Registration number:
SFS Group Fastening Technology Limited
for the Year Ended 31 December 2023
SFS Group Fastening Technology Limited
Contents
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Profit and Loss Account |
|
Statement of Comprehensive Income |
|
Balance Sheet |
|
Statement of Changes in Equity |
|
Notes to the Financial Statements |
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
......................................... |
......................................... |
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:
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
.........................................
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.
......................................
For and on behalf of
Statutory Auditors & Chartered Accountants
SFS Group Fastening Technology Limited
Profit and Loss Account for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Distribution costs |
( |
( |
|
Administrative expenses |
( |
( |
|
Operating profit |
8,633,187 |
8,252,594 |
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
- |
( |
|
110,202 |
11,176 |
||
Profit before tax |
|
|
|
Tax on profit |
( |
( |
|
Profit for the financial year |
|
|
SFS Group Fastening Technology Limited
Statement of Comprehensive Income for the Year Ended 31 December 2023
2023 |
2022 |
|
Profit for the year |
|
|
Remeasurement gain/loss on defined benefit pension schemes |
( |
( |
Total comprehensive income for the year |
|
|
SFS Group Fastening Technology Limited
(Registration number: 01737942)
Balance Sheet as at 31 December 2023
Note |
2023 |
2022 |
|||
Fixed assets |
|||||
Intangible assets |
|
|
|||
Tangible assets |
|
|
|||
|
|
||||
Current assets |
|||||
Stocks |
|
|
|||
Debtors |
|
|
|||
Cash at bank and in hand |
|
|
|||
|
|
||||
Creditors: Amounts falling due within one year |
( |
( |
|||
Net current assets |
|
|
|||
Total assets less current liabilities |
|
|
|||
Provisions for liabilities |
( |
( |
|||
Net assets |
|
|
|||
Capital and reserves |
|||||
Called up share capital |
2,000,000 |
2,000,000 |
|||
Retained earnings |
31,120,694 |
34,903,950 |
|||
Shareholders' funds |
33,120,694 |
36,903,950 |
Approved and authorised by the
......................................... |
......................................... |
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 |
|
|
|
Profit for the year |
- |
|
|
Other comprehensive income |
- |
( |
( |
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2023 |
|
|
|
Share capital |
Retained earnings |
Total |
|
At 1 January 2022 |
|
|
|
Profit for the year |
- |
|
|
Other comprehensive income |
- |
( |
( |
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
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
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
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
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
Revenue |
The analysis of the company's turnover for the year by class of business is as follows:
2023 |
2022 |
|
Sale of goods |
|
|
Other revenue |
|
|
|
|
The analysis of the company's Turnover for the year by market is as follows:
2023 |
2022 |
|
UK |
|
|
Europe |
|
|
Rest of world |
|
|
|
|
Operating profit |
Arrived at after charging/(crediting)
2023 |
2022 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange losses/(gains) |
|
( |
Operating lease expense |
625,265 |
530,809 |
Profit on disposal of property, plant and equipment |
- |
( |
Interest payable and similar expenses |
2023 |
2022 |
|
Interest expense on other finance liabilities |
- |
|
SFS Group Fastening Technology Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Other post-employment benefit costs |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Production |
|
|
Administration and support |
|
|
Sales |
|
|
|
|
Auditors' remuneration |
2023 |
2022 |
|
Audit of the financial statements |
|
|
Other fees to auditors |
||
Taxation compliance services |
|
|
SFS Group Fastening Technology Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Taxation |
Tax charged/(credited) in the profit and loss account
2023 |
2022 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
( |
|
2,376,645 |
1,939,071 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
( |
Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods |
- |
132,000 |
Total deferred taxation |
|
|
Tax expense in the income statement |
|
|
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
The differences are reconciled below:
2023 |
2022 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Deferred tax expense relating to changes in tax rates or laws |
- |
|
UK deferred tax credit relating to changes in tax rates or laws |
( |
( |
(Decrease)/increase in UK and foreign current tax from adjustment for prior periods |
( |
|
Total tax charge |
|
|
Deferred tax
Deferred tax assets and liabilities
2023 |
Liability |
Accelerated capital allowances |
|
Other timing differences |
( |
|
2022 |
Liability |
Accelerated capital allowances |
|
Other timing differences |
( |
|
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 |
- |
( |
Intangible assets |
Goodwill |
|
Cost |
|
At 1 January 2023 |
|
At 31 December 2023 |
|
Amortisation |
|
At 1 January 2023 |
|
Amortisation charge |
|
At 31 December 2023 |
|
Carrying amount |
|
At 31 December 2023 |
|
At 31 December 2022 |
|
SFS Group Fastening Technology Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Tangible assets |
Freehold land and buildings |
Plant and equipment |
Fixtures and fittings |
Motor vehicles |
Assets under construction |
Total |
|
Cost |
||||||
At 1 January 2023 |
|
|
|
|
|
|
Additions |
|
|
|
- |
|
|
Transfers |
|
|
- |
( |
( |
- |
At 31 December 2023 |
|
|
|
|
|
|
Depreciation |
||||||
At 1 January 2023 |
|
|
|
|
- |
|
Charge for the year |
|
|
|
|
- |
|
At 31 December 2023 |
|
|
|
|
- |
|
Carrying amount |
||||||
At 31 December 2023 |
|
|
|
|
|
|
At 31 December 2022 |
|
|
|
|
|
|
The cost of freehold land and buildings includes land of £190,000 (2022 - £190,000) which is not depreciated.
Stocks |
2023 |
2022 |
|
Raw materials and consumables |
|
|
Work in progress |
|
|
Finished goods and goods for resale |
|
|
|
|
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
Debtors |
Current |
Note |
2023 |
2022 |
Trade debtors |
|
|
|
Amounts owed by related parties |
|
|
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Corporation tax asset |
- |
|
|
|
|
Creditors |
Note |
2023 |
2022 |
|
Due within one year |
|||
Trade creditors |
|
|
|
Amounts due to group undertakings |
|
|
|
Social security and other taxes |
|
|
|
Outstanding defined contribution pension costs |
|
|
|
Other creditors |
|
|
|
Accruals |
|
|
|
Corporation tax liability |
1,333 |
- |
|
|
|
Deferred tax and other provisions |
Legal provision |
Deferred tax |
Total |
|
At 1 January 2023 |
|
|
|
Increase (decrease) in existing provisions |
( |
|
( |
At 31 December 2023 |
- |
|
|
|
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 £
Contributions totalling £
SFS Group Fastening Technology Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Defined benefit pension schemes
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 |
|
|
Present value of defined benefit obligation |
( |
( |
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 |
|
Interest cost |
|
Actuarial gains and losses |
|
Benefits paid |
( |
Present value at end of year |
|
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 |
|
Interest income |
|
Return on plan assets, excluding amounts included in interest income/(expense) |
( |
Employer contributions |
|
Benefits paid |
( |
Fair value at end of year |
|
Analysis of assets
The major categories of scheme assets are as follows:
2023 |
2022 |
|
Cash and cash equivalents |
|
|
Equity instruments |
|
|
Property |
|
|
Corporate bonds |
47 |
44 |
Gilts |
12 |
13 |
100 |
100 |
Return on scheme assets
2023 |
2022 |
|
Return on scheme assets |
|
|
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 |
|
|
Retail Price Inflation |
|
|
Inflation |
|
|
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 |
2022 |
|
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 |
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
2,000,000 |
|
2,000,000 |
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions: |
Reserves |
Share capital
Represents the nominal value of issued shares.
Profit and loss accounts
Includes all current and prior periods distributable profits and losses.
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 |
|
|
Later than one year and not later than five years |
|
|
|
|
Commitments |
Capital commitments
The total amount contracted for but not provided in the financial statements was £
SFS Group Fastening Technology Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Related party transactions |
Summary of transactions with other related parties
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 |
|
Amounts receivable from related party |
|
|
Expenditure with and payables to related parties
2023 |
Other related parties |
Purchase of goods |
|
Settlement of liabilities |
|
|
|
Amounts payable to related party |
|
|
2022 |
Other related parties |
Purchase of goods |
|
Settlement of liabilities |
|
|
|
Amounts payable to related party |
|
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent undertaking and ultimate controlling party is SFS Group AG, a company incorporated in Switzerland.