Company registration number 02429938 (England and Wales)
Somfy Limited
Annual Report And Financial Statements
For The Year Ended 31 December 2023
SOMFY LIMITED
Somfy Limited
COMPANY INFORMATION
Directors
Mr S Montgomery
Mr S Van Witzenburg
Secretary
Mr L Fox
Company number
02429938
Registered office
Unit 7 Lancaster Way
Airport West
Yeadon
LS19 7ZA
Auditor
Constantin
25 Hosier Lane
London
United Kingdom
EC1A 9LQ
Bankers
BNP Paribas
10 Harewood Avenue
London
NW1 6AA
SOMFY LIMITED
Somfy Limited
CONTENTS
Page
Strategic report
1 - 7
Directors' report
8 - 9
Directors' responsibilities statement
10
Independent auditor's report
11 - 13
Profit and loss account
14
Statement of comprehensive income
15
Balance sheet
16
Statement of changes in equity
17
Notes to the financial statements
18 - 29
SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Description of Group Activities

SOMFY designs, assembles and distributes motors and automated devices (remote controls and sensors) as well as smart systems which control their operation. SOMFY ‘s main manufacturing activity is the assembly of subunits and parts designed by it but produced by subcontractor partners. The R&D activity’s role is to anticipate peoples’ new habits and needs in relation to homes and buildings, to design the corresponding solutions, guarantee the performance and compatibility of products from the same brand and ensure their interoperability with other brands in the field of connected homes and buildings. SOMFY controls its distribution (international supply chain, local sales and marketing presence), which means SOMFY can deliver its products worldwide. Its customers are manufacturers and installers, who integrate SOMFY solutions into carrier products: blinds, shutters, doors and gates, or by replacing existing equipment in buildings, by leveraging the strength of the Group’s brands. SOMFY also distributes finished products (a selection of motors and control panels, connected objects, digital applications) that are sold by prescribers, networks, retailer installers or resellers, via large specialist and DIY stores, and online, either directly or indirectly. SOMFY products are installed indiscriminately in individual homes, small businesses, apartment blocks, office blocks, hotels and collective residences.

Executive Summary

Somfy Ltd experienced a normalisation during the financial year in 2023, with a decline in turnover and profit compared to the previous year. The company reported a turnover of £18,583,101, a decrease from £19,479,124 in 2022, and a net profit of £1,234,664, down from £1,718,934. The main markets in which Somfy Ltd operates have been subject to varied performance in the last three years in line with the volatile conditions set forth by the exit from the COVID-19 pandemic. During 2023, the results of inflationary impacts led to decreased demand in the key growth markets for Somfy Ltd. Combining this with the fact that key customers across all markets started to reduce the significant stocks they had built up in the wake of global supply challenges in recent years, resulted in the decreased revenue and profit for Somfy Ltd.

Company Overview

Somfy Ltd is engaged in the sale and distribution of motors and controls for the window and door industry. The company operates within a highly competitive sector, and has established itself as a key player in the UK market. Its strategic focus remains on leveraging technology and improving supply chain efficiencies to enhance customer satisfaction and market share.

Somfy Ltd operates strongly in the residential access channel and motorisation of window fashion treatments.

 

Financial Performance Analysis

Revenue Analysis:

The company's revenue decreased by 4.6% year-over-year, primarily due to a reduced demand in the post-pandemic economic environment and competitive pressures. The decrease reflects a normalisation of sales levels after the heightened demand during the COVID-19 pandemic. Customer reduction of stock also contributed to the reduction in sales.

Profitability Analysis:

Profit before taxation saw a decrease to £1,622,490 in 2023 from £2,130,105 in 2022. The net profit also decreased, which can be attributed to increased administrative expenses and a challenging economic environment, influenced by inflation and global supply chain disruptions.

SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Expense Analysis:

Administrative expenses increased significantly, from £4,518,325 in 2022 to £6,066,118 in 2023. This rise is mainly due to increased labour costs and heightened operational costs linked to inflationary pressures.

 

Financial Position

Balance Sheet Review:

The total assets decreased from £2,503,034 in 2022 to £1,732,898 in 2023. The reduction in net assets is largely a result of increased dividend payments and higher administrative expenses. The company’s equity also decreased accordingly, reflecting a reduction in retained earnings after dividend distributions.

Capital Structure and Liquidity Analysis:

Somfy Ltd maintained a solid capital structure with an equity ratio consistent with the previous year, despite financial pressures. The company’s approach to managing liquidity has been cautious, focusing on maintaining sufficient cash flows to support operations and strategic investments.

Financial KPIs

1. Revenue and Profitability

2. Gross Margin and Operating Margin

3. Liquidity Ratios

Current Ratio: The current ratio of Somfy Ltd for the year ended December 31, 2023, is approximately 1.37. This, combined with company cash pooling policy process, ensures that the company is in a strong position to cover its short-term obligations.

Non-financial KPIs

1. Customer Satisfaction

SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

2. Environmental Impact

3. Employee Health, Safety, Wellbeing & Sense of Purpose

KPI Analysis

Combining financial and non-financial KPIs provides a holistic view of Somfy Ltd's operational, environmental, and financial health. While the financial data may show a contraction in profitability, non-financial metrics like high customer satisfaction scores and improvements in environmental impact suggest strong long-term potential and continued brand loyalty for the company. The management team continues to use a wide assortment of KPIs to deliver performance and strategy for the business.

 

Risk Analysis

The strategic report identifies several external risks including geopolitical tensions in Eastern Europe & the Middle East affecting energy prices and global inflationary trends. Financial risk management strategies have been focused on diversifying supply chains and hedging against currency fluctuations to manage costs effectively.

Geopolitical Unrest in Eastern Europe & Middle East.

The ongoing conflicts in Europe & the Middle East presents limited risk to the operations of Somfy Ltd. There are no significant suppliers in Ukraine or Israel. However, the effects on energy pricing levels as a result have manifested in downstream price increases in various areas of the supply chain. The risk to shipping in the Suez Canal and surrounding area continues to present a situation which requires close monitoring with a potential impact on shipping costs and lead times.

We continue to feel the impacts of an increased cost base, driven by rising costs in production during 2022 and 2023.

Whilst further impacts cannot be discounted if there is further escalation in the conflicts, the current status indicates stability in the impacts experienced by Somfy Ltd.

Inflationary and Interest Rate Impacts

The conflicts abroad combined with other factors had resulted in significant increases in inflation and interest rates, we now see reduction in inflation but still experiencing interest rates at their peak. With the prospective customer of Somfy Ltd, and its customers later in the demand chain, being impacted by household disposable income and the current economic climate, 2023 has seen an initial impact on sales as a result of these factors.

SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

Environmental Objectives

SOMFY has made sustainable development a key element of its strategy and its Ambition 2030. By inspiring better living environments accessible to all, SOMFY is bringing well-being, safety and energy savings to its customers. Through connected products and services, users benefit from features that simplify their everyday lives, ensure the active monitoring of goods and people, while optimising the thermal and light contribution of solar energy.

SOMFY’s vision - “Inspiring a better way of living accessible to all” - serves the Group’s sustainable development trajectory, which is being built step by step: every day, the Group reduces the impact of its activities and products on the environment, cares about the daily lives and future of its employees, and maintains quality relationships with its partners and local communities. SOMFY’s sustainable development policy is the foundation of its sustainable growth. It is part of the Group’s Ambition 2030, through the implementation of its corporate responsibility and societal commitment, and is structured around three pillars: Planet, People and Prosperity.

Planet

SOMFY is reducing its environmental impact to help protect the planet and respond to the climate emergency. The Group’s solutions are accessible to all, improve the energy performance of buildings and contribute to the well-being of their occupants.

People

SOMFY strives on a daily basis to provide its employees with a fulfilling work environment that is also fair and inclusive. The Group also wants to take care of their sustainable employability by developing their skills.

Prosperity

SOMFY believes that value creation depends first and foremost on the mobilisation of all. For all of its stakeholders, the Group implements co-building approaches and respectful and ethical practices to start anew every day and create the trust that is essential to its future prosperity. The key themes of this sustainable development policy have been ratified by the Sustainable Development Committee of SOMFY’s Board of Directors: – Planet pillar: rolling out a low-carbon strategy by reducing the Group’s emissions and developing solutions that help avoid greenhouse gas emissions in buildings. In addition to carbon, SOMFY is broadening its scope of action and is committed to preserving biodiversity and promoting circular economy; – People pillar: ensuring the sustainable employability of its employees in a work environment that fosters performance and the development of inclusive teams; – Prosperity pillar: for sustainable growth, respecting all industry participants through ethical business practices that comply with product standards and GDPR requirements, involving suppliers in a responsible purchasing approach, and aiming for customer satisfaction.

Somfy Ltd contributed, for the first time in 2023, to collection of carbon footprint data which was audited by Science Based Targets. On going data collection will take place in 2024 with the ability to have comparative results in 2025.

Outlook and Strategic Focus

The outlook for Somfy Ltd remains cautiously optimistic, with strategic focus on expanding digital sales platforms to enhance customer reach and improving stock management to align with changing market demands. The company plans to continue its investment in marketing and new product development to drive revenue growth.

Somfy Ltd continues to maintain a platform for growth in the people, product, and strategy for the UK & Ireland. Supported by significant research and development functions at group level, Somfy Ltd will be well supported in bringing innovations to the market in the coming year. Combined with other strategic opportunities brings the management to the conclusion that cautious optimism in low growth is achievable in the coming year.

SOMFY LIMITED
Somfy Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -

Conclusion

Despite the challenges faced in 2023, Somfy Ltd has maintained a robust strategic position with clear focus on operational efficiency and market expansion. The strategic initiatives aimed at digital transformation and market diversification are expected to strengthen the company’s market position and improve financial performance in the coming years.

 

 

 

On behalf of the board

Mr S Montgomery
Director
30 April 2024
SOMFY LIMITED
Somfy Limited
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the sale and distribution of wholesale household electrical goods.

Results and dividends

The results for the year are set out on page 14.

The company paid dividends in the year in the amount of £2,000,000 (2022: £1,000,000).

 

Financial risk management objectives and policies

The Company’s activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk.

Credit risk

The Company’s principal financial assets are bank balances and cash and trade and other receivables.

The Company’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

The Company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Company uses a mixture of long-term and short-term debt finance.

Further details regarding liquidity risk can be found in the Statement of accounting policies in the financial statements.

Directors

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

Mr S Montgomery
Mr S Van Witzenburg
Auditor

The auditor, Constantin, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

SOMFY LIMITED
Somfy Limited
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Managing Director Comments

 

Geopolitical Unrest in Eastern Europe

The ongoing conflict in Europe presents limited risk to the operations of Somfy Ltd. There are no significant suppliers in Ukraine. However, the effects on energy pricing levels as a result have manifested in downstream prices increases in various areas of the supply chain. In 2023, increases in trade pricing has reflected those impacts and further increases cannot be ruled out in the short to medium term.

Whilst further impacts cannot be discounted if there is further escalation in the conflicts, the current status indicates stability in the impacts experienced by Somfy Ltd.

Inflationary Impacts

The conflict in Ukraine combined with other factors has resulted in significant increases in inflation and interest rates. Whilst the prospective customer of Somfy Ltd and its customers later in the demand chain are impacted by household disposable income and the current economic climate, 2023 has seem limited impact on sales as a result of these factors to date.

The current level of interest rates causes concern whilst homeowners face expiring mortgage rate deals in the course of the next year. The management team continue to monitor these impacts and the relation to sales.

On behalf of the board
Mr S Montgomery
Director
30 April 2024
SOMFY LIMITED
Somfy Limited
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -

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) The Financial Reporting Standard applicable in the UK and Republic of Ireland. 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:

 

 

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.

SOMFY LIMITED
Somfy Limited
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOMFY LIMITED
- 11 -

Opinion

In our opinion the financial statements:

 

We have audited the financial statements which comprise:

 

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).

 

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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 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.

SOMFY LIMITED
Somfy Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOMFY LIMITED
- 12 -
Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

 

Auditor's responsibilities for the audit of the financial statements

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

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

 

We considered the nature of the company’s industry and its control environment, and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company’s business sector.

 

We obtained an understanding of the legal and regulatory framework that the company operates in, and identified the key laws and regulations that:

 

We discussed among the audit engagement team including relevant internal specialists such as tax specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

 

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

SOMFY LIMITED
Somfy Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOMFY LIMITED
- 13 -

Opinions on other matters prescribed by the Companies Act 2006

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

 

In the light of the knowledge and understanding of the companyand its environment obtained in the course of the audit, we have not identified any material misstatements in the directors' report.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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:

 

We have nothing to report in respect of these matters.

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.

Thierry de Gennes ACA (Senior Statutory Auditor)
For and on behalf of Constantin
30 April 2024
Chartered Accountants and Statutory Auditor
25 Hosier Lane
London
EC1A 9LQ
SOMFY LIMITED
Somfy Limited
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
Turnover
3
18,583,101
19,479,124
Cost of sales
(11,021,825)
(12,852,488)
Gross profit
7,561,276
6,626,636
Administrative expenses
(6,066,118)
(4,518,325)
Other operating income
-
0
321
Operating profit
4
1,495,158
2,108,632
Interest receivable and similar income
7
127,332
24,898
Interest payable and similar expenses
-
0
(3,425)
Profit before taxation
1,622,490
2,130,105
Tax on profit
8
(387,826)
(411,171)
Profit for the financial year
1,234,664
1,718,934

The notes on pages 18 to 29 form part of these financial statements.

SOMFY LIMITED
Somfy Limited
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2023
2022
£
£
Profit for the year
1,234,664
1,718,934
Other comprehensive income
-
-
Total comprehensive income for the year
1,234,664
1,718,934

The notes on pages 18 to 29 form part of these financial statements.

SOMFY LIMITED
Somfy Limited
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 16 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
39,003
59,123
Current assets
Stocks
11
8,959
41,705
Debtors
12
6,222,370
5,513,509
Cash at bank and in hand
-
0
399
6,231,329
5,555,613
Creditors: amounts falling due within one year
13
(4,537,434)
(3,111,702)
Net current assets
1,693,895
2,443,911
Total assets less current liabilities
1,732,898
2,503,034
Provisions for liabilities
Deferred tax liability
14
9,000
13,800
(9,000)
(13,800)
Net assets
1,723,898
2,489,234
Capital and reserves
Called up share capital
16
100,000
100,000
Profit and loss reserves
1,623,898
2,389,234
Total equity
1,723,898
2,489,234

The notes on pages 18 to 29 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 30 April 2024 and are signed on its behalf by:
Mr S Montgomery
Director
Company Registration No. 02429938
SOMFY LIMITED
Somfy Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
100,000
1,670,300
1,770,300
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,718,934
1,718,934
Dividends
9
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
100,000
2,389,234
2,489,234
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
1,234,664
1,234,664
Dividends
9
-
(2,000,000)
(2,000,000)
Balance at 31 December 2023
100,000
1,623,898
1,723,898

The notes on pages 18 to 29 form part of these financial statements.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
1
Accounting policies
Company information

Somfy Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7 Lancaster Way, Airport West, Yeadon, West Yorkshire, LS19 7ZA.

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 £1.

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

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for 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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
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:

Leasehold land and buildings
10 years straight line
Fixtures and fittings
3-5 years 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 credited or charged to profit or loss.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.

1.6
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.

1.7
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.

1.8
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.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

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.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
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.

1.10
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.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.11
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.

1.12
Retirement benefits

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

1.13
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 leases asset are consumed.

1.14
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.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
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.

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.

Depreciation

The depreciation policies have been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £36,347 (2022 - £35,619) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.

Stock provision

Inventories 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 judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.

Bad debt provision

Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and therefore are able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Business to business
18,583,101
19,479,124
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
18,583,101
19,479,124
SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
16,660
(13,758)
Fees payable to the company's auditor for the audit of the company's financial statements
19,300
17,550
Depreciation of owned tangible fixed assets
36,347
35,619
(Profit)/loss on disposal of tangible fixed assets
-
944
Operating lease charges
114,651
117,186
5
Employees

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

2023
2022
Number
Number
27
25

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,581,995
1,378,443
Social security costs
185,028
163,671
Pension costs
75,839
67,271
1,842,862
1,609,385
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
146,149
131,976
Company pension contributions to defined contribution schemes
10,604
10,197
156,753
142,173

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
127,332
24,898
SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
391,314
406,204
Adjustments in respect of prior periods
1,312
-
0
Total current tax
392,626
406,204
Deferred tax
Origination and reversal of timing differences
(4,800)
4,967
Total tax charge
387,826
411,171

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,622,490
2,130,105
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
381,285
404,720
Tax effect of expenses that are not deductible in determining taxable profit
18,696
4,901
Adjustments in respect of prior years
1,312
-
0
Effect of change in corporation tax rate
(17,038)
1,550
Under/(over) provided in prior years
3,571
-
0
Taxation charge for the year
387,826
411,171
9
Dividends
2023
2022
£
£
Interim paid
2,000,000
1,000,000
SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
10
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
29,204
179,635
208,839
Additions
6,911
9,316
16,227
Disposals
-
0
(11,180)
(11,180)
At 31 December 2023
36,115
177,771
213,886
Depreciation and impairment
At 1 January 2023
14,588
135,128
149,716
Depreciation charged in the year
3,915
32,432
36,347
Eliminated in respect of disposals
-
0
(11,180)
(11,180)
At 31 December 2023
18,503
156,380
174,883
Carrying amount
At 31 December 2023
17,612
21,391
39,003
At 31 December 2022
14,616
44,507
59,123
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
8,959
41,705
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,805,092
2,799,029
Corporation tax recoverable
-
0
120,108
Amounts owed by group undertakings
4,261,143
2,324,190
Other debtors
47,755
21,001
Prepayments and accrued income
108,380
249,181
6,222,370
5,513,509
SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
3,425,386
2,192,433
Amounts owed to group undertakings
22
-
0
Corporation tax
85,271
-
0
Other taxation and social security
509,511
399,485
Other creditors
322,397
321,991
Accruals and deferred income
194,847
197,793
4,537,434
3,111,702
14
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
9,000
13,800
2023
Movements in the year:
£
Liability at 1 January 2023
13,800
Credit to profit or loss
(4,800)
Liability at 31 December 2023
9,000

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
75,839
67,271

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.

SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
17
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
177,358
110,210
Between two and five years
305,335
321,490
482,693
431,700
18
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Income
Expenses
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
93,707
108,225
2,337,272
1,179,932
Other related parties
794,832
676,466
13,018,192
13,533,713
2023
2022
Amounts due to related parties
£
£
Other related parties
3,373,089
1,913,345

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
4,261,143
2,324,190
Other related parties
62,368
153,989
SOMFY LIMITED
Somfy Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
19
Ultimate controlling party

The company's immediate and ultimate parent company is Somfy SA, a company incorporated in France which has a registered address of 50 Avenue du Nouveau Monde, 74300 Cluses, France.

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