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Registration number: 01737942

SFS Group Fastening Technology Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

SFS Group Fastening Technology Limited

Contents

Strategic Report

1 to 2

Directors' Report

3 to 5

Statement of Directors' Responsibilities

6

Independent Auditor's Report

7 to 10

Profit and Loss Account

11

Statement of Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15 to 29

 

SFS Group Fastening Technology Limited

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is the manufacture and distribution of fastening systems in the UK and the Republic of Ireland and supply of related products to other group companies throughout Europe.

Fair review of the business

2023 saw reasonable growth of the business as its end markets returned to normal levels with all segments of the business continuing to perform well. The directors are pleased with the performance of them measured in terms of both turnover and profitability.

Going concern
The economic situation that the company has faced in the last twelve months remains stable although uncertainties remain regarding inflationary pressures and the general economic situation. The automotive sector which the company supplies has returned towards pre-pandemic levels whilst the construction sector remains stable. In response to the conditions of the markets, the directors have carefully considered these risks and the extent to which they might affect the preparation of the financial statements on a going concern basis. The directors have considered the short and medium term prospects of the markets it supplies and have considered in detail the company’s forecast performance, including its cash reserves. On this basis, the directors are confident that the company will continue in operational existence for the foreseeable future. Accordingly, the directors of the company have adopted the going concern basis in preparing these financial statements.

The company relies on monthly management accounts to define the key indicators of performance, these are growth in sales, movements in gross margin and operating profit. In the last trading year, the volatility in raw material and other costs has stabilised although costs remain higher than historical levels. In the last year as an example, our regular tracking of key performance indicators allowed the business to ensure that costs movements are fully understood and the impact on the business is measured, with corrective action taken as appropriate to manage the impact on gross margin and profitability. In addition, the business also uses industry published reports to understand both the movement of the market aligned to key target sectors of interest and economic forecasts. Additional indicators are in place to cover carbon emissions, labour productivity and detailed turnover by business area and the directors also measure the business against short-term, evolving goals.

The company's directors believe that further key performance indicators for the company are not necessary or appropriate for an understanding of the development, performance or position of the business, and that the ones identified are the key indicators that are used by the Board to monitor the company's performance.

 

SFS Group Fastening Technology Limited

Strategic Report for the Year Ended 31 December 2023

Strategic Plans

The company actively engages in strategic planning on an annual basis and produces a longer term plan every three years. These plans are used to drive the development of the business and the performance of the business is measured against these.

As a key part of these plans, it is the company's aim to develop long term business relationships with employees, customers and suppliers built upon principles of openness, honesty, trust and mutual respect. Employee surveys are carried out on a regular basis to ascertain satisfaction and engagement with the company and are benchmarked against similar organisations both within the group and externally. Relationships with key customers and suppliers have proved to be durable and longstanding. The company also engages with the wider community and has relationships with local schools and colleges which we use to introduce students to the work world and to provide mentoring.

Environmental considerations have become increasingly important to the company in recent years and investments have been made in energy efficient lighting and heating and electric car charging points to reduce the company's carbon footprint with further investments planned. The company is also transitioning to low emission vehicles with either full electric or plug-in hybrid vehicles becoming the standard. Initiatives have also been taken to reduce and eliminate wastage with a zero to landfill policy being introduced.

The business conduct of the company and all employees is of the utmost importance and all employees have received training in anti-corruption and personal integrity followed by regular updates at employee communication sessions. A key part of this training also points to the duty of all employees to treat everybody equally and fairly.
 

Principal risks and uncertainties

The principal risk facing the business is the uncertainty surrounding the economic environment in both the UK and European end markets. The directors believe that with the actions already taken and risks identified with the company's business planning processes that the company is well placed to meet them.

The business' principal financial instruments comprise bank balances, bank overdrafts, trade debtors, trade creditors and loans to the business. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of group loans. All of the business' cash balances are held in such a way that achieves a competitive rate of interest. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors. Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

The company makes sales and purchases in sterling and other currencies. There is a net outflow of currency funds principally in US Dollars and Euro. The foreign exchange risk is managed through FX hedging where appropriate.

Approved and authorised by the Board on 24 January 2024 and signed on its behalf by:
 

.........................................
U Langenauer
Director

.........................................
A Blank
Director

 

SFS Group Fastening Technology Limited

Directors' Report for the Year Ended 31 December 2023

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

Directors of the company

The directors who held office during the year were as follows:

U Langenauer

A Blank (resigned 13 March 2024)

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Approved by the Board on 24 January 2024 and signed on its behalf by:

.........................................
U Langenauer
Director

 

SFS Group Fastening Technology Limited

Directors' Report for the Year Ended 31 December 2023

Emissions and energy consumption

Summary of greenhouse gas emissions and energy consumption for the year ended 31 December 2023:

Name and description

Unit of measurement

 

2023

2022

Consumption of fuel for the purpose of transport

tCO2e

151

167

Purchase of electricity for its own use

tCO2e

499

466

Consumption of fuel for the purpose of transport

kWh

644,264

698,706

Purchase of electricity for its own use

kWh

2,662,811

2,407,703

Carbon intensity metric ratio per full time employee (FTE)

tCO2e per FTE

5

5

       

Emissions and energy consumption methodologies

All SFS Group Fastening Technology’s electricity and gas invoices have been entered into a fully managed energy database up to 31st December 2023, and data quality checks have been carried out for data completeness and accuracy. All transport information has also been entered into the energy database up to 31st December 2023.

This report (including the Scope 1, 2 and 3 consumption and CO2e emissions data) has been developed and calculated using the GHG Protocol - A Corporate Accounting and Reporting Standard (World Resources Institute and World Business Council for Sustainable Development, 2004); Greenhouse Gas Protocol - Scope 2 Guidance (World Resources Institute, 2015); ISO 14064-1 and ISO 14064-2 (ISO, 2018; ISO, 2019); Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance (HM Government, 2019).

Government Emissions Factor Database 2023 version 1.1 has been used, utilising the published kWh gross calorific value (CV) and kgCO2e emissions factors relevant for the reporting period 01/01/2023 - 31/12/2023.

Estimations were undertaken to cover missing billing periods for properties directly invoiced to SFS Group Fastening Technology Limited. These were calculated on a kWh/day pro-rata basis at the meter level.

All estimations equated to 2.59% of reported consumption.

Market-based emissions are 0 tCO2 for both suppliers, Shell Energy and Bryt Energy are zero. Shell Energy advise the supply contracts are certified by Renewable Energy Guarantees of Origin (REGOs), which guarantees that for every unit of electricity used, a unit of renewable electricity is put into the grid by renewable generators in the UK and their total emissions are 0 gCO2 / kWh. . Bryt Energy confirm their fuel mix is 100% renewables (76.4% wind, 21.2% solar and 2.4% hydro) with their carbon emissions also 0 gCO2 / kWh.

A total of 255,440 kWh was produced from Solar PV at the Leeds site.

** Scope 2 transport emissions have been restated for FY22 to be consistent with the methodology applied for this reporting period.

Intensity metrics have been calculated using total tCO2e figures and the selected performance indicator agreed with SFS Group Fastening Technology Limited for the relevant report period:

Full time equivalents (FTE) FY2023 (FY2022) - 166 (2022 - 166).

 

SFS Group Fastening Technology Limited

Directors' Report for the Year Ended 31 December 2023

Energy efficiency measures ongoing and undertaken in 2023

3 projects were successfully implemented at the Leeds site:

Solar PV system
A 307kWp solar PV system has been installed. This can generate 270,000 kWh per year, with 255,440 kWh generated in FY2023.

Circuit Level Monitoring
Installation began of a circuit-level monitoring system. This allows a better understanding of where to make efficiency savings in the future through optimisation.

Reduction of factory heating
Factory heating has been reduced by 2°C. Gas usage, in turn, has been reduced.

1 project successfully implemented at the Keighley site:

LED lighting
LED units have been installed for all lighting in the warehouse. This reduces the consumption by circa 41,000 kWh per annum.

Energy efficiency measures prioritised for implementation in 2024

Alternate fuel solutions
SFS Group are exploring the viability of alternate solutions for energy generation and heating. This includes inspecting the possibility of utilising ground or air-source heat pumps to heat their facilities.

At the Leeds site:
Optimisation through Circuit Level Monitoring
Using the Circuit Level Monitoring system installed in FY2023, SFS Group will be able to further use the more granular data analysis to optimise energy usage.

At the Keighley site:
Oil pumped directly into machines
This should improve efficiency and although savings are unquantifiable yet, it should lead to savings in both time and energy.

Air monitoring system
The implementation of an improved air monitoring system will reduce energy consumption and lead to savings.

 

SFS Group Fastening Technology Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

 

SFS Group Fastening Technology Limited

Independent Auditor's Report to the Members of SFS Group Fastening Technology Limited

Opinion

We have audited the financial statements of SFS Group Fastening Technology Limited (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of 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 profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for 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 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

In our evaluation of the director's going concern assessment, we considered the inherent risks to the company's business model and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.

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 original financial statements were 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 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

SFS Group Fastening Technology Limited

Independent Auditor's Report to the Members of SFS Group Fastening Technology Limited

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

We have nothing to report in respect of the following matters where 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 directors' 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 Statement of Directors' Responsibilities [set out on page 6], 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 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.

 

SFS Group Fastening Technology Limited

Independent Auditor's Report to the Members of SFS Group Fastening Technology Limited

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.

In planning and designing our audit tests, we identify and assess the risks of material misstatement within the financial statements, whether due to fraud or error. Our assessment of these risks includes consideration of the nature of the industry and sector, the control environment and the business performance along with the results of our enquiries of management, about their own identification and assessment of the risks of irregularities. We are also required to perform specific procedures to respond to the risk of management override.

Following this assessment we considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud in evaluating the stock and trade debtors.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the company operates, to enable us to identify the key laws and regulations applicable to the company. We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation.

We then performed audit procedures after consideration of the above risks which included the following:

reviewing correspondence with HMRC, and the company’s legal advisors;

obtaining a detailed understanding of the methodology adopted by management and the key assumptions underpinning the calculation of stock and bad debt provisions;

performing a retrospective review of the previous two years’ stock provisions to consider the appropriateness of management’s estimate in the two previous years, aiding the consideration of the used to consider the suitability of the methodology for the current year;

evaluating the consistency of the methodology used to calculate stock and bad debt provisions against that applied in prior periods;

enquiring of management concerning actual and potential litigation and claims;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

reading minutes of meetings of those charged with governance; and

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

All engagement team members were informed of the relevant laws and regulations and potential fraud risks at the planning stage and reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify such items.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

 

SFS Group Fastening Technology Limited

Independent Auditor's Report to the Members of SFS Group Fastening Technology Limited

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

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.

......................................
Gillian Craven FCA (Senior Statutory Auditor)
For and on behalf of Watson Buckle Limited,
Statutory Auditors & Chartered Accountants
Bradford

24 January 2024

 

SFS Group Fastening Technology Limited

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

61,468,242

58,205,500

Cost of sales

 

(39,903,515)

(37,265,883)

Gross profit

 

21,564,727

20,939,617

Distribution costs

 

(4,930,140)

(4,952,860)

Administrative expenses

 

(8,001,400)

(7,734,163)

Operating profit

4

8,633,187

8,252,594

Other interest receivable and similar income

110,202

11,191

Interest payable and similar expenses

5

-

(15)

   

110,202

11,176

Profit before tax

 

8,743,389

8,263,770

Tax on profit

8

(2,393,645)

(1,967,871)

Profit for the financial year

 

6,349,744

6,295,899

 

SFS Group Fastening Technology Limited

Statement of Comprehensive Income for the Year Ended 31 December 2023

2023
£

2022
£

Profit for the year

6,349,744

6,295,899

Remeasurement gain/loss on defined benefit pension schemes

(133,000)

(75,200)

Total comprehensive income for the year

6,216,744

6,220,699

 

SFS Group Fastening Technology Limited

(Registration number: 01737942)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

           

Fixed assets

   

 

Intangible assets

9

 

4,012,037

 

5,508,541

Tangible assets

10

 

5,257,033

 

6,020,150

   

9,269,070

 

11,528,691

Current assets

   

 

Stocks

11

9,644,163

 

10,700,100

 

Debtors

12

14,309,216

 

15,083,171

 

Cash at bank and in hand

 

7,217,541

 

6,443,050

 

 

31,170,920

 

32,226,321

 

Creditors: Amounts falling due within one year

13

(6,837,296)

 

(6,161,452)

 

Net current assets

   

24,333,624

 

26,064,869

Total assets less current liabilities

   

33,602,694

 

37,593,560

Provisions for liabilities

14

 

(482,000)

 

(689,610)

Net assets

   

33,120,694

 

36,903,950

Capital and reserves

   

 

Called up share capital

2,000,000

 

2,000,000

 

Retained earnings

17

31,120,694

 

34,903,950

 

Shareholders' funds

   

33,120,694

 

36,903,950

Approved and authorised by the Board on 24 January 2024 and signed on its behalf by:
 

.........................................
U Langenauer
Director

.........................................
A Blank
Director

 

SFS Group Fastening Technology Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Profit and loss account
£

Total
£

At 1 January 2023

2,000,000

34,903,950

36,903,950

Profit for the year

-

6,349,744

6,349,744

Other comprehensive income

-

(133,000)

(133,000)

Total comprehensive income

-

6,216,744

6,216,744

Dividends

-

(10,000,000)

(10,000,000)

At 31 December 2023

2,000,000

31,120,694

33,120,694

Share capital
£

Retained earnings
£

Total
£

At 1 January 2022

2,000,000

33,683,251

35,683,251

Profit for the year

-

6,295,899

6,295,899

Other comprehensive income

-

(75,200)

(75,200)

Total comprehensive income

-

6,220,699

6,220,699

Dividends

-

(5,000,000)

(5,000,000)

At 31 December 2022

2,000,000

34,903,950

36,903,950

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
153 Kirkstall Road
Leeds
West Yorkshire
LS4 2AT

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The company's functional presentational currency is pounds Sterling.

Summary of disclosure exemptions

The company has taken advantage of the exemptions available under FRS 102, Section 33 Related party disclosures and UK Statutory Instruments, 1 Sch.72 from disclosing transactions and balances with fellow group undertakings that are wholly owned.

The company has taken advantage of the exemption to disclose transactions with key management personnel and the exemption to prepare Statement of Cash Flows in accordance with Financial Reporting Standard 102 Section 1.12.

Name of parent of group

These financial statements are consolidated in the financial statements of SFS Group AG.

The financial statements of SFS Group AG may be obtained from SFS Group website, www.sfs.com.

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Key sources of estimation uncertainty

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Useful economic lives of tangible assets
The annual depreciation charge for tangible assets and their carrying amount is determined by the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually and amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
The carrying amount is £5,257,033 (2022 -£6,020,150).

Stock provision
The company makes an estimate of the recoverability of the cost of stock. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials.

Stock overhead absorption
Management have estimated labour and machine rates plus quality, production and set up fees for all manufacturing processes; estimates are based on historical and projected direct costs and overheads allocated on a relevant basis according to the nature of the cost.
The estimates are applied to all own manufactured stock to incorporate direct costs and overheads into the value.
The carrying amount is £9,644,163 (2022 -£10,700,100).

Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
The carrying amount is £7,981,541 (2022 -£9,417,063).

Defined benefit pension scheme liability
The company has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends.
The carrying amount is £Nil (2022 -£Nil).

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, discounts and rebates.

The company recognises revenue when the significant risks and rewards of ownership have been transferred to the buyer; the company retains no continuing involvement or control over the goods; the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold buildings

2% to 10% straight line basis

Plant and equipment

10% to 33% straight line basis

Fixtures and fittings

10% to 20% straight line basis

Motor vehicles

15% to 33% straight line basis

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10% straight line basis

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the weighted average method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Provisions for liabilities

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension plans

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Defined benefit pension plans

The company also operates a defined benefit pension scheme under which there are Guaranteed Minimum Pension (GMP) liabilities. The benefits provided by the Scheme must be at least equal to each member's GMP. GMP's ceased to accrue on 5 April 1997. Member contributions to the scheme ceased with effect from 1 August 2005 and the Scheme now operates on a paid up basis. Contributions to the pension scheme are paid according to the advice of the actuary.

Scheme assets are measured at fair values. Scheme liabilities are measured on an actuarial basis using the projected unit method and are discounted at appropriate high quality corporate bond rates. The net surplus or deficit, adjusted for deferred tax, is presented separately from other net assets on the balance sheet. A net surplus is recognised only to the extent that it is recoverable by the company.

The current service cost and costs from settlements and curtailments are charged against operating profit. Past service costs are spread over the period until the benefit increases vest. Interest on the scheme liabilities and the expected return on scheme assets are included in other finance costs. Actuarial gains and losses are reported in the statement of comprehensive income.

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Financial instruments

Financial assets
Basic financial assets, including trade and other receivables, are initially recognised at transaction price, 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 for a similar asset. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 and any subsequent reversal is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities
Basic financial liabilities, including trade and other payables, 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 receipts discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

3

Revenue

The analysis of the company's turnover for the year by class of business is as follows:

2023
£

2022
£

Sale of goods

60,467,788

57,698,768

Other revenue

1,000,454

506,732

61,468,242

58,205,500

The analysis of the company's Turnover for the year by market is as follows:

2023
£

2022
£

UK

50,622,103

47,518,279

Europe

8,934,076

8,240,362

Rest of world

1,912,063

2,446,859

61,468,242

58,205,500

4

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

1,183,864

1,200,376

Amortisation expense

1,496,504

1,623,365

Foreign exchange losses/(gains)

45,289

(253,978)

Operating lease expense

625,265

530,809

Profit on disposal of property, plant and equipment

-

(4,700)

5

Interest payable and similar expenses

2023
£

2022
£

Interest expense on other finance liabilities

-

15

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

6

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

7,323,401

6,782,568

Social security costs

828,303

787,876

Pension costs, defined contribution scheme

469,841

459,397

Other post-employment benefit costs

35,142

66,309

Other employee expense

45,360

150,433

8,702,047

8,246,583

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

78

79

Administration and support

22

24

Sales

68

61

168

164

7

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

31,450

32,500

Other fees to auditors

Taxation compliance services

10,500

6,700


 

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

8

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

2,382,000

1,939,000

UK corporation tax adjustment to prior periods

(5,355)

71

2,376,645

1,939,071

Deferred taxation

Arising from origination and reversal of timing differences

17,000

(103,200)

Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods

-

132,000

Total deferred taxation

17,000

28,800

Tax expense in the income statement

2,393,645

1,967,871

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 25% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

8,743,389

8,263,770

Corporation tax at standard rate

2,185,847

1,570,116

Effect of expense not deductible in determining taxable profit (tax loss)

362,869

291,502

Deferred tax expense relating to changes in tax rates or laws

-

132,000

UK deferred tax credit relating to changes in tax rates or laws

(149,716)

(25,818)

(Decrease)/increase in UK and foreign current tax from adjustment for prior periods

(5,355)

71

Total tax charge

2,393,645

1,967,871

Deferred tax

Deferred tax assets and liabilities

2023

Liability
£

Accelerated capital allowances

563,000

Other timing differences

(81,000)

482,000

2022

Liability
£

Accelerated capital allowances

637,000

Other timing differences

(172,000)

465,000

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £(147,234) (2022 - £137,700), being the reversal of capital allowances in excess of depreciation.

Tax relating to items recognised in other comprehensive income or equity

2023
£

2022
£

Deferred tax related to items recognised as items of other comprehensive income

-

(43,200)

9

Intangible assets

Goodwill
 £

Cost

At 1 January 2023

16,233,635

At 31 December 2023

16,233,635

Amortisation

At 1 January 2023

10,725,094

Amortisation charge

1,496,504

At 31 December 2023

12,221,598

Carrying amount

At 31 December 2023

4,012,037

At 31 December 2022

5,508,541

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Tangible assets

Freehold land and buildings
£

Plant and equipment
 £

Fixtures and fittings
 £

Motor vehicles
 £

Assets under construction
 £

Total
£

Cost

At 1 January 2023

9,114,795

15,717,728

781,313

246,765

179,933

26,040,534

Additions

228,309

73,658

89,925

-

28,855

420,747

Transfers

179,933

39,662

-

(39,662)

(179,933)

-

At 31 December 2023

9,523,037

15,831,048

871,238

207,103

28,855

26,461,281

Depreciation

At 1 January 2023

7,635,095

11,595,765

611,903

177,621

-

20,020,384

Charge for the year

172,916

947,010

55,967

7,971

-

1,183,864

At 31 December 2023

7,808,011

12,542,775

667,870

185,592

-

21,204,248

Carrying amount

At 31 December 2023

1,715,026

3,288,273

203,368

21,511

28,855

5,257,033

At 31 December 2022

1,479,700

4,121,963

169,410

69,144

179,933

6,020,150

The cost of freehold land and buildings includes land of £190,000 (2022 - £190,000) which is not depreciated.

11

Stocks

2023
£

2022
£

Raw materials and consumables

463,184

1,067,843

Work in progress

1,050,105

849,532

Finished goods and goods for resale

8,130,874

8,782,725

9,644,163

10,700,100

Impairment of stocks

The amount of impairment (gain)/loss included in profit or loss is £156,093 (2022 - £212,509).

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

12

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

7,972,475

9,413,915

Amounts owed by related parties

20

5,937,147

5,300,093

Other debtors

 

9,066

3,148

Prepayments

 

390,528

298,259

Corporation tax asset

8

-

67,756

   

14,309,216

15,083,171

13

Creditors

Note

2023
£

2022
£

Due within one year

 

Trade creditors

 

2,206,924

1,963,534

Amounts due to group undertakings

20

1,234,591

1,148,222

Social security and other taxes

 

1,090,807

943,432

Outstanding defined contribution pension costs

 

54,990

50,479

Other creditors

 

24,710

36,030

Accruals

 

2,223,941

2,019,755

Corporation tax liability

8

1,333

-

 

6,837,296

6,161,452

14

Deferred tax and other provisions

Legal provision
£

Deferred tax
£

Total
£

At 1 January 2023

224,610

465,000

689,610

Increase (decrease) in existing provisions

(224,610)

17,000

(207,610)

At 31 December 2023

-

482,000

482,000

15

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £469,841 (2022 - £459,397).

Contributions totalling £54,990 (2022 - £50,479) were payable to the scheme at the end of the year and are included in creditors.

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Defined benefit pension schemes

SFS Group Fastening Technology Limited Retirement Benefits Scheme

The company operates a defined benefit pension scheme under which there are Guaranteed Minimum Pension (GMP) liabilities. The benefits provided by the Scheme must be at least equal to each member's GMP. GMP's ceased to accrue on 5 April 1997. Member contributions to the scheme ceased with effect from 1 August 2005 and the scheme now operates on a paid up basis. The assets of the schemes are administered by trustees in funds independent of the assets of the company.

The most recently completed actuarial valuation was performed by an independent actuary for the trustees of the Scheme and was carried out on 1 April 2021. The valuation has been updated to the FRS102 effective date of 31 December 2023 to produce the following disclosure.

The current schedule of contributions requires that the employer pays:
The Trustees and the employer have agreed to pay deficit funding contributions of £7,500 per month to 30 June 2022 and then £10,000 per month until 30 April 2027.

Reconciliation of scheme assets and liabilities to assets and liabilities recognised

The amounts recognised in the balance sheet are as follows:

2023
£

2022
£

Fair value of scheme assets

1,122,000

1,092,000

Present value of defined benefit obligation

(556,000)

(613,000)

566,000

479,000

Effect of the asset ceiling

(566,000)

(479,000)

Defined benefit pension scheme surplus/(deficit)

-

-

Defined benefit obligation

Changes in the defined benefit obligation are as follows:

2023
£

Present value at start of year

613,000

Interest cost

29,000

Actuarial gains and losses

26,000

Benefits paid

(112,000)

Present value at end of year

556,000

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Fair value of scheme assets

Changes in the fair value of scheme assets are as follows:

2023
£

Fair value at start of year

1,092,000

Interest income

56,000

Return on plan assets, excluding amounts included in interest income/(expense)

(43,000)

Employer contributions

129,000

Benefits paid

(112,000)

Fair value at end of year

1,122,000

Analysis of assets

The major categories of scheme assets are as follows:

2023
%

2022
%

Cash and cash equivalents

6

9

Equity instruments

28

26

Property

7

8

Corporate bonds

47

44

Gilts

12

13

100

100

Return on scheme assets

2023
£

2022
£

Return on scheme assets

13,000

12,000

The pension scheme has not invested in any of the company's own financial instruments or in properties or other assets used by the company.

Principal actuarial assumptions

The principal actuarial assumptions at the balance sheet date are as follows:

2023
%

2022
%

Discount rate

4.70

4.90

Retail Price Inflation

3.10

3.20

Inflation

2.50

2.60

CPI assumption used for increases to pensions in payment which are due to increase in line with CPI

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Post retirement mortality assumptions

2023
Years

2022
Years

Current UK pensioners at retirement age - male

19.00

19.00

Current UK pensioners at retirement age - female

26.00

22.00

Future UK pensioners at retirement age - male

20.00

21.00

Future UK pensioners at retirement age - female

27.00

23.00

16

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

2,000,000

2,000,000

2,000,000

2,000,000

         

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
All shares rank pari passu for income, capital and voting right.

17

Reserves

Share capital
Represents the nominal value of issued shares.

Profit and loss accounts
Includes all current and prior periods distributable profits and losses.

18

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

533,513

504,200

Later than one year and not later than five years

983,291

925,330

1,516,804

1,429,530

19

Commitments

Capital commitments

The total amount contracted for but not provided in the financial statements was £473,100 (2022 - £41,769).

 

SFS Group Fastening Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

20

Related party transactions

Summary of transactions with other related parties

Subsidiary undertakings not under 100% common ownership and a post-employment benefit plan for the benefit of past and present employees:
 

Income and receivables from related parties

2023

Other related parties
£

Sale of goods

-

Amounts receivable from related party

-

2022

Other related parties
£

Sale of goods

111,281

Amounts receivable from related party

608

Expenditure with and payables to related parties

2023

Other related parties
£

Purchase of goods

171,311

Settlement of liabilities

146,761

318,072

Amounts payable to related party

1,658

2022

Other related parties
£

Purchase of goods

173,050

Settlement of liabilities

115,145

288,195

Amounts payable to related party

48,380

21

Parent and ultimate parent undertaking

The company's immediate parent is SFS intec Holding AG, incorporated in Switzerland. The registered address of SFS intec Holding AG is Rosenbergsaustrasse 20, 9435 Heerbrugg, Switzerland.
 
The ultimate parent undertaking and ultimate controlling party is SFS Group AG, a company incorporated in Switzerland.