Company registration number 01349963 (England and Wales)
F.T. GEARING SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
F.T. GEARING SYSTEMS LIMITED
COMPANY INFORMATION
Directors
Mr B McElwee
Mr M O'Connell
Mr J Pierce
Company number
01349963
Registered office
Unit 3, Northtown Trading Estate
122-128 North Lane
Aldershot
Hampshire
GU12 4UB
Auditor
Sumer Audit
5 Peveril Court
6-8 London Road
Crawley
West Sussex
RH10 8JE
F.T. GEARING SYSTEMS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
F.T. GEARING SYSTEMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the Strategic Report of F.T. Gearing Systems Limited (the “Company”) for the year ended 30 September 2024.
Review of the business
The business of the company, being that of precision machining and gear manufacturing specialists, has not changed during the period.
The results for the financial year ended 30 September 2024 are set out in the Statement of Comprehensive Income. Sales for the financial year amounted to £16,058k (2023: £13,397k) generating a profit before taxation of £5,252k (2023: £3,610k).
2024 has shown strong growth over 2023 as we continue to professionalise and transform our organisation.
Financial key performance indicators
The key performance indicators that the directors monitor regarding financial performance are:
Principal risks and uncertainties
Management of risk remains critical for the company in delivering growth plans. Given the nature of the company’s business, the principal risks and uncertainties are economic, operational and financial risks, and the policies and actions put in place to mitigate these risks are set out below.
Economic Risk
The economic risk is based upon the risk of inflation, a downturn in the economy and the slowing of demand in the company’s end market sectors, and the effect these would have on the business’ marketplace. These are managed by undertaking regular and frequent assessments of the risks faced using both macro market indicators and micro stakeholder information on the market, enabling the directors to take mitigating actions.
Operational Risk
Being able to source all raw materials and to receive them on time and at the agreed price is a fundamental requirement of the Company’s business.
Financial Risk
The business continues to see cost inflation challenges, specifically in terms of raw materials, power costs and energy intensive sub-contract work.
Whilst the company does not have any debt, its immediate parent undertaking funds its debt financing costs from dividends paid by the company. The company is, therefore, exposed to movements in Bank of England’s Base Rate as the parent undertaking’s cost of debt servicing is based upon this metric.
With regards to credit risk, the company’s principal financial assets are bank balances and trade receivables. The company’s credit risk is primarily attributable to its trade receivables. The amounts presented in the Statement of Financial Position are net of allowances for doubtful receivables.
Development and performance
Customer retention remains high and the company is cautiously optimistic that the pipeline of commercial enquiries from strategically focussed markets will deliver further growth into 2025 and beyond.
F.T. GEARING SYSTEMS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
Other performance indicators
Apart from those measures identified above in the business review, the directors are of the opinion that no further inclusion of financial key performance indicators is necessary for an understanding of the development, performance or position of the Company’s business.
Mr J Pierce
Director
11 November 2024
F.T. GEARING SYSTEMS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Principal activities
The principal activity of the company continued to be that of precision machining and gear manufacturing specialists.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £2,836,562 (2023 - £3,698,404). The directors do not recommend payment of a further 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 G D Fitzgerald
(Resigned 29 February 2024)
Mr N Fitzgerald
(Resigned 29 February 2024)
Mr B McElwee
Mr M O'Connell
Mr J Pierce
Auditor
The auditor, Sumer Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr J Pierce
Director
11 November 2024
F.T. GEARING SYSTEMS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
F.T. GEARING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF F.T. GEARING SYSTEMS LIMITED
- 5 -
Opinion
We have audited the financial statements of F.T. Gearing Systems Limited (the 'company') for the year ended 30 September 2024 which comprise 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 30 September 2024 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. 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.
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.
F.T. GEARING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF F.T. GEARING SYSTEMS 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act.
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of the board and senior management;
Assessment of matters recorded on the company’s health & safety incident register;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to depreciation policies; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
F.T. GEARING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF F.T. GEARING SYSTEMS LIMITED
- 7 -
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Tony Summers BA FCA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
12 November 2024
Chartered Accountants
Statutory Auditor
Crawley
Sumer Audit is the trading name of Sumer Auditco Limited
F.T. GEARING SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
16,057,778
13,396,990
Cost of sales
(7,842,194)
(7,088,725)
Gross profit
8,215,584
6,308,265
Administrative expenses
(2,989,880)
(2,726,492)
Other operating income
8,715
8,715
Operating profit
4
5,234,419
3,590,488
Interest receivable and similar income
33,390
30,738
Interest payable and similar expenses
(16,272)
(10,838)
Profit before taxation
5,251,537
3,610,388
Tax on profit
6
(734,629)
(562,168)
Profit for the financial year
4,516,908
3,048,220
The profit and loss account has been prepared on the basis that all operations are continuing operations.
F.T. GEARING SYSTEMS LIMITED
BALANCE SHEET
AS AT 30 SEPTEMBER 2024
30 September 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
8
5,767,596
4,764,844
Current assets
Stocks
9
4,211,980
2,803,628
Debtors
10
3,766,627
2,823,957
Cash at bank and in hand
2,410,048
3,191,499
10,388,655
8,819,084
Creditors: amounts falling due within one year
11
(2,805,448)
(2,141,930)
Net current assets
7,583,207
6,677,154
Total assets less current liabilities
13,350,803
11,441,998
Creditors: amounts falling due after more than one year
12
(97,202)
(66,136)
Provisions for liabilities
Provisions
14
153,352
112,472
Deferred tax liability
15
1,185,200
1,028,687
(1,338,552)
(1,141,159)
Net assets
11,915,049
10,234,703
Capital and reserves
Called up share capital
17
7,101
7,101
Share premium account
221,413
221,413
Capital redemption reserve
2,900
2,900
Profit and loss reserves
11,683,635
10,003,289
Total equity
11,915,049
10,234,703
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 11 November 2024 and are signed on its behalf by:
Mr J Pierce
Director
Company registration number 01349963 (England and Wales)
F.T. GEARING SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 10 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 October 2022
7,100
2,900
10,653,473
10,663,473
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
-
3,048,220
3,048,220
Issue of share capital
17
1
221,413
-
-
221,414
Dividends
-
-
-
(3,698,404)
(3,698,404)
Balance at 30 September 2023
7,101
221,413
2,900
10,003,289
10,234,703
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
-
4,516,908
4,516,908
Dividends
-
-
-
(2,836,562)
(2,836,562)
Balance at 30 September 2024
7,101
221,413
2,900
11,683,635
11,915,049
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
1
Accounting policies
Company information
F.T. Gearing Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 3, Northtown Trading Estate, 122-128 North Lane, Aldershot, Hampshire, GU12 4UB.
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 £1.
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: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered relevant information, including the company’s principal risks and uncertainties, the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Assets under construction are stated at cost. These assets are not depreciated until they are brought into use at which point the assets are transferred out of assets under construction and into the appropriate category of asset.
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 12 -
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:
Improvements to property
10% on cost
Plant and equipment
Straight line over 3-25 years
Fixtures, fittings and office equipment
Straight line of 3-10 years
Motor vehicles
25% on diminishing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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).
1.6
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. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include deposits held at call with banks.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
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.
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including trade creditors and other creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.
1.9
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.
1.10
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.
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.
1.11
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.
1.12
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.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
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.
1.16
Foreign exchange
Transactions in currencies other than 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets are sensitive to changes in the estimated useful economic lives of the assets. This is reassessed annually and amended when necessary to reflect current estimates, based on technological advancement, economic utilisation, physical condition and residual values of the assets. See note 8 for the carrying amount and note 1.4 in the accounting policy section for the useful economic lives of different classes of assets.
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 15 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Manufacture of specialist components
16,057,778
13,396,990
Turnover analysed by geographical market
United Kingdom
15,709,321
13,158,347
Europe
273,202
236,075
Rest of world
75,255
2,568
16,057,778
13,396,990
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(5,452)
1,076
Government grants
(8,715)
(8,715)
Fees payable to the company's auditor for the audit of the company's financial statements
18,350
45,545
Depreciation of owned tangible fixed assets
546,826
464,783
Depreciation of tangible fixed assets held under finance leases
1,988
-
Impairment of owned tangible fixed assets
-
229,201
(Profit)/loss on disposal of tangible fixed assets
(8,462)
141,753
Operating lease charges
364,117
282,348
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration
8
9
Production
88
79
Total
96
88
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
5,242,867
4,764,863
Social security costs
561,446
545,593
Pension costs
209,093
102,883
6,013,406
5,413,339
6
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
578,116
484,300
Tax relating to prior year adjustments recognised in profit or loss
181,981
Total current tax
578,116
666,281
Deferred tax
Origination and reversal of timing differences
156,513
(104,113)
Total tax charge
734,629
562,168
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:
2024
2023
£
£
Profit before taxation
5,251,537
3,610,388
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.00%)
1,312,884
794,285
Tax effect of expenses that are not deductible in determining taxable profit
362
Change in unrecognised deferred tax assets
(9,200)
6,600
Adjustments in respect of prior years
181,981
Group relief
(568,948)
(402,002)
Permanent capital allowances in excess of depreciation
(4,330)
Depreciation on assets not qualifying for tax allowances
293
150
Rounding differences
(400)
1,007
Difference between current tax and deferred tax rates
(15,885)
Taxation charge for the year
734,629
562,168
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 17 -
7
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2024
2023
£
£
In respect of:
Property, plant and equipment
229,201
Recognised in:
Administrative expenses
-
229,201
8
Tangible fixed assets
Improvements to property
Assets under construction
Plant and equipment
Fixtures, fittings and office equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 October 2023
7,449,145
138,504
15,000
7,602,649
Additions
255,975
220,631
839,869
231,633
3,800
1,551,908
Disposals
(32,723)
(32,723)
At 30 September 2024
255,975
220,631
8,289,014
337,414
18,800
9,121,834
Depreciation and impairment
At 1 October 2023
2,756,528
69,308
11,969
2,837,805
Depreciation charged in the year
1,432
507,914
38,156
1,312
548,814
Eliminated in respect of disposals
(32,381)
(32,381)
At 30 September 2024
1,432
3,264,442
75,083
13,281
3,354,238
Carrying amount
At 30 September 2024
254,543
220,631
5,024,572
262,331
5,519
5,767,596
At 30 September 2023
4,692,617
69,196
3,031
4,764,844
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Fixtures, fittings and office equipment
47,667
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 18 -
9
Stocks
2024
2023
£
£
Raw materials and consumables
488,780
157,780
Work in progress
3,059,173
2,259,885
Finished goods and goods for resale
664,027
385,963
4,211,980
2,803,628
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,210,055
2,663,992
Other debtors
159,507
Prepayments and accrued income
397,065
159,965
3,766,627
2,823,957
11
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
13
8,031
Trade creditors
940,076
671,191
Corporation tax
328,338
212,300
Other taxation and social security
896,265
853,712
Other creditors
46,020
90,658
Accruals and deferred income
586,718
314,069
2,805,448
2,141,930
12
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
13
39,781
Other creditors
57,421
66,136
97,202
66,136
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 19 -
13
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
8,031
In two to five years
39,781
47,812
Finance lease payments represent rentals payable by the company for certain items of plant and machinery.
14
Provisions for liabilities
2024
2023
£
£
Dilapidations provision
153,352
112,472
Movements on provisions:
Dilapidations provision
£
At 1 October 2023
112,472
Additional provisions in the year
40,880
At 30 September 2024
153,352
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
1,185,200
1,028,687
2024
Movements in the year:
£
Liability at 1 October 2023
1,028,687
Charge to profit or loss
156,513
Liability at 30 September 2024
1,185,200
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
15
Deferred taxation
(Continued)
- 20 -
The directors have considered the deferred tax liabilities notes above and concluded that it is not possible to state the estimated liabilities which will reverse within the next 12 months. This is due to the level of reversal being dependant on events which are not yet known.
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
209,093
102,883
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
7,101
7,101
7,101
7,101
The company has one class of ordinary shares which carries one vote, and full rights to dividends and capital distribution, including on winding up.
18
Financial commitments, guarantees and contingent liabilities
The company has a fixed and floating charge over all of its assets, in relation to a loan facility granted to the company's immediate parent company, Gear Bidco Limited.
19
Operating lease commitments
Lessee
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:
2024
2023
£
£
Within one year
464,734
240,333
Between two and five years
1,180,917
860,469
In over five years
598,900
32,000
2,244,551
1,132,802
F.T. GEARING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
20
Related party transactions
During the period, the company paid rental charges of £150,319 (2023 - £148,250) to other related parties and an amount of £103,335 (2023 - £85,000) was owed to other related parties in regards to rent included within other creditors.
During the year the company made sales of £75,255 (2023 - £2,568) to G.S. Precision, Inc, At the year end £75,255 (2023 - £nil) was owed to the company and is included within trade debtors.
During the year the company made purchases of £167,930 (2023 - £nil) from G.S Precision, Inc. At the year end the company owed £2,568 (2023 - £nil) included within trade creditors.
Included within prepayments at the year end, £155,140 (2023 - £nil) relates to management charges raised by G.S Precision, Inc for the 2025 financial year.
21
Ultimate controlling party
The intermediate parent undertaking is Gear Bidco Limited, a company incorporated in the United Kingdom. The registered office is Unit 3 Northtown Trading Estate, 122-128 North Lane, Aldershot, Hampshire, GU12 4UB.
The results of this company are included within the consolidated financial statements of Gear Holdco Limited, copies of which are available from Companies House.
The ultimate parent company is Precision Ultimate Holdings LLC (Delaware), which is incorporated in the United States of America.
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