REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
FRANKLIN PRODUCTS LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
FRANKLIN PRODUCTS LIMITED |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Director | 4 |
Report of the Independent Auditors | 6 |
Statement of Comprehensive Income | 10 |
Statement of Financial Position | 11 |
Statement of Changes in Equity | 12 |
Statement of Cash Flows | 13 |
Notes to the Statement of Cash Flows | 14 |
Notes to the Financial Statements | 15 |
FRANKLIN PRODUCTS LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Certified Accountants |
& Statutory Auditors |
2 Manor Farm Court |
Old Wolverton Road |
Old Wolverton |
Milton Keynes |
Buckinghamshire |
MK12 5NN |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The director presents her strategic report for the year ended 31 December 2023. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The director continually reviews and evaluates the risks that the company is facing. The principal risks and uncertainties facing the company are broadly grouped as: Competitive, Legislative, and Financial risks. |
Competitive risks |
The aircraft seating business throughout Europe has faced very strong competition in recent years. The company puts strong emphasis on service levels, quality of products and competitive pricing to its customer base to maintain its position within the market. |
Legislative risks |
The director does not expect the departure of the United Kingdom from the European Union to have any significant effect on the company's business. |
Legislative risk within Europe is controlled by the European Aviation Safety Agency and in the UK more specifically by the Civil Aviation Authority. Franklin Products Limited has EASA Production Organisation Approval (POA) Part 21 Section A Sub part G Approval Number UK.21G.2392. |
Financial risk management objectives and policies |
The company's activities expose it to a number of financial risks including price risk, credit risk, cash flow risk and liquidity risk. The company holds bank accounts in four major currencies (GBP, USD, EUR, PLN) for the purposes of making and receiving payments and does not use derivative financial instruments for speculative purposes. |
* Cash flow risk |
The company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The company does not take any specific action to minimise this risk and recognises any realised or unrealised gains or losses to the income statement in the month it is incurred. |
* Credit risk |
The company's principal financial assets are bank and cash balances and trade and other receivables. |
The company's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the related cash flows. |
The credit risk on liquid funds is limited because the counter parties are banks with high credit ratings assigned by international credit-rating agencies. |
The company has no significant concentration of credit risk with exposure spread over a number of customers, who themselves have high credit ratings. |
* Liquidity risk |
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company uses a mixture of long-term and short-term intercompany debt finance. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
* Price risk |
The company has limited exposure to commodity price risk. The company generally purchases goods and services based upon market prices that are established with the vendor as part of the purchase process. The company does not use commodity financial instruments as it deems them unnecessary. |
KEY PERFORMANCE INDICATORS |
2023 | 2022 | Change |
Turnover | £12,451,497 | £11,419,472 | 9.0% |
Depreciation | £45,492 | £44,821 | 1.0% |
Operating profit | £488,666 | £1,459,657 | -66.5% |
Profit after tax | £581,857 | £1,328,633 | -56.2% |
Current assets as % of current liabilities |
242.5% |
289.0% |
-19.2% |
Average number of employees | 175 | 154 | 13.6% |
There have been a number of actions that have been implemented to improve efficiency, product availability and reduce costs. The director considers that Franklin Products Limited has an excellent future and continued in 2024 to consolidate its position as one of Europe's leading manufacturers of aircraft seating. |
ON BEHALF OF THE BOARD: |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The director presents her report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of the manufacture and sale of aircraft seat cushions and covers for the airline industry in the United Kingdom, Europe and overseas markets. |
REVIEW OF THE BUSINESS |
Turnover increased by 8.4% as a result of increased volume across all sectors due to the continuing recovery from the COVID-19 pandemic. |
The company also has a manufacturing branch based in Poland. The results of this branch are included in these financial statements. |
DIVIDENDS |
No dividends were received in 2023 (2022: Nil). No dividends have been declared and paid by the company in 2023 (2022: Nil). |
FUTURE DEVELOPMENTS |
The Director's aim at the start of 2023 was to maintain the policies of the company, while remaining committed to retaining revenue and reducing costs. To become more competitive and to continue to meet the requirements of our customers, the company reluctantly reduced the workforce during 2020 and 2021 as a result of the COVID-19 pandemic and have since added back to headcount in all areas of production and production support areas as the pandemic eases. Opportunities with new and existing customers will always be sought as well as new ways to meet those opportunities. The focus of the company remained on cashflow as a result of the uncertainty caused by COVID-19. The cost saving measures introduced to mitigate declining revenues as a result of the pandemic were successful. With the outlook for the aviation industry beginning to improve, the Director is tasked with balancing a continued level of uncertainty with meeting the needs of its customers. |
DIRECTORS |
Other changes in directors holding office are as follows: |
ENGAGEMENT WITH EMPLOYEES |
The company holds quarterly Town Hall meetings where the company's performance is shared with the employees. This allows employees to see the direct impact that their hard work has on the performance of the company. Employees are also encouraged to give suggestions via a suggestion box on how business activities and surroundings can be improved to make the work environment better. These suggestions are always responded to individually by way of a noticeboard announcement. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is 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 director is 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 director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FRANKLIN PRODUCTS LIMITED |
Opinion |
We have audited the financial statements of Franklin Products Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 Auditors' 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. |
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 director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors 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 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. |
Opinion on other matters prescribed by 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 the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FRANKLIN PRODUCTS LIMITED |
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 Report of the Director. |
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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page five, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FRANKLIN PRODUCTS LIMITED |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
In our process of identifying fraud risks we assessed events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud ("fraud risk factors") to determine how fraud risks are relevant to our audit. Based on the auditing standards we addressed two fraud risks that were relevant to our audit, in relation to revenue recognition and management override of controls. Based upon our analysis of fraud risk factors, we have not identified any additional fraud risks. |
Our audit procedures included an evaluation of the design, implementation as well as the operating effectiveness of internal controls relevant to mitigate these risks. We also performed substantive audit procedures, including detailed testing of high risk journal entries and procedures to satisfy ourselves that revenue has been properly recognised in the financial statements in accordance with financial reporting standards and the Company's accounting policies. Through these procedures, we did not identify any material actual or suspected incidences of fraud. |
We have evaluated facts and circumstances in order to assess laws and regulations relevant to the Company. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience, through discussion with the Directors and other management (as required by auditing standards) and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. |
The potential effect of these laws and regulations on the financial statements varies considerably. |
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including taxation and financial reporting (including related company legislation) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. |
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: |
- Employment legislation, reflecting the Company's workforce |
- Health and safety regulation, reflecting the Company's production, distribution and operating processes |
- Data privacy, reflecting the Company's management of personal and corporate data |
- Environmental regulation, reflecting environmental impact restrictions, waste and contamination related to the Company's distribution and operating processes. |
Auditing standards limit the required audit procedures to identify non-compliance with these regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not identify any material actual or suspected non-compliance in any of the above areas. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FRANKLIN PRODUCTS LIMITED |
We note that our audit is not primarily designed to detect non-compliance with laws and regulations and the Directors and other management are responsible for such internal control as the Directors and other management of the Company determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to errors or fraud, including compliance with laws and regulations. Additionally, owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
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 Report of the Auditors. |
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 a Report of the Auditors 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 |
Chartered Certified Accountants |
& Statutory Auditors |
2 Manor Farm Court |
Old Wolverton Road |
Old Wolverton |
Milton Keynes |
Buckinghamshire |
MK12 5NN |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
STATEMENT OF COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 5 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
OPERATING PROFIT | 7 |
Interest receivable and similar income |
PROFIT BEFORE TAXATION |
Tax on profit | 8 | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
STATEMENT OF FINANCIAL POSITION |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 15 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 16 |
Retained earnings | 17 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the director and authorised for issue on |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2023 |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Tax received |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Increase/(decrease) in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
1,652,015 |
Cash and cash equivalents at end of year |
2 |
1,268,929 |
843,600 |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation |
Depreciation charges |
Loss on disposal of fixed assets |
Finance income | (1,913 | ) | (238 | ) |
534,158 | 1,514,547 |
Decrease/(increase) in stocks | ( |
) |
Decrease/(increase) in trade and other debtors | ( |
) |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 December 2023 |
31/12/23 | 1/1/23 |
£ | £ |
Cash and cash equivalents | 1,268,929 | 843,600 |
Year ended 31 December 2022 |
31/12/22 | 1/1/22 |
£ | £ |
Cash and cash equivalents | 843,600 | 1,652,015 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1/1/23 | Cash flow | At 31/12/23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 843,600 | 425,329 | 1,268,929 |
843,600 | 1,268,929 |
Total | 843,600 | 425,329 | 1,268,929 |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Franklin Products Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | STATEMENT OF COMPLIANCE |
3. | ACCOUNTING POLICIES |
BASIS OF PREPARING THE FINANCIAL STATEMENTS |
The financial statements have been prepared on a going concern basis which assumes that continuing support will be made available by the company's parent company to provide working capital and enable the company to meet its obligations as they fall due. Further details are shown below. |
TURNOVER |
The company's turnover represents the value, excluding sales taxes, of goods and services supplied to customers during the year. A sale is recognised when goods and services have been delivered and future economic benefits are probable. Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, net of discounts and sales taxes. |
TANGIBLE FIXED ASSETS |
Improvements to property | - |
Plant, machinery and office equipment | - |
* Lease ends in 2031. |
Loose tools and moulds |
It is the company's policy to write off expenditure on loose tools and moulds immediately to profit or loss, since individually they are not of any significant value. |
STOCKS |
Stock and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Cost is calculated using the first-in first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition. |
Work in progress includes an additional proportion of relevant overheads dependent on the stage of completion. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
FINANCIAL INSTRUMENTS |
Financial assets including cash at bank and in hand and other debtors are initially measured at transaction price (including transaction costs) and subsequently held at cost, less any impairment. |
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations rather than the the financial instrument's legal form. Financial liabilities including other creditors as well as bank overdrafts are initially measured at transaction price (including transaction costs) and are subsequently held at amortised cost. |
Debt instruments that are payable or receivable within one year are measured at the undiscounted amount of cash or other consideration expected to be paid or received. |
FOREIGN CURRENCIES |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
HIRE PURCHASE AND LEASING COMMITMENTS |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
DEBTORS AND CREDITORS RECEIVABLE/PAYABLE WITHIN ONE YEAR |
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in administrative expenses. |
TAX |
Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. it is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that 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 balance sheet date that are expected to apply to the reversal of timing differences. Deferred tax on non-depreciable tangible fixed assets and investment properties is measured using the rates and allowances that apply to the sale of the asset. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
GOING CONCERN |
COVID-19 has adversely affected the aviation industry in which the Company operates. Global restrictions on international travel have reduced demand for the Company's primary products. Franklin Products Limited took significant steps to ensure its future including the following: |
Franklin Products Limited holds significant cash reserves and has no external financing except for the balance due to its parent company. Franklin Products Inc., the ultimate parent company, has provided a written letter of support to continue to fund the UK operations. The company continues to pay suppliers under agreed credit terms and is up to date with tax payments. |
At the balance sheet date, the company had a net surplus on reserves of £1,794,882. The order book is strong as the aviation industry continues to recover from the effects of the COVID-19 pandemic. The director is therefore of the opinion that the going concern basis remains appropriate. |
4. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In preparing these financial statements, the Directors have made the following judgements: |
* Tangible fixed assets |
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. |
* Impairment of trade receivables |
The company evaluates the amount of allowance for impairment based on available facts and circumstances affecting the collectability of the accounts, including, but not limited to, the length of the Company's relationship with the customers, the customers' current credit status, average age of accounts, collection experience and historical loss experience. The methodology and assumptions used in estimating future cash flows are reviewed regularly by the Company to reduce any differences between loss estimates and actual loss experience. |
* Inventory |
The Company evaluates the amount of allowance for impairment based on available facts and circumstances affecting the inventory balances at the year end. The methodology and assumptions used in determining whether inventory items are impaired is reviewed regularly by the Company to reduce any differences between loss estimates and actual loss experience. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
5. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Rest of Europe | 6,619,802 | 6,248,961 |
Rest of the World | 3,590,641 | 3,145,621 |
6. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
UK | 41 | 30 |
Poland | 134 | 124 |
2023 | 2022 |
£ | £ |
Directors' remuneration |
7. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Loss on disposal of fixed assets |
Auditors' remuneration |
Operating lease rentals |
Exchange losses/(gains) | ( |
) |
The auditors remuneration in 2023 is analysed as: BDO LLP £33,382 (2022: £64,662) and Ad Valorem Audit Services Limited £30,000 (2022: £30,000). |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
8. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Overprovision of tax in |
earlier years | - | (94,587 | ) |
Total current tax |
Deferred tax | ( |
) |
Tax on profit | ( |
) |
UK corporation tax has been charged at 23.52% (2022 - 19%). |
RECONCILIATION OF TOTAL TAX (CREDIT)/CHARGE INCLUDED IN PROFIT AND LOSS |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Depreciation in excess of capital allowances | - |
Utilisation of tax losses | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) |
Other permanent differences | 3 | (411 | ) |
Movement in deferred tax | (211,180 | ) | - |
Total tax (credit)/charge | (91,278 | ) | 131,262 |
The overprovision of corporation tax in earlier years relates to Research and Development claims made in 2022 that were related to the years ended 31 December 2020 and 2021. |
In 2023 the Polish branch exceeded the exemption thresholds for accounting for deferred tax. This has resulted in a deferred tax credit of £211,180 in the statement of comprehensive income. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
9. | TANGIBLE FIXED ASSETS |
Plant, |
machinery | Assets |
Improvements | and office | under |
to property | equipment | construction | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
10. | STOCKS |
2023 | 2022 |
£ | £ |
Stocks |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Prepayments and other debtors |
Tax |
VAT |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Tax |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Amounts owed to group undertakings |
14. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2023 | 2022 |
£ | £ |
In more than five years |
The rent has been guaranteed by Franklin Products Limited's parent company, Franklin Products Inc. |
15. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax | 23,018 | 13,171 |
Deferred tax |
£ |
Balance at 1 January 2023 |
Charge to Statement of Comprehensive Income during year |
Balance at 31 December 2023 |
These all relate to accelerated capital allowances. |
16. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
17. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Profit for the year |
At 31 December 2023 |
18. | PENSION COMMITMENTS |
During the year the company agreed to make contributions to defined contribution schemes amounting to £165,375 (2022 - £98,423). Contributions of £Nil (2022 - £Nil) were outstanding at the balance sheet date. |
FRANKLIN PRODUCTS LIMITED (REGISTERED NUMBER: 03662925) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
19. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
20. | ULTIMATE CONTROLLING PARTY |
The company is a wholly owned subsidiary of Franklin Products Inc., a US registered corporation whose address is 153 Water Street, Torrington CT06790. |