Form Northern South Ltd's annual accounts, for the year ended 31/3/08:
Northern South has entered into an agreement with SEAT (UK) whereby it runs the race programme in addition to the preparatory work on the cars. The basis of these arrangements is that Northern South Ltd are entitled to receive commission after each race event providing that the cars' performance in those races meet certain criteria. In addition to this a management charge becomes payable on each anniversary of the agreement, effectively reimbursing Northern South Ltd for workshop costs incurred on its own account.
Interesting that a commission payment was receivable by NSL specifically dependent on race performance. However, as the NSL/SEAT (UK) venture had its own bank account, any figures specifically relating to the actual cost of running those Leons in 2007 remains absent from Northern South's accounts:
As these costs and surplus funds are not the responsibility or property or Northern South Ltd these financial statements exclude any payments so made, and also the income derived from this activity. [...] the proceeds from invoices raised, and costs borne by Seat Sport (UK) are excluded since it is SEAT (UK) Ltd that bears the responsibility for approval of transactions and becomes entitled to surplus funds remaining after the payment of Norther South Ltd's commission"
Hmm. Strictly speaking NSL should be showing these costs in their books (as they paid them!), even if they are just recharges to SEAT UK. However, NSL qualify as a "small" company and therefore are not required to have its books externally audited...
