Company registration number 04077036 (England and Wales)
FSI LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
FSI LIMITED
COMPANY INFORMATION
Directors
Mr. N M Morrey
Mr. I Cowley
Company number
04077036
Registered office
Westminster Industrial Estate
Tamworth Road
Measham
Derbyshire
United Kingdom
DE12 7DS
Auditor
Azets Audit Services
St Davids Court
Union Street
Wolverhampton
West Midlands
United Kingdom
WV1 3JE
FSI LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
FSI LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The main activity of the company is unchanged and is principally that of the manufacture and distribution of passive firestopping and compartmentation systems and products.
The Directors are pleased with the results for the financial year ended 31 December 2023. Turnover increased by 4.8% compared to the industry average of 2%. Turnover for the year was £37,733,723 (2022: £35,908,106), with the resultant profit before tax being £1,523,389 (2022: £1,806,503).
The statement of financial position further strengthened in the year with net assets of £7,061,686 at 31 December 2023 (2022: £5,587,835), a 26.4% increase on the previous year.
Key performance indicators for the financial year for the company for the year ended 31 December 2023, with comparatives for the preceding year are set out below:
Year Ended Year Ended
31 December 2023 31 December 2022
Turnover (excl. VAT) £37,733,723 £35,908,106
Gross Profit £9,665,601 £9,209,538
EBITDA £2,094,365 £2,402,594
The company operates in a highly technical environment and continues to invest in the development of new products to satisfy its clients needs.
The recruitment and retention of highly skilled and quality staff remains a priority for this company, in order that the business may continue to achieve its business objectives.
The company has had a strong start to the new financial year and the Directors are confident that the business is well placed to achieve its forecast in 2024.
Financial risk management objectives and policies and principal risks and uncertainties
There are a number of risks and uncertainties that could have an impact on the company's long-term performance. The company has an extensive risk management programme which is designed to ensure any significant or emerging risks are identified and effectively managed. The principal risks faced by the company and its management response are summarised below.
Credit risk
The company provides sales on credit terms to many of its customers. There is a risk that the customers may not be able to pay outstanding monies due to the company. The company has established procedures for reviewing and collecting any outstanding monies. Any significant outstanding debts are regularly reviewed, and action taken promptly where necessary. The company has a professional credit control team, and any necessary provisions for impaired debts are made promptly. In 2024 the company introduced a credit insurance policy to further protect against bad debt risk.
FSI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Governmental and other regulations
The company's operations are affected by various statutes, regulations and laws in the countries and markets in which it operates. Whilst the company is not currently engaged in a highly regulated industry it is subject to the laws governing business generally. The company has an extensive range of certified testing documentation relating to the range of products sold within its portfolio. These tests cover regulations and requirements for countries and testing houses around the world. The company is aware of the responsibility of providing products which fulfil building regulations in the countries and markets they operate. The company is also subject to general laws including but not restricted to regulation governing competition, the environment, Health and Safety, transportation, labour and employment practices (including pensions), data protection and other matters. The Company regularly monitors regulations across its markets to ensure that the effects of changes are minimised. The Company meets the requirements of UK Legislation including the UK Bribery Act and the Modern Slavery Act.
Financial flexibility risk
The major markets of the company around the world continue to experience a competitive trading environment, however the risks associated have been addressed by the company from its continued focus on the strength of its product offered, its relationships with customers and suppliers and the diversity of those customers. The company mitigates currency fluctuation by purchasing and selling less than 10% of its products in currencies other than GBP. The exposure to exchange risk is therefore minimal.
Market conditions
The company sells to a diverse range of markets both by geographical region and the nature of the customer. The company is therefore dependant on the level of activity in those markets. An important facet of the business is the company’s supply chain for products and materials. The company has long standing and synergistic relationships with its key suppliers. Our procurement department works closely with all suppliers in order to ensure we achieve the best quality and price whilst minimising risk by ensuring that we are not over reliant upon any supplier.
The company continues to have strong relationships with key customers and suppliers to ensure that any disruption in markets around the world either by price or supply are kept to the absolute minimum.
Since the implementation of Brexit, the company has ensured that appropriate procedures are in place so that the risk of any potential delays to imported materials are mitigated.
Human Resource
The company recognises that a key component to its success and to enable it to meet the challenges that it faces is the ability to attract, retain and develop the best people it can. The company has an excellent history in retaining its employees and will strive to continue to do this by ensuring staff development and training is encouraged at all levels by creating a work culture and environment that enables this to flourish. The average monthly number of persons directly employed during the year was 142 (2022: 143).
Health & Safety
The health and safety of all employees and customers is of vital importance to the company. The company has in place a rigorous processes and procedures that it believes will mitigate health and safety risks. These policies and procedures are regularly reviewed to ensure all are up to date and meet the needs of all concerned
Mr. N M Morrey
Director
26 September 2024
FSI LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the manufacture and distribution of passive fire-protection solutions.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr. N M Morrey
Mr. I Cowley
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management objectives.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
FSI LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
Mr. N M Morrey
Director
26 September 2024
FSI LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF FSI LIMITED
- 5 -
Opinion
We have audited the financial statements of FSi Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
FSI LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF FSI LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
FSI LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF FSI LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Lee Meredith BFP ACA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
26 September 2024
Chartered Accountants
Statutory Auditor
St Davids Court
Union Street
Wolverhampton
West Midlands
United Kingdom
WV1 3JE
FSI LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
37,733,723
35,908,106
Cost of sales
(28,068,122)
(26,698,568)
Gross profit
9,665,601
9,209,538
Administrative expenses
(8,195,626)
(7,417,049)
Operating profit
4
1,469,975
1,792,489
Interest receivable and similar income
7
62,861
26,240
Interest payable and similar expenses
8
(9,447)
(12,226)
Profit before taxation
1,523,389
1,806,503
Tax on profit
9
(339,965)
(320,555)
Profit for the financial year
1,183,424
1,485,948
The notes on pages 12 to 23 form part of these financial statements.
FSI LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
1,183,424
1,485,948
Other comprehensive income
-
-
Total comprehensive income for the year
1,183,424
1,485,948
The notes on pages 12 to 23 form part of these financial statements.
FSI LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,322,029
2,185,982
Current assets
Stocks
12
2,805,631
2,603,050
Debtors
13
8,227,321
6,749,179
Cash at bank and in hand
13,580
3,602
11,046,532
9,355,831
Creditors: amounts falling due within one year
14
(6,011,235)
(5,514,779)
Net current assets
5,035,297
3,841,052
Total assets less current liabilities
7,357,326
6,027,034
Creditors: amounts falling due after more than one year
15
(57,500)
(71,000)
Provisions for liabilities
Provisions
16
145,000
120,000
Deferred tax liability
17
383,567
248,199
(528,567)
(368,199)
Net assets
6,771,259
5,587,835
Capital and reserves
Called up share capital
20
1,729
1,729
Share premium account
224,802
224,802
Other reserves
7,082
Profit and loss reserves
6,544,728
5,354,222
Total equity
6,771,259
5,587,835
The notes on pages 12 to 23 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 26 September 2024 and are signed on its behalf by:
Mr. N M Morrey
Director
Company Registration No. 04077036
FSI LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2022
1,729
224,802
7,082
3,868,274
4,101,887
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
1,485,948
1,485,948
Balance at 31 December 2022
1,729
224,802
7,082
5,354,222
5,587,835
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
1,183,424
1,183,424
Transfer
-
-
(7,082)
7,082
-
Balance at 31 December 2023
1,729
224,802
-
6,544,728
6,771,259
The notes on pages 12 to 23 form part of these financial statements.
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
FSi Limited is a private company limited by shares incorporated in England and Wales. The registered office is Westminster Industrial Estate, Tamworth Road, Measham, Derbyshire, United Kingdom, DE12 7DS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Etex Building Performance Limited. These consolidated financial statements are available from its registered office, Gordano House, Marsh Lane, Easton-In-Gordano, Bristol, BS20 0NE.
1.2
Going concern
The Directors have reviewed detailed financial projections, including both profit and loss forecasts as well as cash-flow forecasts and considered all reasonably foreseeable potential scenarios and uncertaintiestrue. They have satisfied themselves that the company will continue in operational existence for a period of at least 12 months from the signing of these financial statements and have therefore prepared the financial statement on a going concern basis and that no material uncertainty exists.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Patents & licences
10% straight line
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Short Leasehold land and buildings
2.5 - 10% straight line
Plant and equipment
5 - 10% straight line
Fixtures and fittings
5 - 20% straight line
Motor vehicles
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
The depreciation rates range noted above have been re-stated to more accurately reflect the amounts charged, which remain inline with the group accounting manual. There have been no changes to the amounts charged historically or going forward.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.11
Financial instruments
The company only has financial instruments that are classified as basic financial instruments.
Financial instruments are recognised in the company's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade debtors, amounts due to group undertakings and cash and bank balances, are initially measured at transaction price and are subsequently carried at amortised cost less impairment.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including trade creditors , bank loans, and amounts due to group undertakings, are initially recognised at transaction price are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that 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 reporting end date, 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. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.15
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Grants under the Job Retention Scheme are recognised in profit and loss in the period in which the respective staff are employed.
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
There are no key judgements or sources of estimation uncertainty.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
28,411,346
25,788,416
Europe
7,298,347
8,909,966
Middle East
2,024,030
1,024,886
Rest of world
-
184,838
37,733,723
35,908,106
2023
2022
£
£
Other revenue
Interest income
62,861
26,240
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
2,899
7,723
Research and development costs
123,629
83,561
Fees payable to the company's auditor for the audit of the company's financial statements
42,000
26,250
Depreciation of owned tangible fixed assets
624,390
610,105
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
142
143
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,054,877
4,240,558
Social security costs
511,625
425,393
Pension costs
423,600
363,223
5,990,102
5,029,174
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
66,906
Company pension contributions to defined contribution schemes
-
7,948
74,854
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 1).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
62,861
26,240
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
-
3,895
Other interest
9,447
8,331
9,447
12,226
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
278,175
287,830
Adjustments in respect of prior periods
(79,759)
(22,695)
Total current tax
198,416
265,135
Deferred tax
Origination and reversal of timing differences
141,549
55,420
Total tax charge
339,965
320,555
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,523,389
1,806,503
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
358,301
343,236
Adjustments in respect of prior years
(79,759)
(22,695)
Effect of change in corporation tax rate
13,302
Permanent capital allowances in excess of depreciation
(33,720)
Depreciation on assets not qualifying for tax allowances
17,566
20,432
Other permanent differences
4,108
Deferred tax adjustments in respect of prior years
31,735
Deferred tax charged at higher rate
8,014
Taxation charge for the year
339,965
320,555
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Intangible fixed assets
Goodwill
Patents & licences
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
194,143
391,872
586,015
Amortisation and impairment
At 1 January 2023 and 31 December 2023
194,143
391,872
586,015
Carrying amount
At 31 December 2023
At 31 December 2022
11
Tangible fixed assets
Short Leasehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
788,527
4,344,313
206,962
224,902
5,564,704
Additions
63,797
196,433
355,081
145,125
760,436
Transfers
2,078
(2,077)
1
At 31 December 2023
854,402
196,433
4,697,317
206,962
370,027
6,325,141
Depreciation and impairment
At 1 January 2023
269,112
2,762,536
122,172
224,902
3,378,722
Depreciation charged in the year
135,912
423,512
24,653
40,313
624,390
At 31 December 2023
405,024
3,186,048
146,825
265,215
4,003,112
Carrying amount
At 31 December 2023
449,378
196,433
1,511,269
60,137
104,812
2,322,029
At 31 December 2022
519,415
1,581,777
84,790
2,185,982
12
Stocks
2023
2022
£
£
Raw materials and consumables
1,574,655
2,031,685
Finished goods and goods for resale
1,230,976
571,365
2,805,631
2,603,050
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,721,445
4,897,129
Corporation tax recoverable
487
Amounts owed by group undertakings
2,105,394
1,736,049
Other debtors
235,764
Prepayments and accrued income
164,718
115,514
8,227,321
6,749,179
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Trade creditors
3,279,274
2,437,486
Amounts owed to group undertakings
795,253
2,131,926
Corporation tax
350,067
138,770
Other taxation and social security
124,488
278,369
Government grants
18
13,500
13,500
Other creditors
38,134
32,149
Accruals and deferred income
1,410,519
482,579
6,011,235
5,514,779
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Government grants
18
57,500
71,000
16
Provisions for liabilities
2023
2022
£
£
Dilapidation provision
145,000
120,000
Movements on provisions:
Dilapidation provision
£
At 1 January 2023
120,000
Additional provisions in the year
25,000
At 31 December 2023
145,000
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
392,988
286,851
Retirement benefit obligations
(9,421)
-
Other short term timing differences
-
(38,652)
383,567
248,199
2023
Movements in the year:
£
Liability at 1 January 2023
248,199
Charge to profit or loss
135,368
Liability at 31 December 2023
383,567
18
Government grants
2023
2022
£
£
Arising from government grants
71,000
84,500
Included in the financial statements as follows:
Current liabilities
13,500
13,500
Non-current liabilities
57,500
71,000
71,000
84,500
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
423,600
363,223
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
FSI LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1,111
1,111
1,111
1,111
Ordinary B of £1 each
420
420
420
420
Ordinary C of £1 each
198
198
198
198
1,729
1,729
1,729
1,729
21
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
511,574
483,515
Between two and five years
1,330,787
1,451,779
In over five years
729,838
909,383
2,572,199
2,844,677
22
Related party transactions
The company has taken the exemption under paragraph 33.1A of FRS 102 which permits non disclosure of transactions that have taken place between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
23
Ultimate controlling party
The immediate parent undertaking of the company was Etex Building Performance Limited. The ultimate parent undertaking is Etex SA, a company registered in Belgium. Copies of the consolidated financial statements of Etex SA can be obtained from Etex NV, PassPort Building Luchthaven Brussel Nationaal Gebouw 1K, 1930 Zaventem, Belgium
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