the
.........................................
Company secretary and director
Sauter Automation Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2020
Equity attributable to the parent company
|
Share capital |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
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At 1 January 2020 |
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|
|
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Profit for the year |
- |
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|
|
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Other comprehensive income |
- |
( |
( |
- |
( |
|
Total comprehensive income |
- |
|
|
|
|
|
Dividends |
- |
- |
- |
( |
( |
|
At 31 December 2020 |
|
|
|
|
|
|
Share capital |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
|
At 1 January 2019 |
|
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|
|
|
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Profit for the year |
- |
|
|
|
|
|
Total comprehensive income |
- |
|
|
|
|
|
Dividends |
- |
- |
- |
( |
( |
|
At 31 December 2019 |
|
|
|
|
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Sauter Automation Limited
Statement of Changes in Equity for the Year Ended 31 December 2020
|
Share capital |
Profit and loss account |
Total |
|
|
At 1 January 2020 |
|
|
|
|
Profit for the year |
- |
|
|
|
Other comprehensive income |
- |
( |
( |
|
Total comprehensive income |
- |
|
|
|
At 31 December 2020 |
|
|
|
|
Share capital |
Profit and loss account |
Total |
|
|
At 1 January 2019 |
|
|
|
|
Profit for the year |
- |
|
|
|
Total comprehensive income |
- |
|
|
|
At 31 December 2019 |
|
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Sauter Automation Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2020
|
Note |
2020 |
2019 |
|
|
Cash flows from operating activities |
|||
|
Profit for the year |
|
|
|
|
Adjustments to cash flows from non-cash items |
|||
|
Depreciation and amortisation |
|
|
|
|
Finance income |
( |
( |
|
|
Finance costs |
|
|
|
|
Income tax expense |
|
|
|
|
Foreign exchange (gains) / losses |
|
( |
|
|
Defined benefit pension plan deficit funding contribution |
(75) |
- |
|
|
|
|
||
|
Working capital adjustments |
|||
|
Decrease/(increase) in stocks |
|
( |
|
|
Decrease in trade debtors |
|
|
|
|
(Decrease)/increase in trade creditors |
( |
|
|
|
Increase in provisions |
|
|
|
|
Cash generated from operations |
|
|
|
|
Income taxes paid |
( |
( |
|
|
Net cash flow from operating activities |
|
|
|
|
Cash flows from investing activities |
|||
|
Interest received |
|
|
|
|
Acquisitions of tangible assets |
( |
( |
|
|
Acquisition of intangible assets |
( |
- |
|
|
Net cash flows from investing activities |
( |
( |
|
|
Cash flows from financing activities |
|||
|
Interest paid |
( |
( |
|
|
Dividends paid |
( |
( |
|
|
Repayment of parent company loan |
(588) |
(588) |
|
|
Net cash flows from financing activities |
( |
( |
|
|
Net increase in cash and cash equivalents |
|
|
|
|
Cash and cash equivalents at 1 January |
|
1,984 |
|
|
Cash and cash equivalents at 31 December |
2,380 |
2,209 |
|
The company is a qualifying entity for the purposes of FRS 102 and has elected to take the exemption under FRS 102, para 1.12 (b) not to present the company statement of cash flows.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The registered number of the company is 01292827.
The address of its registered office is:
These financial statements were authorised for issue by the
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit and loss account.
The financial statements are prepared in sterling, which is the functional currency of the entity, and are rounded to the nearest £'000.
Going concern
The directors have performed an assessment of the ability of the group to continue trading as a going concern, and have prepared cash flow forecasts which demonstrate that the group can continue in operation for at least 12 months from the date of signing these accounts, The directors therefore determine the going concern basis of preparation continues to be appropriate.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Summary of disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102 in its individual financial statements:
(a) No cash flow statement has been presented for the company, on the basis that it is a qualifying entity and the consolidated statement of cash flows, included in these financial statements, includes the Company's cash flows;
(b) Disclosures in respect of financial instruments have not been presented as the information is provided in the consolidated financial statement disclosures;
(c) No disclosure has been given for the aggregate remuneration of the Company key management personnel.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2020.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions which affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. |
Key sources of estimation uncertainty
Pension benefits: The cost of defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates and retail price inflation. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty. Further details are given in note 19.
Stock provisioning: Management must make estimates as to the recoverability of the cost of inventory and the associated provisions required. When calculating the provision, management considers the nature and condition of the inventory, as well as applying assumptions around potential future usage of inventory based on turnover of the individual inventory lines in the year along with recent purchases made.
Amounts recoverable on contracts: The Group establishes a reliable estimate of the value of amounts recoverable on longer term contracts. The estimates are based on the percentage of completion of the individual projects applied to the total contract value. Any uncertified amounts are reviewed for inclusion within the variations or contract debt provision.
Useful economic lives of tangible assets: The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. These are amended when necessary to reflect current estimates, based on economic utilisation and physical condition of the assets.
Impairment of subsidiary investment/goodwill: The Group considers whether goodwill is impaired. The company considers whether the investment in the subsidiary is impaired. Where an indication of impairment is identified the estimation of recoverable value is calculated. This requires estimation of future cash flows and selection of appropriate discount rates in order to calculate the net present value of those cash flows.
Other provisions: In addition to stock and retirement obligations, provision is made for dilapidations, bad debt and contingencies. These provisions require management's best estimate of the costs that will be incurred based on legislative and contractual requirements, historical experience and trends.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services and progress claims in the ordinary course of the group’s activities. Contract invoices and progress claims are raised periodically to match the level of work completed.
Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the company.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Government grants
Grants are accounted for under the accruals model as permitted by FRS 102. Grants of a revenue nature are recognised in “other income” within profit or loss in the same period as the related expenditure. This includes the Government Coronavirus Job Retention Scheme. The Company has not directly benefited from any other forms of government assistance.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
|
Asset class |
Depreciation method and rate |
|
Freehold buildings |
150 years and 30 years straight line |
|
Additions to buildings |
25 years straight line |
|
Plant and machinery |
10 years straight line |
|
Fixtures and fittings |
8 years straight line |
|
Computer and word processing equipment |
4 years straight line |
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably. On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Goodwill on business combination |
15 years straight line |
|
Software |
4 years straight line |
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss.
Investments in equity shares and in subsidiary companies which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Cash and cash equivalents
Cash is represented by cash in hand and bank deposits.
Debtors
Short term debtors are measured at transaction price, less any impairment.
Inventories
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
Creditors
Short term creditors are measured at the transaction price.
Long-term contracts
Work in progress on incomplete long term contracts is valued at direct cost. All contracts are invoiced periodically and profit is recognised after due consideration of all foreseeable costs. Reserves are created to accrue for further anticipated expenses on incomplete contracts. These reserves are included under accruals in the statement of financial position. Overheads have not been included but the net effect of including overheads in the valuation of of long term contracts and adjusting work in in progress to take account of net realisable value would not be material to these accounts. Provision is made for the estimated cost of warranty when a contract is completed.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Provisions
Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
The pension arrangements operated by the Company provide benefits on a defined contribution basis. Contributions paid in accordance with the rules of the schemes are charged to the profit and loss account in the period to which they relate.
Net interest is recognised in profit or loss as other finance revenue or cost. Re-measurements, comprising actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability (excluding amounts included in net interest) are recognised immediately in other comprehensive income in the period in which they occur. Re-measurements are not reclassified to profit and loss in subsequent periods. The recognition of the re-measurements is capped so as not to recognise a defined benefit asset.
For a number of longstanding employees the Company has taken on certain guarantees regarding the ultimate level of benefits which will emerge in respect of past service. These benefit guarantees are met by an unfunded commitment from the Company. Any shortfall between the emerging defined contribution benefits and the benefit guarantees is provided for over the estimated remaining service lives of the employees, in accordance with advice from an independent actuary.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
2 |
Accounting policies (continued) |
Financial instruments
Recognition and measurement
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Debt instruments are subsequently measured at amortised cost.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.
|
Revenue |
Turnover arose in the year from the supply, design, installation and maintenance of HVAC control systems and building energy management systems and facilities management, which the directors regard as comprising one class of business across the Group. In the year £432,000 (2019: £230,000) of income also relates to recharges to the parent company and car park rental income.
The whole of the turnover is derived from the United Kingdom.
The analysis of the group's turnover for the year by market is as follows:
|
2020 |
2019 |
|
|
UK |
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
|
2020 |
2019 |
|
|
Government grants |
|
- |
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Operating profit |
Arrived at after charging/(crediting)
|
2020 |
2019 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
|
|
Foreign exchange losses/(gains) |
|
( |
|
Operating lease expense - property |
|
|
|
Operating lease expense - plant and machinery |
|
|
|
Impairment of trade debtors |
(7) |
485 |
|
Other interest receivable and similar income |
|
2020 |
2019 |
|
|
Interest income on bank deposits |
|
|
|
Interest payable and similar expenses |
|
2020 |
2019 |
|
|
Interest expense on other finance liabilities |
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2020 |
2019 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
8 |
Staff costs (continued) |
|
2020 |
2019 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
Distribution |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2020 |
2019 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
619 |
454 |
During the year the number of directors who were receiving benefits under company pension schemes was as follows:
|
2020 |
2019 |
|
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
|
2020 |
2019 |
|
|
Remuneration |
|
|
|
Company contributions to money purchase pension schemes |
- |
|
|
Auditors' remuneration |
|
2020 |
2019 |
|
|
Audit of these financial statements |
21 |
20 |
|
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
7 |
7 |
|
|
|
|
|
Other fees to auditors |
||
|
All other non-audit services |
|
|
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Taxation |
Tax charged/(credited) in the income statement
|
2020 |
2019 |
|
|
Current taxation |
||
|
UK corporation tax |
|
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
|
|
|
Tax expense in the income statement |
|
|
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2019 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2020 |
2019 |
|
|
Profit before tax |
|
|
|
Corporation tax at standard rate |
|
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Tax decrease from effect of capital allowances and depreciation |
- |
( |
|
Tax increase from other short-term timing differences |
- |
|
|
Other tax effects for reconciliation between accounting profit and tax expense (income) |
|
|
|
Total tax charge |
|
|
The UK corporation tax rate remained at 19% for the year, and this was substantively enacted as part of Finance Bill 2020 (on 17 March 2020). Deferred taxes at the statement of financial position date have been measured using these enacted tax rates and reflected in these financial statements.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
11 |
Taxation (continued) |
Deferred tax
Group
Deferred tax assets and liabilities
|
2020 |
Asset |
Liability |
|
Capital allowances and depreciation |
|
|
|
2019 |
Asset |
Liability |
|
Capital allowances and depreciation |
|
|
Company
Deferred tax assets and liabilities
|
2020 |
Liability |
|
Capital allowances and depreciation |
|
|
2019 |
Liability |
|
Capital allowances and depreciation |
|
There are no unused tax losses or unused tax credits at a group or company level.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Intangible assets |
Group
|
Goodwill |
Software |
Total |
|
|
Cost or valuation |
|||
|
At 1 January 2020 |
|
|
|
|
Additions acquired separately |
- |
|
|
|
At 31 December 2020 |
|
|
|
|
Amortisation |
|||
|
At 1 January 2020 |
|
|
|
|
Amortisation charge |
|
|
|
|
At 31 December 2020 |
|
|
|
|
Carrying amount |
|||
|
At 31 December 2020 |
|
|
|
|
At 31 December 2019 |
|
|
|
The above goodwill is being amortised over a useful life of 15 years. The useful life of the goodwill is linked to the continued involvement of management based on the purchase agreement and the associated established customer relationships and contacts. The useful life of the software is based on its expected utilisation by the group.
Company
|
Software |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2020 |
|
|
|
Additions acquired separately |
|
|
|
At 31 December 2020 |
|
|
|
Amortisation |
||
|
At 1 January 2020 |
|
|
|
Amortisation charge |
|
|
|
At 31 December 2020 |
|
|
|
Carrying amount |
||
|
At 31 December 2020 |
|
|
|
At 31 December 2019 |
|
|
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Tangible assets |
Group
|
Freehold land and buildings, and additions to buildings |
Leasehold improvements |
Fixtures and fittings |
Plant and machinery and other equipment |
Office equipment |
Total |
|
|
Cost or valuation |
||||||
|
At 1 January 2020 |
|
|
|
|
|
|
|
Additions |
|
|
- |
|
|
|
|
Disposals |
- |
- |
- |
( |
( |
( |
|
Transfers |
( |
- |
- |
|
- |
- |
|
At 31 December 2020 |
|
|
|
|
|
|
|
Depreciation |
||||||
|
At 1 January 2020 |
|
|
|
|
|
|
|
Charge for the year |
|
- |
|
|
|
|
|
Eliminated on disposal |
- |
- |
- |
( |
( |
( |
|
Transfers |
|
- |
- |
( |
- |
- |
|
At 31 December 2020 |
|
|
|
|
|
|
|
Carrying amount |
||||||
|
At 31 December 2020 |
|
|
|
|
|
|
|
At 31 December 2019 |
|
- |
|
|
|
|
Included within the net book value of land and buildings above is £1,172,000 (2019 - £975,000) in respect of freehold land and buildings and associated improvements.
The net book value of freehold land, included in freehold property above, is £300,000 (2019: £300,000).
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
13 |
Tangible assets (continued) |
Company
|
Freehold land and buildings, and additions to buildings |
Plant and machinery and other equipment |
Total |
|
|
Cost or valuation |
|||
|
At 1 January 2020 |
|
|
|
|
Additions |
|
|
|
|
Disposals |
- |
( |
( |
|
Transfers |
( |
|
- |
|
At 31 December 2020 |
|
|
|
|
Depreciation |
|||
|
At 1 January 2020 |
|
|
|
|
Charge for the year |
|
|
|
|
Eliminated on disposal |
- |
( |
( |
|
Transfers |
|
( |
- |
|
At 31 December 2020 |
|
|
|
|
Carrying amount |
|||
|
At 31 December 2020 |
|
|
|
|
At 31 December 2019 |
|
|
|
Included within the net book value of land and buildings above is £1,172,000 (2019 - £975,000) in respect of freehold land and buildings, and associated improvements.
The net book value of freehold land, included in freehold property above, is £300,000 (2019: £300,000).
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Investments |
Company
|
2020 |
2019 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ 000 |
|
Cost or valuation |
|
|
At 1 January 2020 |
|
|
Carrying amount |
|
|
At 31 December 2020 |
|
|
At 31 December 2019 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
||||
|
2020 |
2019 |
||||||
|
Subsidiary undertakings |
|||||||
|
|
Inova House, Lime Tree Way,
England & Wales |
|
|
|
|||
The above subsidiary is included in the consolidation. The company's investment in Wren Environmental Limited is direct ownership.
|
Subsidiary undertakings |
|
Wren Environmental Limited The principal activity of Wren Environmental Limited is |
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Stocks |
|
Group |
Company |
|||
|
2020 |
2019 |
2020 |
2019 |
|
|
Finished goods and goods for resale |
|
|
|
|
Group
Inventories are stated after provisions for impairment of £261,000 (2019: £208,000). There is no significant difference between the replacement cost of the inventory and its carrying amount.
Company
Inventories are stated after provisions for impairment of £261,000 (2019: £208,000). There is no significant difference between the replacement cost of the inventory and its carrying amount.
|
Debtors |
|
Group |
Company |
||||
|
Note |
2020 |
2019 |
2020 |
2019 |
|
|
Trade debtors |
|
|
|
|
|
|
Amounts owed by related parties |
|
|
|
|
|
|
Other debtors |
|
|
|
|
|
|
Prepayments |
|
|
|
|
|
|
Accrued income |
|
|
- |
- |
|
|
Gross amount due from customers for contract work |
|
|
|
|
|
|
Deferred tax assets |
|
|
- |
- |
|
|
|
|
|
|
||
|
Less non-current portion |
( |
( |
( |
( |
|
|
|
|
|
|
||
Trade debtors are stated after provisions for doubtful debts of £84,000 (2019: £65,000).
Details of non-current trade and other debtors
Group
£270,000 (2019 - £223,000) of other debtors is classified as non current, and is classified as amounts recoverable on contracts.
Company
£270,000 (2019 - £223,000) of other debtors is classified as non current. and is classified as amounts recoverable on contracts.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2020 |
2019 |
2020 |
2019 |
|
|
Cash on hand |
|
|
|
|
|
Cash at bank |
|
|
|
|
|
|
|
|
|
|
|
Creditors |
|
Group |
Company |
||||
|
Note |
2020 |
2019 |
2020 |
2019 |
|
|
Due within one year |
|||||
|
Trade creditors |
|
|
|
|
|
|
Amounts due to related parties |
|
|
|
|
|
|
Social security and other taxes |
|
|
|
|
|
|
Other payables |
|
|
|
|
|
|
Accruals |
|
|
|
|
|
|
Income tax liability |
68 |
80 |
31 |
49 |
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Amounts due to related parties |
- |
|
- |
|
|
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Deferred tax and other provisions |
Group
|
Warranties |
Deferred tax |
Dilapidations provision |
Total |
|
|
At 1 January 2020 |
|
|
|
|
|
Increase (decrease) in existing provisions |
- |
|
|
|
|
At 31 December 2020 |
|
|
|
|
The Group has an obligation within its property leasing arrangements at a subsidiary level to repair damages incurred to the property during the life of the lease, such as wear and tear, and to remove any alterations upon notice by the owner. The cost is charged to profit and loss as the obligation arises, and the unwinding of the discount is recognised as a finance cost. The provision is currently expected to be utilised in 2030. The deferred tax liability relates to the reversal of timing differences on acquired tangible and intangible assets and capital allowances through depreciation and amortisation.
Company
|
Warranties |
Deferred tax |
Total |
|
|
At 1 January 2020 |
|
|
|
|
Increase (decrease) in existing provisions |
- |
|
|
|
At 31 December 2020 |
|
|
|
The provision is for potential warranty liabilities which are expected to be utilised within 12 months of the reporting date. The deferred tax liability relates to the reversal of timing differences on acquired tangible and intangible assets and capital allowances through depreciation and amortisation.
|
Pension and other schemes |
Defined contribution pension scheme
The group operates two defined contribution pension schemes, one for the parent company and one for the subsidiary. The pension cost charge for the year represents contributions payable by the group to the schemes and amounted to £
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
20 |
Pension and other schemes (continued) |
Defined benefit pension schemes
The pension arrangements operated by the Company provide benefits on a defined contribution basis. Contributions paid in accordance with the rules of the scheme are charged to the statement of comprehensive income in the period to which they relate. For a number of employees, the employer has undertaken to provide certain guarantees regarding the ultimate level of benefits which will emerge in respect of past service.
In accordance with FRS 102, any deficit on the defined benefit scheme as reported by an independent firm of actuaries is provided for under "Provisions" on the statement of financial position, with relevant movements in the provision being set against reserves.
The date of the most recent comprehensive actuarial valuation was
At the date of the last full valuation by Hymans Robertson LLP in 2019, the actuarial valuation of the assets was £866,000 and of the liabilities £800,000, resulting in an irrecoverable surplus.
The total cost relating to defined benefit schemes for the year recognised in profit or loss as an expense was £Nil (2019 - £Nil). The total cost relating to defined benefit schemes for the year included in the cost of an asset was £Nil (2019 - £Nil).
Reconciliation of scheme assets and liabilities to assets and liabilities recognised
The amounts recognised in the statement of financial position are as follows:
|
2020 |
2019 |
|
|
Fair value of scheme assets |
|
|
|
Present value of defined benefit obligation |
( |
( |
|
46 |
66 |
|
|
Irrecoverable surplus |
(46) |
(66) |
|
Defined benefit pension scheme surplus/(deficit) |
- |
- |
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
20 |
Pension and other schemes (continued) |
Defined benefit obligation
Changes in the defined benefit obligation are as follows:
|
2020 |
|
|
Present value at start of year |
|
|
Interest cost |
|
|
Actuarial (gains)/losses |
|
|
Present value at end of year |
|
Fair value of scheme assets
Changes in the fair value of scheme assets are as follows:
|
2020 |
|
|
Fair value at start of year |
|
|
Interest income |
|
|
Return on plan assets, excluding amounts included in interest income/(expense) |
|
|
Employer contributions |
|
|
Fair value at end of year |
|
Analysis of assets
The major categories of scheme assets are as follows:
|
2020 |
2019 |
|
|
Cash and cash equivalents |
|
|
|
Equity instruments |
|
|
|
Debt instruments |
|
|
|
Property |
|
|
|
|
|
Return on scheme assets
|
2020 |
2019 |
|
|
Return on scheme assets |
|
|
The pension scheme has not invested in any of the company's own financial instruments or in properties or other assets used by the company.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
20 |
Pension and other schemes (continued) |
Principal actuarial assumptions
The principal actuarial assumptions at the statement of financial position date are as follows:
|
2020 |
2019 |
|
|
Discount rate |
|
|
|
Inflation |
|
|
|
Share capital |
Allotted, called up and fully paid shares
|
2020 |
2019 |
|||
|
No. 000 |
£ 000 |
No. 000 |
£ 000 |
|
|
|
|
250 |
|
250 |
Rights, preferences and restrictions
|
Ordinary shares have the following rights, preferences and restrictions: |
|
Reserves |
Group
Profit and loss account
This reserve records retained earnings and accumulated losses.
Non-controlling interests
This reserve records movements on non-controlling interests. The movements in the year are disclosed on the statement of changes in equity.
The changes to each component of equity resulting from items of other comprehensive income for the current year were as follows:
|
Profit and loss account |
Total |
|
|
Remeasurement gain/loss on defined benefit pension schemes |
( |
( |
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
|
2020 |
2019 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Company
Operating leases
The total of future minimum lease payments is as follows:
|
2020 |
2019 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Analysis of changes in net debt |
Group
|
At 1 January 2020 |
Financing cash flows |
At 31 December 2020 |
|
|
Cash and cash equivalents |
|||
|
Cash |
2,209 |
171 |
2,380 |
|
Borrowings |
|||
|
Long term borrowings |
(823) |
823 |
- |
|
Short term borrowings |
(470) |
(235) |
(705) |
|
(1,293) |
588 |
(705) |
|
|
|
|
|
|
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
Related party transactions |
Group
Summary of transactions with key management
Key management personnel include all persons that have authority and responsibility for planning, directing and controlling the activities of the group. All directors are considered to be key management personnel of the group. Total compensation, including Employer's National Insurance Contributions, paid to directors and
members of senior management, who are also considered key management personnel, was £879,000 (2019: £690,000)
Loans from related parties
|
2020 |
Parent |
Total |
|
At start of period |
|
|
|
Repaid |
( |
( |
|
At end of period |
|
|
|
2019 |
Parent |
Total |
|
At start of period |
|
|
|
Repaid |
( |
( |
|
At end of period |
|
|
Terms of loans from related parties
Company
Other than the transactions disclosed below and within note 8, the company's other related party transactions are with entities whereby one of the entities to the transaction is a wholly owned subsidiary, and as such the transactions are exempt from disclosure.
Sauter Automation Limited
Notes to the Financial Statements for the Year Ended 31 December 2020 (continued)
|
25 |
Related party transactions (continued) |
Summary of transactions with parent
Summary of transactions with subsidiaries
During the year the company made purchases of £16,000 (2019: £2,000) from the subsidiary, Wren Environmental Limited, for provision of repair and maintenance services. During the year the company charged this subsidiary £48,000 (2019: £48,000) for staff and director recharges, and £4,000 (2019: £4,000) for service maintenance and sales of goods.
At the year end £3,000 was owed from the company to Wren Environmental Limited, and £2,000 was owed from the subsidiary to the company (2019: No amounts were owed).
Dividends received from the subsidiary in the year amounted to £450,000 (2019: £225,000).
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
Copies of the ultimate parent undertaking's consolidated financial statements may be obtained from:
Fr Sauter Holding AG
Im Surinam 55
CH 4058 Basel
Switzerland