Company Registration No. 12170514 (England and Wales)
Polytech Liquid Polymers Limited
Annual report and financial statements
for the year ended 31 December 2023
Polytech Liquid Polymers Limited
Company information
Directors
G J De-Maine
K Dranfield
C Nicholls
J P Robinson
(Appointed 24 November 2023)
Company number
12170514
Registered office
Nab Quarry, Long Lane
Pott Shrigley
Macclesfield
Cheshire
England
SK10 5SD
Independent auditor
Saffery LLP
Trinity
16 John Dalton Street
Manchester
M2 6HY
Polytech Liquid Polymers Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 26
Polytech Liquid Polymers Limited
Strategic report
For the year ended 31 December 2023
1
The directors present the strategic report for the period ended 31 December 2023.
Principal activities
The principal activities of the company are the development, manufacture and sale of polyurethane systems for adhesives, coatings and sealants applications. These are mainly used for sports and playground and safety surfaces, walkways and cycle paths, resin bound driveways, for industrial applications and for flexible packaging.
Business Review
The company’s accounts are for the twelve months ended 31 December 2023. The lower trading activity seen in the second half of 2022, caused by the challenges in both the UK and global economies, continued throughout much of 2023. Larger infrastructure projects were put on hold. Demand in the domestic market was depressed, impacted by high inflation and borrowing costs.
There are signs that lower inflation rates will be sustained in 2024 with economies both domestically and globally positioning to recover later in the year as central banks and governments tackle sluggish growth in their economies.
The company has engaged in a considerable number of sales activities during winter 2023. It is also bringing to the UK market other products from within the PLIXXENT group portfolio. These will effect a substantial improvement on the company’s performance in 2024.
The company considers its key performance indicators to be Turnover, Gross profit and adjusted EBITDA (being Operating Profit before deduction of interest, depreciation and amortisation and before group related charges):
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Adjusted EBITDA as a % of turnover | | |
Polytech Liquid Polymers Limited
Strategic report (continued)
For the year ended 31 December 2023
2
Risks and uncertainties
Market risk
The availability and pricing of raw materials, the continuing impact of high energy costs and inflation and high levels of interest rates globally continue to present challenges for the company.
The company works closely with its customers to meet these challenges, maintaining a competitive marketing pricing strategy. Operating costs are carefully controlled and working capital actively managed to ensure cash flow remains strong. Trade debtors are insured.
Liquidity risk
Liquidity risk is the that the company will not be able to meet its financial obligations as they fall due. The company had cash resources of £1,914k at 31 December 2023 and no bank borrowing or bank loans. The company is also able to rely on the continuing support of its ultimate parent company. The directors are satisfied that the company has sufficient liquidity to meet its current and future liabilities and working capital needs.
Credit risk
Credit risk is the risk of financial loss to the company arising principally from non-payment of trade receivables. The company actively manages its credit control procedures, ensuring that its policies are appropriate and fit for purpose. Additionally, the company insures a large proportion of its debt.
Foreign exchange risk
A significant portion of the company’s trading activities is in overseas markets, both export and import, and the company manages its exposure as far as possible by balancing its trade inflows and outflows in foreign currencies.
Research and development
The company continues to invest in research and development of its products and manufacturing processes. In doing this, the company can share, exchange and benefit from resources made available to it through PLIXXENT group.
Environmental actions
The company is committed through policies on reducing energy consumption, reprocessing of manufacturing generated scrap, waste recycling especially of packaging, etc. to minimising its impact on the environment. It is also working with suppliers and customers in finding ways to recycle waste products.
Future developments
The company is confident that its plans for growth will leave it well placed to take advantage of improving market conditions as the global economy gradually starts recovering in 2024 with inflation rates falling back from their peak.
There have been no events since the end of the financial period that materially affect the company.
C Nicholls
Director
27 March 2024
Polytech Liquid Polymers Limited
Directors' report
For the year ended 31 December 2023
3
The directors present their annual report and financial statements for the period ended 31 December 2023.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G J De-Maine
K Dranfield
C Nicholls
J P Robinson
(Appointed 24 November 2023)
Qualifying third party indemnity provisions
The company has granted an indemnity to the directors of the company against liability in respect of proceedings brought by third parties, subject to the conditions set out in Companies Act 2006, s.236. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors’ report.
Political donations
There have been no political donations or expenditure during the period ended December 2023 (2022: nil).
Financial instruments
The Company’s main financial instruments are cash and trade receivables. The Company does not use derivative financial instruments.
Auditor
Saffery LLP have expressed their willingness to continue in office.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.They are also responsible for safeguarding the assets of the company and hence for undertaking reasonable steps for the prevention and detection of fraud and other irregularities.
Polytech Liquid Polymers Limited
Directors' report (continued)
For the year ended 31 December 2023
4
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company’s strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors’ report. It has done so in respect of the fair view of the business, principal risks and uncertainties, development and performance and the key performance indicators.
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 to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
C Nicholls
Director
27 March 2024
Polytech Liquid Polymers Limited
Independent auditor's report
To the members of Polytech Liquid Polymers Limited
5
Opinion
We have audited the financial statements of Polytech Liquid Polymers Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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.
Polytech Liquid Polymers Limited
Independent auditor's report (continued)
To the members of Polytech Liquid Polymers Limited
6
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Polytech Liquid Polymers Limited
Independent auditor's report (continued)
To the members of Polytech Liquid Polymers Limited
7
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
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.
Polytech Liquid Polymers Limited
Independent auditor's report (continued)
To the members of Polytech Liquid Polymers Limited
8
Diane Petit-Laurent FCA
Senior Statutory Auditor
For and on behalf of Saffery LLP
27 March 2024
Chartered Accountants
Statutory Auditors
Trinity
16 John Dalton Street
Manchester
M2 6HY
Polytech Liquid Polymers Limited
Statement of comprehensive income
For the year ended 31 December 2023
9
Year
Period
ended
ended
31 December
31 December
2023
2022
as restated
Notes
£
£
Turnover
3
11,408,612
7,922,536
Cost of sales
(9,214,394)
(5,842,312)
Gross profit
2,194,218
2,080,224
Administrative expenses
(4,520,376)
(2,817,721)
Operating loss
4
(2,326,158)
(737,497)
Interest payable and similar expenses
7
(508,111)
(236,647)
Loss before taxation
(2,834,269)
(974,144)
Tax on loss
8
276,069
(101,593)
Loss for the financial year
(2,558,200)
(1,075,737)
The income statement has been prepared on the basis that all operations are continuing operations.
Polytech Liquid Polymers Limited
Statement of financial position
As at 31 December 2023
10
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
9
4,000,639
4,762,639
Tangible assets
10
1,513,780
1,797,722
5,514,419
6,560,361
Current assets
Stocks
11
1,878,590
2,594,215
Debtors
12
1,424,292
2,263,117
Cash at bank and in hand
1,913,723
2,591,484
5,216,605
7,448,816
Creditors: amounts falling due within one year
13
(7,966,871)
(9,634,068)
Net current liabilities
(2,750,266)
(2,185,252)
Total assets less current liabilities
2,764,153
4,375,109
Provisions for liabilities
Deferred tax liability
15
252,756
-
(252,756)
Net assets
2,764,153
4,122,353
Capital and reserves
Called up share capital
17
5,380,245
5,380,145
Share premium account
1,199,900
Profit and loss reserves
(3,815,992)
(1,257,792)
Total equity
2,764,153
4,122,353
The financial statements were approved by the board of directors and authorised for issue on 27 March 2024 and are signed on its behalf by:
C Nicholls
Director
Company Registration No. 12170514
Polytech Liquid Polymers Limited
Statement of changes in equity
For the year ended 31 December 2023
11
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
5,380,145
(182,055)
5,198,090
Period ended 31 December 2022:
Original loss for the period
-
-
(747,747)
(747,747)
Result of restatement
22
-
-
(327,990)
(327,990)
Balance at 31 December 2022 (restated)
5,380,145
(1,257,792)
4,122,353
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(2,558,200)
(2,558,200)
Issue of share capital
17
100
1,199,900
-
1,200,000
Balance at 31 December 2023
5,380,245
1,199,900
(3,815,992)
2,764,153
Polytech Liquid Polymers Limited
Notes to the financial statements
For the year ended 31 December 2023
12
1
Accounting policies
Company information
Polytech Liquid Polymers Limited is a private company limited by shares incorporated in England and Wales. The registered office is Nab Quarry, Long Lane, Pott Shrigley, Macclesfield, Cheshire, England, SK10 5SD.
1.1
Reporting period
For the previous period, the company shortened its reporting period to 31 December 2022 so that its reporting date was coterminous with the reporting date of its parent company. This resulted in the prior period representing a period of six months. The current period represents a period of twelve months and therefore the results are not entirely comparable.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of PLIXXENT Holding GmbH. These consolidated financial statements are available from its registered office, Gasstrasse 18 (Haus 5), 22761, Hamburg, Germany.
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
13
1.3
Going concern
Management continue to adopt the going concern basis to the preparation of the financial statements as it istrue confident of the company continuing operations into the foreseeable future. Management produce forecasts for the company that includes due consideration for contracted minimum revenues, continued operating losses and projected cash-burn of the company for a minimum period of at least twelve months from the date of approval of these financial statements.
The company is reliant on further support from its parent undertaking in order to continue trading for at least twelve months from the date of approval of these financial statements. The net current position and going concern basis is a result of confirmations from the Group who will support the company to settle liabilities as they fall due.
The parent company has pledged its support for at least the next twelve months. Therefore, the directors consider the going concern basis of preparation is appropriate.
1.4
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.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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 8 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.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
15% reducing balance
Fixtures and fittings
25% reducing balance
Computers
15% reducing balance
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, which is equivalent to net realisable value. 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.
1.9
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.
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
1.10
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets 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.
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value 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.
1.11
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.
1.12
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 income statement 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.
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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 statement of financial position 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.
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
18
2
Critical accounting 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.
Valuation of goodwill
Impairment of goodwill requires management to prepare discounted cash flows which involves making significant judgements and assumptions, including sales growth rates and interest rates. The senior management team prepare detailed budgets applying full consideration of customer and product development on a detailed customer and product level line by line basis. Interest rates assumed are a reflection of the interest rates charged by Plixxent Holding UK Limited with consideration of inflation.
Allowance for doubtful debts
The directors assess the doubtful debt allowance at each reporting date. Key assumptions applied are the estimated debt recovery rates and the future market conditions that could affect recovery. The carrying amount at the reporting date was £308,553 (2022: £176,442).
Valuation of stock
Management perform a specific review on stock where there is no realistic prospect of selling it. Management have written down the value of stock held in South Africa, making key assumptions with regards to the stock's useful life and selling price overseas. The carrying amount at the reporting date was £61,245 (2022: £294,640).
3
Turnover
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
7,659,539
5,821,121
Europe
1,725,293
881,379
Rest of World
2,023,780
1,220,036
11,408,612
7,922,536
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
19
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(110,290)
270,835
Fees payable to the company's auditor for the audit of the company's financial statements
31,925
33,500
Fees payable for non audit services
5,450
4,450
Depreciation of owned tangible fixed assets
303,622
217,096
Amortisation of intangible assets
762,000
381,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
32
32
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,504,123
730,232
Social security costs
166,183
81,634
Pension costs
56,528
21,785
1,726,834
833,651
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
305,031
121,861
Company pension contributions to defined contribution schemes
8,127
3,650
313,158
125,511
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
6
Directors' remuneration (continued)
20
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
109,244
-
Company pension contributions to defined contribution schemes
2,928
-
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
507,158
233,788
Interest on finance leases and hire purchase contracts
953
2,859
508,111
236,647
8
Taxation
2023
2022
as restated
£
£
Current tax
Adjustments in respect of prior periods
(23,313)
1,619
Deferred tax
Origination and reversal of timing differences
(252,756)
99,974
Total tax (credit)/charge
(276,069)
101,593
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
8
Taxation (continued)
21
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(2,834,269)
(974,144)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(666,053)
(185,087)
Tax effect of expenses that are not deductible in determining taxable profit
11,018
16,752
Tax effect of utilisation of tax losses not previously recognised
2,976
Adjustments in respect of prior years
(10,083)
239,034
Deferred tax adjustments in respect of prior years
1,619
Permanent fixed asset differences
178,884
67,433
Remeasurement of deferred tax for changes in tax rates
(29,010)
(38,158)
Movement in deferred tax not recognised
236,199
Taxation (credit)/charge for the year
(276,069)
101,593
The accounts have been restated to adjust for the previous incorrect recognition of a deferred tax asset. The change has resulted in profits available for distribution at 31 December 2022 decreasing after tax by £327,990.
9
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
6,096,139
Amortisation and impairment
At 1 January 2023
1,333,500
Amortisation charged for the year
762,000
At 31 December 2023
2,095,500
Carrying amount
At 31 December 2023
4,000,639
At 31 December 2022
4,762,639
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
2,542,169
5,568
91,410
2,639,147
Additions
19,680
19,680
Disposals
(148,070)
(148,070)
At 31 December 2023
2,413,779
5,568
91,410
2,510,757
Depreciation and impairment
At 1 January 2023
824,953
2,218
14,254
841,425
Depreciation charged in the year
291,212
837
11,573
303,622
Eliminated in respect of disposals
(148,070)
(148,070)
At 31 December 2023
968,095
3,055
25,827
996,977
Carrying amount
At 31 December 2023
1,445,684
2,513
65,583
1,513,780
At 31 December 2022
1,717,216
3,350
77,156
1,797,722
11
Stocks
2023
2022
£
£
Raw materials and consumables
955,547
1,011,227
Finished goods and goods for resale
923,043
1,582,988
1,878,590
2,594,215
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,222,994
2,168,120
Corporation tax recoverable
23,171
44,147
Amounts owed by group undertakings
90,151
Other debtors
39,812
3,933
Prepayments and accrued income
48,164
46,917
1,424,292
2,263,117
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
23
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
14
13,000
Trade creditors
771,715
1,652,252
Amounts owed to group undertakings
6,989,300
7,459,639
Taxation and social security
42,283
91,110
Other creditors
8,623
118,642
Accruals and deferred income
154,950
299,425
7,966,871
9,634,068
Glas Trust Corporation Limited hold fixed and floating charges over the assets of the company as security agent.
14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
13,000
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Prior year leases included purchase options at the end of the lease period, and no restrictions were placed on the use of the assets. The average lease term was 3 years. All leases were on a fixed repayment basis and no arrangements were entered into for contingent rental payments. There are no future minimum finance lease payments due as at the year end.
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
as restated
Balances:
£
£
Fixed asset timing differences
(311,231)
367,462
Losses and other deductions
310,053
(114,706)
Short term timing differences
1,178
-
-
252,756
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
15
Deferred taxation (continued)
24
2023
Movements in the year:
£
Liability at 1 January 2023
252,756
Credit to profit or loss
(252,756)
Liability at 31 December 2023
-
The deferred tax credit set out above is not expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
The deferred tax liability is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period. The deferred tax asset is not expected to reverse within the next 12 months.
The accounts have been restated to adjust for the previous incorrect recognition of a deferred tax asset. The change has resulted in profits available for distribution at 31 December 2022 decreasing after tax by £327,990.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,528
21,785
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
5,380,245
5,380,145
5,380,245
5,380,145
During the period, 100 £1 Ordinary shares were allotted. Consideration of £12,000 was received per share allotted with amounts in excess of par value allocated to the share premium account.
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
25
18
Operating lease commitments
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
49,362
67,717
Between two and five years
61,539
55,972
110,901
123,689
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
84,064
There were no amounts contracted for but not provided as at 31 December 2023.
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Income
Payments
2023
2022
2023
2022
£
£
£
£
Group management charges
-
-
628,300
394,760
Intercompany purchases
-
-
278,404
12,443
Intercompany sales
228,444
-
-
-
Interest expenses on loan by parent undertaking
-
-
507,016
231,414
Balances with related parties
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£
£
£
£
Amounts owed by/to related parties
90,151
-
6,989,300
-
Polytech Liquid Polymers Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
26
21
Ultimate controlling party
The immediate parent is Plixxent Holding UK Limited and the ultimate controlling party is PLIXXENT Holding GmbH. The relationship is as a subsidiary of the Global group of PLIXXENT.
The smallest and largest group in which the results of the company are consolidated is that headed by PLIXXENT Holding GmbH, incorporated in Germany. The consolidated financial statements of this group are available to the public and may be obtained from Gasstrasse 18 (Haus 5), 22761 Hamburg, Germany.
22
Prior period adjustment
Reconciliation of changes in equity
1 July
31 December
2022
2022
£
£
Adjustments to prior year
Deferred tax asset derecognition
-
(327,990)
Equity as previously reported
5,198,090
4,450,343
Equity as adjusted
5,198,090
4,122,353
Analysis of the effect upon equity
Profit and loss reserves
-
(327,990)
Reconciliation of changes in loss for the previous financial period
2022
£
Adjustments to prior year
Total adjustments
(327,990)
Loss as previously reported
(747,747)
Loss as adjusted
(1,075,737)
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