Company registration number 14254101 (England and Wales)
FIFAB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
FIFAB LIMITED
COMPANY INFORMATION
Directors
J Penman
(Appointed 21 September 2022)
R Waterson
(Appointed 21 September 2022)
Mr R P Morris
(Appointed 21 September 2022)
Mr C McIntosh
(Appointed 21 September 2022)
Mr S Smith
(Appointed 21 September 2022)
M A Gare
(Appointed 25 July 2022)
W M Taylor
(Appointed 21 September 2022)
Secretary
S Allsopp
Company number
14254101
Registered office
Ship Canal House
98 King Street
Manchester
United Kingdom
M2 4WU
Auditor
Azets Audit Services
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
FIFAB LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 29
FIFAB LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 1 -

The directors present the strategic report for the period ended 30 September 2023.

Review of the business

On 2 February 2023 the company acquired a 100% investment in Fifab Holdings Limited. Trading for the period from the date of acquisition is shown in the statement of income and retained earnings, with the group reporting turnover of £7.1m and profit after tax of £1.0m.

Principal risks and uncertainties

The principal risks affecting the growth of the group include the uncertain economic climate, the availability of labour and competition for available work, both from home based and overseas companies.

Development and performance

The group will continue to meet the demands of its varied customer base, promoting continuous improvement, people development, best practice lean manufacturing, and state of the art technological capability.

Key performance indicators

The directors regard turnover and gross profit percentage as key performance indicators. In the period under review the group’s turnover was £7.1m. The group’s gross profit percentage for the period was 34%.

On behalf of the board

J Penman
Director
9 April 2024
FIFAB LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 2 -

The directors present their annual report and financial statements for the period ended 30 September 2023.

Principal activities

The principal activity of the company is that of a holding company. The principal activity of the group is that of manfacture of precision sheet metal products, electro-mechanical assemblies and precision machine components.

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

J Penman
(Appointed 21 September 2022)
R Waterson
(Appointed 21 September 2022)
Mr R P Morris
(Appointed 21 September 2022)
Mr C McIntosh
(Appointed 21 September 2022)
Mr S Smith
(Appointed 21 September 2022)
M A Gare
(Appointed 25 July 2022)
W M Taylor
(Appointed 21 September 2022)
Auditor

Azets were appointed as auditor to the group during the year. The auditor, Azets, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

FIFAB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 3 -
Statement of disclosure to auditor

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

On behalf of the board
J Penman
Director
9 April 2024
FIFAB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FIFAB LIMITED
- 4 -
Opinion

We have audited the financial statements of Fifab Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 September 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The 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.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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:

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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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.

FIFAB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FIFAB LIMITED
- 6 -

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:

 

 

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.

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.

David MacCallum (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
9 April 2024
Chartered Accountants
Statutory Auditor
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
FIFAB LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 7 -
14 month period
ended
30 September
2023
Notes
£
Turnover
3
7,136,381
Cost of sales
(4,715,959)
Gross profit
2,420,422
Distribution costs
(540,945)
Administrative expenses
(448,250)
Other operating income
12,480
Operating profit
4
1,443,707
Interest receivable and similar income
7
20,647
Interest payable and similar expenses
8
(156,568)
Profit before taxation
1,307,786
Tax on profit
9
(283,325)
Profit for the financial period
1,024,461
Profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
FIFAB LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 8 -
2023
Notes
£
£
Fixed assets
Goodwill
10
121,832
Tangible assets
11
2,308,645
2,430,477
Current assets
Stocks
14
656,852
Debtors
15
1,502,593
Cash at bank and in hand
1,959,047
4,118,492
Creditors: amounts falling due within one year
16
(2,560,028)
Net current assets
1,558,464
Total assets less current liabilities
3,988,941
Creditors: amounts falling due after more than one year
17
(2,803,293)
Provisions for liabilities
Deferred tax liability
20
159,187
(159,187)
Net assets
1,026,461
Capital and reserves
Called up share capital
22
2,000
Profit and loss reserves
1,024,461
Total equity
1,026,461
The financial statements were approved by the board of directors and authorised for issue on 9 April 2024 and are signed on its behalf by:
09 April 2024
J Penman
Director
Company registration number 14254101 (England and Wales)
FIFAB LIMITED
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2023
30 September 2023
- 9 -
2023
Notes
£
£
Fixed assets
Investments
12
4,025,126
Current assets
Debtors
15
664,500
Cash at bank and in hand
65,982
730,482
Creditors: amounts falling due within one year
16
(2,150,838)
Net current liabilities
(1,420,356)
Total assets less current liabilities
2,604,770
Creditors: amounts falling due after more than one year
17
(2,760,012)
Net liabilities
(155,242)
Capital and reserves
Called up share capital
22
2,000
Profit and loss reserves
(157,242)
Total equity
(155,242)

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £157,242.

The financial statements were approved by the board of directors and authorised for issue on 9 April 2024 and are signed on its behalf by:
09 April 2024
J Penman
Director
Company registration number 14254101 (England and Wales)
FIFAB LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 25 July 2022
-
-
-
Period ended 30 September 2023:
Profit and total comprehensive income
-
1,024,461
1,024,461
Issue of share capital
22
2,000
-
2,000
Balance at 30 September 2023
2,000
1,024,461
1,026,461
FIFAB LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 25 July 2022
-
-
-
Period ended 30 September 2023:
Profit and total comprehensive income
-
(157,242)
(157,242)
Issue of share capital
22
2,000
-
2,000
Balance at 30 September 2023
2,000
(157,242)
(155,242)
FIFAB LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 12 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
1,344,533
Interest paid
(132,170)
Income taxes paid
(188,750)
Net cash inflow/(outflow) from operating activities
1,023,613
Investing activities
Purchase of business
324,452
Purchase of tangible fixed assets
(96,968)
Interest received
20,647
Net cash generated from/(used in) investing activities
248,131
Financing activities
Proceeds from issue of shares
1,300
Proceeds from borrowings
200,000
Proceeds from new bank loans
1,530,812
Repayment of bank loans
(925,433)
Payment of finance leases obligations
(119,376)
Net cash generated from/(used in) financing activities
687,303
Net increase in cash and cash equivalents
1,959,047
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
1,959,047
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 13 -
1
Accounting policies
Company information

Fifab Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of Fifab Limited and all of its subsidiaries.

1.1
Reporting period

The group has extended the period to 14 months to align the year end of all group entities. No comparatives are available as this is the first year of the group.

1.2
Accounting convention

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

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

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

1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Fifab Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 September 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

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

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Going concern

The group has a strong balance sheet, good liquidity and a solid customer base. As a consequence the directors believe that the group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

 

The directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the forseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

1.6
Turnover

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

 

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 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.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

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

1.8
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:

Freehold land and buildings
2% straight line
Plant and equipment
12.5% - 20% straight line
Fixtures and fittings
12.5% - 20% straight line

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

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss.

 

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

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

1.10
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

1.11
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.

1.12
Cash and cash equivalents

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

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
Financial instruments

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

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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. 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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

Derecognition of financial liabilities

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

1.14
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs.

1.15
Taxation

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

Current tax

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

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.16
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.

1.17
Retirement benefits

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

1.18
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

1.19
Government grants

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

 

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

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
Key sources of estimation uncertainty

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

Business Combinations

There are various estimates and judgements applied in the acquisition of Fifab Holdings Limited. These include:

 

 

Fair values of assets & liabilities acquired in business combinations are assessed by Management based on third party valuations, where available, and on their knowledge of the industry and conditions of the assets acquired.

 

The consideration for the business combination consisted of cash, loan notes and shares. Management has reviewed the interest rate on loan notes issued and is satisfied that this is comparable to a market rate of interest.

 

Management assess the useful life of goodwill arising on a business combination and amortise the goodwill over this period. Based on knowledge of the industry, management has assessed this as being 10 years.

3
Turnover and other revenue
2023
£
Turnover analysed by class of business
Precision sheet metal products
7,136,381
2023
£
Other revenue
Interest income
20,647
Grants received
12,480
4
Operating profit
2023
£
Operating profit for the period is stated after charging/(crediting):
Government grants
(12,480)
Depreciation of owned tangible fixed assets
112,763
Depreciation of tangible fixed assets held under finance leases
61,381
Amortisation of intangible assets
8,702
Operating lease charges
418
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 20 -
5
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
4,500
Audit of the financial statements of the company's subsidiaries
23,000
27,500
6
Employees

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

Group
Company
2023
2023
Number
Number
Administration
12
-
Production
58
-
Total
70
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2023
£
£
Wages and salaries
2,442,255
-
0
Social security costs
220,256
-
Pension costs
125,695
-
0
2,788,206
-
0
7
Interest receivable and similar income
2023
£
Interest income
Interest on bank deposits
20,647
2023
Investment income includes the following:
£
Interest on financial assets not measured at fair value through profit or loss
20,647
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 21 -
8
Interest payable and similar expenses
2023
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
118,957
Other finance costs:
Interest on finance leases and hire purchase contracts
13,213
Other interest
24,398
Total finance costs
156,568
9
Taxation
2023
£
Current tax
UK corporation tax on profits for the current period
302,199
Deferred tax
Origination and reversal of timing differences
(18,874)
Total tax charge
283,325

The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:

2023
£
Profit before taxation
1,307,786
Expected tax charge based on the standard rate of corporation tax in the UK of 23.56%
308,114
Tax effect of expenses that are not deductible in determining taxable profit
7,645
Tax effect of income not taxable in determining taxable profit
(3,386)
Amortisation on assets not qualifying for tax allowances
2,050
Fixed asset differences
1,501
Effect of change in tax rate
(32,599)
Taxation charge
283,325
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 22 -
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 25 July 2022
-
0
Additions
130,534
At 30 September 2023
130,534
Amortisation and impairment
At 25 July 2022
-
0
Amortisation charged for the period
8,702
At 30 September 2023
8,702
Carrying amount
At 30 September 2023
121,832
The company had no intangible fixed assets at 30 September 2023.
11
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 25 July 2022
-
0
-
0
-
0
-
0
Additions
-
0
82,276
14,692
96,968
Business combinations
1,450,000
901,567
34,254
2,385,821
At 30 September 2023
1,450,000
983,843
48,946
2,482,789
Depreciation and impairment
At 25 July 2022
-
0
-
0
-
0
-
0
Depreciation charged in the period
19,333
149,513
5,298
174,144
At 30 September 2023
19,333
149,513
5,298
174,144
Carrying amount
At 30 September 2023
1,430,667
834,330
43,648
2,308,645
The company had no tangible fixed assets at 30 September 2023.
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
11
Tangible fixed assets
(Continued)
- 23 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2023
£
£
Plant and equipment
268,544
-
0
12
Fixed asset investments
Group
Company
2023
2023
Notes
£
£
Investments in subsidiaries
13
-
0
4,025,126
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 25 July 2022
-
Additions
4,025,126
At 30 September 2023
4,025,126
Carrying amount
At 30 September 2023
4,025,126
13
Subsidiaries

Details of the company's subsidiaries at 30 September 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Fifab Holdings Limited
1
Ordinary
100.00
-
Fife Fabrications Limited
1
Ordinary
-
100.00

Registered office addresses (all UK unless otherwise indicated):

1
29 Rutherford Road, Southfield Industrial Estate, Glenrothes, Fife, KY6 2RT
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 24 -
14
Stocks
Group
Company
2023
2023
£
£
Raw materials and consumables
165,291
-
Work in progress
193,722
-
Finished goods and goods for resale
297,839
-
0
656,852
-
15
Debtors
Group
Company
2023
2023
Amounts falling due within one year:
£
£
Trade debtors
1,495,602
-
0
Amounts owed by group undertakings
-
662,500
Other debtors
2,000
2,000
Prepayments and accrued income
4,991
-
0
1,502,593
664,500
16
Creditors: amounts falling due within one year
Group
Company
2023
2023
Notes
£
£
Bank loans
18
171,867
171,867
Obligations under finance leases
19
130,194
-
0
Trade creditors
978,282
-
0
Amounts owed to group undertakings
-
0
1,919,221
Corporation tax payable
312,584
-
0
Other taxation and social security
360,681
-
Other creditors
59,750
59,750
Accruals and deferred income
546,670
-
0
2,560,028
2,150,838
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 25 -
17
Creditors: amounts falling due after more than one year
Group
Company
2023
2023
Notes
£
£
Bank loans and overdrafts
18
1,100,012
1,100,012
Obligations under finance leases
19
43,281
-
0
Other borrowings
18
1,660,000
1,660,000
2,803,293
2,760,012
18
Loans and overdrafts
Group
Company
2023
2023
£
£
Bank loans
1,271,879
1,271,879
Other loans
1,660,000
1,660,000
2,931,879
2,931,879
Payable within one year
171,867
171,867
Payable after one year
2,760,012
2,760,012

The Royal Bank of Scotland Plc have a bond and floating charge over the assets of the company and standard securities over the property.

Loan notes with principal value of £1m were granted in the year to be repaid in a bullet repayment 60 months from grant date. The notes accrue interest on the principal of 3% above Bank of England base rate which is repaid annually.

 

Loan notes are secured by floating charge over the secured assets of the group.

19
Finance lease obligations
Group
Company
2023
2023
£
£
Future minimum lease payments due under finance leases:
Within one year
134,180
-
0
In two to five years
43,560
-
0
177,740
-
Less: future finance charges
(4,265)
-
0
173,475
-
0
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
19
Finance lease obligations
(Continued)
- 26 -

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 6 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Finance lease liabilities are secured over the assets they were used to acquire.

20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
2023
Group
£
Accelerated capital allowances
159,187
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the period:
£
£
Asset at 25 July 2022
-
-
Credit to profit or loss
(18,874)
-
Other
178,061
-
Liability at 30 September 2023
159,187
-
21
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
125,695

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

FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 27 -
22
Share capital
Group and company
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
A Ordinary of £1 each
1,300
1,300
B Ordinary of £1 each
700
700
2,000
2,000

The A Ordinary and B Ordinary shares rank pari passu and carry one vote per share. There are no restrictions on the distribution of dividends and the repayment of capital.

23
Acquisition of a business

On 2 February 2023 the group acquired 100 percent of the issued capital of Fifab Holdings Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
1,508,781
877,040
2,385,821
Inventories
666,353
-
666,353
Trade and other receivables
1,459,778
-
1,459,778
Cash and cash equivalents
2,888,878
-
2,888,878
Borrowings
(666,500)
-
(666,500)
Obligations under finance leases
(292,851)
-
(292,851)
Trade and other payables
(2,169,691)
-
(2,169,691)
Tax liabilities
(227,530)
-
(227,530)
Deferred tax
(149,666)
-
(149,666)
Total identifiable net assets
3,017,552
877,040
3,894,592
Goodwill
130,534
Total consideration
4,025,126
The consideration was satisfied by:
£
Cash
2,489,300
Issue of shares
700
Issue of loan notes
1,460,000
Transaction fees
75,126
4,025,126
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
23
Acquisition of a business
(Continued)
- 28 -
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
7,136,381
Profit after tax
1,024,461
24
Operating lease commitments
Lessee

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

Group
Company
2023
2023
£
£
Within one year
114,210
-
Between two and five years
224,250
-
338,460
-
25
Related party transactions
Transactions with related parties

During the period the group entered into the following transactions with related parties:

Sales
Purchases
2023
2023
£
£
Group
Other related parties
14,337
161,897

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
£
Group
Other related parties
4,032
FIFAB LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
25
Related party transactions
(Continued)
- 29 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
Balance
£
Group
Other related parties
8,056
26
Controlling party

The directors consider there to be no controlling party.

27
Cash generated from/(absorbed by) group operations
2023
£
Profit for the period after tax
1,024,461
Adjustments for:
Taxation charged
283,325
Finance costs
156,568
Investment income
(20,647)
Amortisation and impairment of intangible assets
8,702
Depreciation and impairment of tangible fixed assets
174,144
Movements in working capital:
Decrease in stocks
9,501
Increase in debtors
(42,815)
Decrease in creditors
(248,706)
Cash generated from/(absorbed by) operations
1,344,533
28
Analysis of changes in net debt - group
25 July 2022
Cash flows
30 September 2023
£
£
£
Cash at bank and in hand
-
1,959,047
1,959,047
Borrowings excluding overdrafts
-
(2,931,879)
(2,931,879)
Obligations under finance leases
-
(173,475)
(173,475)
-
(1,146,307)
(1,146,307)
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