Company Registration No. 06631612 (England and Wales)
EMPARK UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2017
31 December 2017
EMPARK UK LIMITED
COMPANY INFORMATION
Directors
L Blanco
CP d M Domingos Antonio
PM Povoas Mendes Leal
LD Verdi
J Mateos
Secretary
Pinsent Masons Secretarial Limited
Company number
06631612
Registered office
Unit 4B Stansted Courtyard
Parsonage Road
Takeley
Essex
CM22 6PU
Auditor
Rickard Luckin Limited
Aquila House
Waterloo Lane
Chelmsford
Essex
CM1 1BN
Bankers
HSBC Bank Plc
9 Market Place
Romford
Essex
RM1 3AF
EMPARK UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
EMPARK UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2017
- 1 -
The directors present the strategic report for the year ended 31 December 2017.
Fair review of the business
The results for the year and the financial position at the year end were considered satisfactory by the directors.
During 2017 the key factors driving the results were:
The results of the contract with Gatwick Airport have improved from the previous year. The improvement of our efficiency, especially regarding the valet services, better cost control and the decision from Gatwick Airport to replace the Car Parking equipment (in July 2017) have been the main factors behind this improvement.
Areas where excessive and inefficient costs have arisen continue to be identified and measures are being taken to return to profitability.
Growth is expected in the future as the new contracts gained continue to settle down and run in line with expectations.
Principal risks and uncertainties
The company recognises that its main financial risk accrues from credit terms extended to its customers. It is the company policy to regularly assess the credit risk profile of each of its current and prospective customer and to factor in this information into the future dealings with them. At the balance sheet date there is no significant concentration of credit risk. The values shown in the balance sheet represent the maximum credit risk exposure.
The company also monitors the financial strength, workload and quality of key suppliers and contractors to manage their capacity to deliver products and services to the required date and quality.
The objective of this approach is to provide a trading environment such that our customers can have confidence in our ability to deliver their projects with the minimum risk.
There is uncertainty following the referendum result for Britain to leave the European Union, that the availability of seasonal staff will be reduced. The issues of free movement and the reduction in the value of sterling, may impact the company wage costs in the future.
EMPARK UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 2 -
Key performance indicators
The key performance indicators are summarised below:
2017
2016
as restated
Turnover
£16.38m
£18.69m
Gross profit percentage
3.53%
1.82%
Liquidity
0.74
0.95
Gross wage per £1 of turnover
63.69p
66.35p
L Blanco
Director
3 April 2018
EMPARK UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED
31 DECEMBER 2017
31 December 2017
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2017.
Principal activities
The principal activity of the company was that of providing car park operation services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
L Blanco
CP d M Domingos Antonio
PM Povoas Mendes Leal
LD Verdi
J Mateos
V Lopez-Pinto
(Resigned 6 February 2017)
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Auditor
In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.
EMPARK UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED
31 DECEMBER 2017
31 December 2017
- 4 -
Statement of directors' responsibilities
The directors are responsible 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
L Blanco
Director
3 April 2018
EMPARK UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EMPARK UK LIMITED
- 5 -
Opinion
We have audited the financial statements of Empark UK Limited (the 'company') for the year ended 31 December 2017 which comprise the Statement of Income and Retained Earnings, the Balance Sheet, the 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 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:
give a true and fair view of the state of the company's affairs as at 31 December 2017 and of its loss 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.
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.
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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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.
We have nothing to report in this regard.
EMPARK UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EMPARK UK LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the 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 the knowledge and understanding of the 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, or returns adequate for our audit have not been received from branches not visited by us; or
the 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 Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the 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 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Paul Forster (Senior Statutory Auditor)
for and on behalf of Rickard Luckin Limited
3 April 2018
Chartered Accountants
Statutory Auditor
Aquila House
Waterloo Lane
Chelmsford
Essex
EMPARK UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EMPARK UK LIMITED
- 7 -
CM1 1BN
EMPARK UK LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2017
- 8 -
2017
2016
as restated
Notes
£
£
Turnover
3
16,375,908
18,691,854
Cost of sales
(15,798,217)
(18,351,623)
Gross profit
577,691
340,231
Administrative expenses
(792,298)
(732,198)
Other operating income
5,800
5,800
Operating loss
4
(208,807)
(386,167)
Interest receivable and similar income
7
639
-
Interest payable and similar expenses
8
(117,829)
(100,417)
Exceptional foreign exchange movement
20
(325,401)
-
Loss before taxation
(651,398)
(486,584)
Tax on loss
9
-
26,245
Loss for the financial year
(651,398)
(460,339)
Retained earnings brought forward
290,157
750,496
Retained earnings carried forward
(361,241)
290,157
The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.
EMPARK UK LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2017
31 December 2017
- 9 -
2017
2016
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
10
1,048,051
495,462
Tangible assets
11
33,686
38,505
1,081,737
533,967
Current assets
Debtors
13
1,374,476
2,169,246
Cash at bank and in hand
1,741,422
2,521,896
3,115,898
4,691,142
Creditors: amounts falling due within one year
14
(2,668,422)
(4,934,951)
Net current assets/(liabilities)
447,476
(243,809)
Total assets less current liabilities
1,529,213
290,158
Creditors: amounts falling due after more than one year
15
(1,890,453)
-
Net (liabilities)/assets
(361,240)
290,158
Capital and reserves
Called up share capital
17
1
1
Profit and loss reserves
(361,241)
290,157
Total equity
(361,240)
290,158
In accordance with the Companies Act 2006, s454, on a voluntary basis, the directors can amend these
financial statements if they subsequently prove to be defective.
The financial statements were approved by the board of directors and authorised for issue on 3 April 2018 and are signed on its behalf by:
L Blanco
Director
Company Registration No. 06631612
EMPARK UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
- 10 -
2017
2016
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
52,081
296,376
Interest paid
(117,829)
(100,417)
Income taxes refunded/(paid)
9,075
(133,481)
Net cash (outflow)/inflow from operating activities
(56,673)
62,478
Investing activities
Purchase of intangible assets
(724,440)
(228,903)
Purchase of tangible fixed assets
-
(1,947)
Interest received
639
-
Net cash used in investing activities
(723,801)
(230,850)
Net cash used in financing activities
-
-
Net decrease in cash and cash equivalents
(780,474)
(168,372)
Cash and cash equivalents at beginning of year
2,521,896
2,690,268
Cash and cash equivalents at end of year
1,741,422
2,521,896
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
- 11 -
1
Accounting policies
Company information
Empark UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 4B Stansted Courtyard, Parsonage Road, Takeley, Essex, CM22 6PU.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. This expectation is based upon the continued support of the parent company. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision on car parking services is recognised when the company becomes entitled to the income. Contracts contain fixed and variable revenue streams and the company becomes entitled to receive income based upon services provided to a point in time and by handling certain volumes of vehicle movements through car parking sites.
1.4
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.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably. Intangible assets acquired in developing car parking sites are recognised at cost and amortised over the life of the contract.
Intangible assets comprise of costs incurred in order to obtain the contract for the operation of the car parks. They are stated at cost less amortisation.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 12 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives (the life of the contract) on the following bases:
Start up Costs
5-10 years straight line
1.6
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:
Plant and machinery
20% on cost
Computer equipment
33.33% and 20% on cost
Motor vehicles
33.33% on cost
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 credited or charged to profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Cash at bank and in hand
Cash at bank and in hand 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.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 13 -
1.9
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
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 company 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 company after deducting all of its liabilities.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 14 -
Basic financial 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 15 -
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 company’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 when the company has 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.
1.13
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.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.15
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed.
1.16
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are 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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2017
2016
£
£
Turnover analysed by class of business
Fixed Income from contracts
13,361,793
15,863,250
Variable income from contracts
3,014,115
2,828,604
16,375,908
18,691,854
2017
2016
£
£
Other significant revenue
Interest income
639
-
4
Operating loss
2017
2016
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
-
(7,555)
Fees payable to the company's auditor for the audit of the company's financial statements
14,750
10,000
Depreciation of owned tangible fixed assets
4,819
3,232
Amortisation of intangible assets
171,851
167,109
Operating lease charges
537,819
707,350
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £- (2016 - £7,555).
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2017
2016
Number
Number
Cost of sales
330
366
Administrative
25
31
355
397
Their aggregate remuneration comprised:
2017
2016
£
£
Wages and salaries
11,077,766
12,759,186
Social security costs
721,010
729,669
Pension costs
150,092
103,248
11,948,868
13,592,103
6
Directors' remuneration
2017
2016
£
£
Remuneration for qualifying services
344,190
314,733
Company pension contributions to defined contribution schemes
3,379
1,417
347,569
316,150
Remuneration disclosed above include the following amounts paid to the highest paid director:
2017
2016
£
£
Remuneration for qualifying services
344,190
314,733
Company pension contributions to defined contribution schemes
3,379
1,417
7
Interest receivable and similar income
2017
2016
£
£
Interest income
Other interest income
639
-
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 18 -
8
Interest payable and similar expenses
2017
2016
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
117,829
100,417
9
Taxation
2017
2016
£
£
Current tax
UK corporation tax on profits for the current period
-
(26,245)
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2017
2016
£
£
Loss before taxation
(651,398)
(486,584)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2016: 20.00%)
(123,766)
(97,317)
Tax effect of income not taxable in determining taxable profit
(1,160)
(1,160)
Unutilised tax losses carried forward
124,926
72,232
Taxation charge/(credit) for the year
-
(26,245)
At balance sheet date there were £917,872 of tax losses available to carry forward against future trading profits.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 19 -
10
Intangible fixed assets
Start up Costs
£
Cost
At 1 January 2017
712,170
Additions - separately acquired
724,440
At 31 December 2017
1,436,610
Amortisation and impairment
At 1 January 2017
216,708
Amortisation charged for the year
171,851
At 31 December 2017
388,559
Carrying amount
At 31 December 2017
1,048,051
At 31 December 2016
495,462
11
Tangible fixed assets
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2017
362,200
39,779
4,256
406,235
Disposals
(261,083)
(38,404)
-
(299,487)
At 31 December 2017
101,117
1,375
4,256
106,748
Depreciation and impairment
At 1 January 2017
323,695
39,779
4,256
367,730
Depreciation charged in the year
4,819
-
-
4,819
Eliminated in respect of disposals
(261,083)
(38,404)
-
(299,487)
At 31 December 2017
67,431
1,375
4,256
73,062
Carrying amount
At 31 December 2017
33,686
-
-
33,686
At 31 December 2016
38,505
-
-
38,505
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 20 -
12
Financial instruments
2017
2016
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,091,170
1,800,828
Carrying amount of financial liabilities
Measured at amortised cost
2,174,017
4,366,777
13
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
1,005,693
1,562,186
Corporation tax recoverable
126,755
135,830
Other debtors
85,477
238,642
Prepayments and accrued income
156,551
232,588
1,374,476
2,169,246
14
Creditors: amounts falling due within one year
2017
2016
£
£
Trade creditors
1,732,353
1,026,067
Gross amounts due to contract customers
175,715
1,830,185
Amounts due to group undertakings
-
1,310,255
Other taxation and social security
494,405
568,174
Other creditors
183,773
85,132
Accruals and deferred income
82,176
115,138
2,668,422
4,934,951
15
Creditors: amounts falling due after more than one year
2017
2016
Notes
£
£
Amounts due to group undertakings
1,890,453
-
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 21 -
16
Retirement benefit schemes
2017
2016
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
150,092
103,248
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
1 Ordinary shares of £1 each
1
1
1
1
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2017
2016
£
£
Within one year
153,491
169,999
Between two and five years
223,722
313,585
377,213
483,584
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2017
2016
£
£
Acquisition of intangible assets
116,057
-
At the year end, Empark UK Ltd had committed to purchasing additional equipment for the Hillingdon Hospital car park. The total cost of this equipment will be £165,795 and at the balance sheet date, Empark UK Limited had been invoiced for 30% of this cost. This is shown in Intangible assets.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 22 -
20
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2017
2016
£
£
Aggregate compensation
420,303
383,158
Included within creditors is £1,890,453 (2016: £1,310,255) due to Empark Aparcamientos y Servicios S.A., the immediate parent company in respect of an intercompany loan. Interest of £117,829 was charged on this loan in the year.
During the year to 31 December 2017 the loan arrangements were varied to be denominated in Euros. The exchange difference has been shown as an exceptional item on the face of the Statement of Income and Retained Earnings.
21
Controlling party
The company is a wholly owned subsidiary of Empark Aparcamientos y Servicios S.A., a company incorporated in Spain.
This was both the immediate and ultimate parent company in the previous year. On 19 December 2017, Empark Aparcamientos y Servicios S.A. was purchased by Macquarie European Infrastructure Fund 5 (MEIF5). Arena Holdings S.A.are now the 100% owners of Empark Aparcamientos y Servicios S.A.
The financial statements of the company are included in the consolidated financial statements of Empark Aparcamientos y Servicios S.A.
The financial statements of Empark Aparcamientos y Servicios S.A are available to the public at madrid.informacion(at)registromercantil.org.
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 23 -
22
Cash generated from operations
2017
2016
£
£
Loss for the year after tax
(651,398)
(460,339)
Adjustments for:
Taxation charged/(credited)
-
(26,245)
Finance costs
117,829
100,417
Investment income
(639)
-
Amortisation and impairment of intangible assets
171,851
167,109
Depreciation and impairment of tangible fixed assets
4,819
3,232
Movements in working capital:
Decrease in debtors
785,695
376,035
(Decrease)/increase in creditors
(376,076)
136,167
Cash generated from operations
52,081
296,376
23
Prior period adjustment
In the prior year, certain rechargeable costs associated with delivering the company's services were deferred in error. Costs of £226,009 have now been charged to the profit and loss account for the year ended 31 December 2016 and are reflected against their relevant income headings in the comparative figures.
During the year ended 31 December 2015 revenue earned from a contract was overstated. An adjustment of £203,901 has been made in respect of this error and is reflected as a correction to the company's opening reserves. A similar error was noted in 2016 totalling £23,194. This has now been credited to the profit and loss account for the year ended 31 December 2016 and is reflected in the comparative figures.
Changes to the balance sheet
At 31 December 2016
As previously reported
Adjustment at 1 Jan 2016
Adjustment at 31 Dec 2016
As restated
£
£
£
£
Current assets
Debtors due within one year
2,395,255
-
(226,009)
2,169,246
Creditors due within one year
Other creditors
(4,186,070)
(203,901)
23,194
(4,366,777)
Net assets
696,874
(203,901)
(202,815)
290,158
Capital and reserves
Profit and loss
696,873
(203,901)
(202,815)
290,157
EMPARK UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
23
Prior period adjustment
(Continued)
- 24 -
Changes to the profit and loss account
Period ended 31 December 2016
As previously reported
Adjustment
As restated
£
£
£
Turnover
18,894,669
(202,815)
18,691,854
Loss for the financial period
(257,524)
(202,815)
(460,339)
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