Company registration number 01406940 (England and Wales)
EFTEC LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
EFTEC LIMITED
COMPANY INFORMATION
Directors
Mr L Guilliams
Mr M A Thomi
Mr T Wirz
(Appointed 3 March 2022)
Mr S Davis
(Appointed 17 November 2022)
Company number
01406940
Registered office
Treherbert Road
Rhigos
Aberdare
Mid Glamorgan
United Kingdom
CF44 9UE
Auditor
Azets Audit Services
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
EFTEC LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
EFTEC LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
Turnover has decreased slightly from £21.3m in 2021 to £21.1m in 2022, mainly due to challenges faced by the automotive sector.
The company's gross profit margin has also decreased slightly from 27.9% in 2021 to 24.9% in 2022. Direct costs have continued to increase, mainly due to increased charges from the parent company and the impact of foreign exchange. Economic uncertainty remained through 2022.
The company has incurred a loss of £2,207,588 for the year ended 31 December 2022 and at that date has net liabilities of £1,053,160, however the company's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to continue trading for the foreseeable future.
The directors have obtained confirmation from the company's ultimate parent company of financial support for a period of at least 12 months from the date of approval of these financial statements, thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Principal risks and uncertainties
The main risks to achieving the business strategy have been assessed by the directors and can be summarised as follows
| | |
| The main risks affecting the business in 2022 remained similar to those in 2021. Pricing pressures from customer cost reduction programmes is a key factor along with foreign exchange and commodity risk exposures. | These risks are mitigated by continuously improving the products and services the company offers. |
| The directors believe that the significant financial risk facing the company is foreign currency risk. The company buys and sells in a number of currencies including the Euro, US Dollar, and British Pound. | The company has mitigated this risk through a natural foreign currency hedge against the Euro due to it purchasing and selling in Euros. |
| Time to market implementation of product solutions that customers require are crucial to keep competitive advantage | Technical and business knowledge from group functions and companies are imbedded in the organisation |
| The company can face the problem of not finding the required competences for key positions serving a global customer environment | Centrally managed resources in key business areas giving timely support on a permanent and temporary basis |
EFTEC LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators
Mr L Guilliams
Director
13 February 2024
EFTEC LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of the manufacture of protective coatings and rust preventatives for the automotive industry.
Results and dividends
The results for the year are set out on page 8.
During the year, no dividends were paid (2021: £1,120,000).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr L Guilliams
Mr M A Thomi
Mr T Wirz
(Appointed 3 March 2022)
Mr S Davis
(Appointed 17 November 2022)
Auditor
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.
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;
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.
EFTEC LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
On behalf of the board
Mr L Guilliams
Mr M A Thomi
Director
Director
13 February 2024
EFTEC LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EFTEC LIMITED
- 5 -
We have audited the financial statements of Eftec Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 except for the possible effects of the matter described in the basis for qualified opinion section of our report. the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 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.
Basis for qualified opinion
Other debtors include amounts receivable of approximately £397,000 which have not been recovered subsequent to 31 December 2022, and we have not been given evidence to support their recovery. Accordingly we are unable to satisfy ourselves as to the recoverability of these amounts
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 qualified opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' 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 financial statements are 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report we were unable to satisfy ourselves as to the recoverability of Other Debtors of approximately £397,000 at 31 December 2022. We have concluded that where the other information refers to other debtors or related balances it may be materially misstated for the same reason.
EFTEC LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EFTEC LIMITED
- 6 -
Qualified 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
Except for the matter described in the basis for qualified opinion section of our report, 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 or the directors' report.
Arising solely from the limitation on the scope of our work on Other Debtors, referrred to above :
We have not obtained all of the information and explanations that we considered necessary for the purpose of our audit ; and
We were unable to determine whether adequate accounting records have been kept.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made.
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
EFTEC LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EFTEC LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Andrew Howells
Senior Statutory Auditor
For and on behalf of Azets Audit Services
14 February 2024
Chartered Accountants
Statutory Auditor
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
EFTEC LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
21,116,373
21,316,615
Cost of sales
(15,850,648)
(15,367,598)
Gross profit
5,265,725
5,949,017
Distribution costs
(888,196)
(870,691)
Administrative expenses
(6,779,941)
(3,982,134)
Other operating income
257,547
13,347
Operating (loss)/profit
4
(2,144,865)
1,109,539
Interest payable and similar expenses
7
(225,354)
(167,758)
(Loss)/profit before taxation
(2,370,219)
941,781
Tax on (loss)/profit
8
162,631
(161,570)
(Loss)/profit for the financial year
(2,207,588)
780,211
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EFTEC LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
10
14,251
Tangible assets
11
1,020,081
934,741
1,034,332
934,741
Current assets
Stocks
12
7,648,655
4,510,815
Debtors
13
5,456,760
7,424,912
Cash at bank and in hand
1,030,842
945,780
14,136,257
12,881,507
Creditors: amounts falling due within one year
14
(7,412,771)
(4,600,842)
Net current assets
6,723,486
8,280,665
Total assets less current liabilities
7,757,818
9,215,406
Creditors: amounts falling due after more than one year
15
(8,810,978)
(8,060,978)
Net (liabilities)/assets
(1,053,160)
1,154,428
Capital and reserves
Called up share capital
19
351,500
351,500
Capital redemption reserve
18,500
18,500
Profit and loss reserves
(1,423,160)
784,428
Total equity
(1,053,160)
1,154,428
The financial statements were approved by the board of directors and authorised for issue on 13 February 2024 and are signed on its behalf by:
Mr L Guilliams
Mr M A Thomi
Director
Director
Company Registration No. 01406940
EFTEC LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
351,500
18,500
1,124,217
1,494,217
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
780,211
780,211
Dividends
9
-
-
(1,120,000)
(1,120,000)
Balance at 31 December 2021
351,500
18,500
784,428
1,154,428
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(2,207,588)
(2,207,588)
Balance at 31 December 2022
351,500
18,500
(1,423,160)
(1,053,160)
EFTEC LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
406,271
(1,184,163)
Interest paid
(225,354)
(167,758)
Income taxes paid
(610,386)
Net cash outflow from operating activities
(429,469)
(1,351,921)
Investing activities
Purchase of intangible assets
(14,744)
Purchase of tangible fixed assets
(220,725)
(136,038)
Net cash used in investing activities
(235,469)
(136,038)
Financing activities
Repayment of borrowings
750,000
401,720
Dividends paid
(1,120,000)
Net cash generated from/(used in) financing activities
750,000
(718,280)
Net increase/(decrease) in cash and cash equivalents
85,062
(2,206,239)
Cash and cash equivalents at beginning of year
945,780
3,152,020
Cash and cash equivalents at end of year
1,030,842
945,780
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
1
Accounting policies
Company information
Eftec Limited is a private company limited by shares incorporated in England and Wales. The registered office is Treherbert Road, Rhigos, Aberdare, Mid Glamorgan, United Kingdom, CF44 9UE.
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 on the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company's business activities, together with factors likely to affect its future development, performance, and position are set out in the strategic report on page 1.true
The company has incurred a loss of £2,207,588 for the year ended 31 December 2022 and at that date has net liabilities of £1,053,160, however the company's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to continue trading for the foreseeable future.
The directors have obtained confirmation from the company's ultimate parent company of financial support for a period of at least 12 months from the date of approval of these financial statements, thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Turnover is recognised upon the date of dispatch of the goods being engineered materials and applications systems for bonding, coating, sealing and damping in the automotive industry.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
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 where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
5 Years
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
33 years
Plant and machinery
5 years
Fixtures, fittings & equipment
10 years
Motor vehicles
4 years
No depreciation is provided on freehold land.
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.
1.6
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.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks.
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
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.
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.
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.
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.
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Other 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.
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 transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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.
1.12
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.
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.13
Retirement benefits
The company operates a defined contribution pension scheme. Pension costs in respect of the company's scheme are charged to the profit and loss account in the period to which they relate.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.15
Government grants
Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
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.
Critical estimates
The following estimates have had the most significant effect on amounts recognised in the financial statements.
Useful lives and depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date based on the expected utilitisation of the assets of the company. The carrying amounts are analysed in note 11. Actual results, however, may vary due to technical obsolescence.
Stock
Stocks are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires estimates to be made, which include forecast consumer demand, the economic environment and stock loss trends.
Prepayments
Management recognises a prepayment asset, which have been invoiced at the year end but the cost may partially or in total relate to post period end. This is based on purchase invoices or goods invoiced not yet received.
Accruals and other payables
Management recognises a provision for liabilities, which have not been invoiced at the year end but which are likely to crystallise post period end. This is based on purchase orders.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sales of goods, being waxes and PVC materials
21,116,373
21,316,615
2022
2021
£
£
Turnover analysed by geographical market
UK
5,666,349
4,680,300
Europe & rest of world
15,450,024
16,636,315
21,116,373
21,316,615
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover and other revenue
(Continued)
- 18 -
2022
2021
£
£
Other revenue
Grants received
-
13,347
4
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
502,512
(566,086)
Government grants
-
(13,347)
Fees payable to the company's auditor for the audit of the company's financial statements
45,539
25,250
Depreciation of owned tangible fixed assets
135,385
145,963
Amortisation of intangible assets
493
-
Operating lease charges
73,853
40,101
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administrative and technical
17
13
Sales Representatives
3
3
Production
16
17
Total
36
33
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,168,589
1,132,222
Social security costs
112,801
93,774
Pension costs
84,346
25,705
1,365,736
1,251,701
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
6,000
Company pension contributions to defined contribution schemes
600
-
6,600
7
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
225,354
167,758
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(172,518)
172,392
Adjustments in respect of prior periods
126
(21,221)
Total current tax
(172,392)
151,171
Deferred tax
Origination and reversal of timing differences
9,761
10,399
Total tax (credit)/charge
(162,631)
161,570
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
8
Taxation
(Continued)
- 20 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
(Loss)/profit before taxation
(2,370,219)
941,781
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(450,342)
178,938
Tax effect of expenses that are not deductible in determining taxable profit
8,200
8,771
Adjustments in respect of prior years
101
(22,894)
Effect of change in corporation tax rate
(87,775)
Rate changes
(2,342)
Enhanced capital allowances
(8,329)
(903)
Deferred tax not recognised
375,514
Taxation (credit)/charge for the year
(162,631)
161,570
9
Dividends
2022
2021
£
£
Final paid
1,120,000
10
Intangible fixed assets
Software
£
Cost
At 1 January 2022
Additions
14,744
At 31 December 2022
14,744
Amortisation and impairment
At 1 January 2022
Amortisation charged for the year
493
At 31 December 2022
493
Carrying amount
At 31 December 2022
14,251
At 31 December 2021
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
11
Tangible fixed assets
Land and buildings Freehold
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2022
1,341,405
4,155,819
24,612
149,418
5,671,254
Additions
13,402
127,729
79,594
220,725
At 31 December 2022
1,354,807
127,729
4,235,413
24,612
149,418
5,891,979
Depreciation and impairment
At 1 January 2022
643,355
3,984,357
14,467
94,334
4,736,513
Depreciation charged in the year
42,618
71,842
2,126
18,799
135,385
At 31 December 2022
685,973
4,056,199
16,593
113,133
4,871,898
Carrying amount
At 31 December 2022
668,834
127,729
179,214
8,019
36,285
1,020,081
At 31 December 2021
698,050
171,462
10,145
55,084
934,741
12
Stocks
2022
2021
£
£
Raw materials and consumables
5,481,246
3,130,629
Work in progress
500,717
553,577
Finished goods and goods for resale
1,666,692
826,609
7,648,655
4,510,815
13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,338,364
1,663,887
Corporation tax recoverable
523,705
Amounts owed by group undertakings
1,730,612
4,369,252
Other debtors
1,833,811
1,372,137
Prepayments and accrued income
30,268
9,875
5,456,760
7,415,151
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Debtors
(Continued)
- 22 -
2022
2021
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
9,761
Total debtors
5,456,760
7,424,912
Trade debtors disclosed above are measured at amortised cost.
Total trade debtors (net of allowances) held by the company at 31 December 2022 amounted to £1,338,364 (2021 - £1,663,887), comprising the amount presented above and trade debtors classified as held for sale amounting to £- (2021 - £-).
14
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,202,299
1,104,140
Amounts owed to group undertakings
4,987,452
2,332,172
Corporation tax
259,073
Other creditors
85,594
173,645
Accruals and deferred income
1,137,426
731,812
7,412,771
4,600,842
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Other borrowings
16
8,752,000
8,002,000
Government grants
58,978
58,978
8,810,978
8,060,978
16
Loans and overdrafts
2022
2021
£
£
Loans from group undertakings
8,752,000
8,002,000
Payable after one year
8,752,000
8,002,000
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
16
Loans and overdrafts
(Continued)
- 23 -
The loan due to group undertakings is unsecured and there are no fixed repayments terms, although no repayments are anticipated within the next 12 months. The interest rate is fixed as the annual mid year rate for 10 year swaps plus 1.75%, and interest is payable on a quarterly basis.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2022
2021
Balances:
£
£
ACAs
-
7,765
Other
-
1,996
-
9,761
2022
Movements in the year:
£
Asset at 1 January 2022
(9,761)
Charge to profit or loss
9,761
Liability at 31 December 2022
-
18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
84,346
25,705
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.
19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
351,500
351,500
351,500
351,500
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
20
Operating lease commitments
Lessee
The company has various plant and machinery operating leases.
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:
2022
2021
£
£
Within one year
8,446
8,446
Between two and five years
3,579
14,626
12,025
23,072
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2022
2021
£
£
Aggregate compensation
228,821
224,517
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Related party transactions
(Continued)
- 25 -
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2022
2021
2022
2021
£
£
£
£
Other related parties
7,031,422
7,791,542
4,180,000
2,836,408
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
8,752,000
8,002,000
Other related parties
4,987,452
2,332,172
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts due from related parties
£
£
Other related parties
1,730,612
4,369,252
Other information
During the period, dividends of £nil (2021: £1,120,000) were paid to the parent company.
22
Ultimate controlling party
The company is a wholly owned subsidiary undertaking of EFTEC Holding AG, which is registered in Switzerland. EFTEC Holding AG is a wholly owned subsidiary undertaking of EMS-Chemie Holding AG, which is registered in Switzerland, and is the ultimate parent undertaking.
Copies of the immediate and ultimate parent undertakings' financial statements may be obtained from the Secretary, EMS-Chemie Holding AG, Via Innovativa 1, CH-7013 Domat/EMS, Switzerland.
EFTEC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
23
Cash generated from/(absorbed by) operations
2022
2021
£
£
(Loss)/profit for the year after tax
(2,207,588)
780,211
Adjustments for:
Taxation (credited)/charged
(162,631)
161,570
Finance costs
225,354
167,758
Amortisation and impairment of intangible assets
493
Depreciation and impairment of tangible fixed assets
135,385
145,963
Movements in working capital:
(Increase)/decrease in stocks
(3,137,840)
1,135,120
Decrease/(increase) in debtors
2,482,096
(1,818,644)
Increase/(decrease) in creditors
3,071,002
(1,750,824)
Decrease in deferred income
-
(5,317)
Cash generated from/(absorbed by) operations
406,271
(1,184,163)
24
Analysis of changes in net debt
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
945,780
85,062
1,030,842
Borrowings excluding overdrafts
(8,002,000)
(750,000)
(8,752,000)
(7,056,220)
(664,938)
(7,721,158)
2022-12-312022-01-01falseCCH SoftwareCCH Accounts Production 2023.300Mr L GuilliamsMr M A ThomiMr T WirzMr S DavisMr S Davisfalse014069402022-01-012022-12-3101406940bus:Director12022-01-012022-12-3101406940bus:Director22022-01-012022-12-3101406940bus:Director32022-01-012022-12-3101406940bus:Director42022-01-012022-12-3101406940bus:Director52022-01-012022-12-3101406940bus:RegisteredOffice2022-01-012022-12-31014069402022-12-31014069402021-01-012021-12-3101406940core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3101406940core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3101406940core:OtherResidualIntangibleAssets2022-12-3101406940core:OtherResidualIntangibleAssets2021-12-3101406940core:ComputerSoftware2022-12-3101406940core:ComputerSoftware2021-12-31014069402021-12-3101406940core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3101406940core:ConstructionInProgressAssetsUnderConstruction2022-12-3101406940core:PlantMachinery2022-12-3101406940core:FurnitureFittings2022-12-3101406940core:MotorVehicles2022-12-3101406940core:LandBuildingscore:OwnedOrFreeholdAssets2021-12-3101406940core:ConstructionInProgressAssetsUnderConstruction2021-12-3101406940core:PlantMachinery2021-12-3101406940core:FurnitureFittings2021-12-3101406940core:MotorVehicles2021-12-3101406940core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3101406940core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3101406940core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3101406940core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3101406940core:CurrentFinancialInstruments2022-12-3101406940core:CurrentFinancialInstruments2021-12-3101406940core:Non-currentFinancialInstruments2022-12-3101406940core:Non-currentFinancialInstruments2021-12-3101406940core:ShareCapital2022-12-3101406940core:ShareCapital2021-12-3101406940core:CapitalRedemptionReserve2022-12-3101406940core:CapitalRedemptionReserve2021-12-3101406940core:RetainedEarningsAccumulatedLosses2022-12-3101406940core:RetainedEarningsAccumulatedLosses2021-12-3101406940core:ShareCapital2020-12-3101406940core:CapitalRedemptionReserve2020-12-3101406940core:RetainedEarningsAccumulatedLosses2020-12-31014069402021-12-31014069402020-12-3101406940core:IntangibleAssetsOtherThanGoodwill2022-01-012022-12-3101406940core:LandBuildingscore:OwnedOrFreeholdAssets2022-01-012022-12-3101406940core:PlantMachinery2022-01-012022-12-3101406940core:FurnitureFittings2022-01-012022-12-3101406940core:MotorVehicles2022-01-012022-12-3101406940core:UKTax2022-01-012022-12-3101406940core:UKTax2021-01-012021-12-310140694012022-01-012022-12-310140694012021-01-012021-12-310140694022022-01-012022-12-310140694022021-01-012021-12-310140694032022-01-012022-12-310140694032021-01-012021-12-3101406940core:ComputerSoftware2021-12-3101406940core:ComputerSoftwarecore:ExternallyAcquiredIntangibleAssets2022-01-012022-12-3101406940core:ComputerSoftware2022-01-012022-12-3101406940core:LandBuildingscore:OwnedOrFreeholdAssets2021-12-3101406940core:ConstructionInProgressAssetsUnderConstruction2021-12-3101406940core:PlantMachinery2021-12-3101406940core:FurnitureFittings2021-12-3101406940core:MotorVehicles2021-12-3101406940core:ConstructionInProgressAssetsUnderConstruction2022-01-012022-12-3101406940core:WithinOneYear2022-12-3101406940core:WithinOneYear2021-12-3101406940core:BetweenTwoFiveYears2022-12-3101406940core:BetweenTwoFiveYears2021-12-3101406940core:OtherRelatedPartiescore:SaleOrPurchaseGoods2022-01-012022-12-3101406940core:OtherRelatedPartiescore:SaleOrPurchaseGoods2021-01-012021-12-3101406940core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntity2022-12-3101406940bus:PrivateLimitedCompanyLtd2022-01-012022-12-3101406940bus:FRS1022022-01-012022-12-3101406940bus:Audited2022-01-012022-12-3101406940bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP