REGISTERED NUMBER: |
Strategic Report, Director's Report and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Flexitallic UK Ltd |
REGISTERED NUMBER: |
Strategic Report, Director's Report and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Flexitallic UK Ltd |
Flexitallic UK Ltd (Registered number: 10856270) |
Contents of the Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Director's Report | 4 |
Report of the Independent Auditors | 7 |
Statement of Comprehensive Income | 10 |
Statement of Financial Position | 11 |
Statement of Changes in Equity | 12 |
Notes to the Financial Statements | 13 |
Flexitallic UK Ltd |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
INDEPENDENT AUDITORS: |
Chartered Accountants and |
Statutory Auditor |
25 Hosier Lane |
London |
EC1A 9LQ |
Flexitallic UK Ltd (Registered number: 10856270) |
Strategic Report |
for the Year Ended 31 December 2023 |
This Strategic Report has been prepared solely to provide additional information to shareholders to assess the company's strategies and the potential for those strategies to succeed. The Strategic Report contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward -looking information. The directors, in preparing this Strategic Report, have complied with s414C of the Companies Act 2006. |
REVIEW OF BUSINESS |
The company generates value to customers and shareholders through the manufacture and delivery of specialist gaskets and sheet materials for use in the oil and gas upstream and downstream sectors, petrochemical and power generation industries. |
The board monitors progress of the company's performance against the agreed Business Plan for the financial year with specific reference to Order Intake, Turnover, Gross Margin, EBITDA, Working Capital and Free Cash targets as demanded by the Plan. |
2023 saw excellent sales and EBITDA through-out the year and recorded a healthy £9m + of EBITDA in 2023. Headcount and fixed costs continue to be reviewed to ensure correct level of support for the business to ensure maximisation of EBITDA and cash. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The management of the business and the execution of the strategy are subject to a number of risks. The key business risks and uncertainties affecting the company are considered to be: |
Competition |
The company operates in a global competitive market and seeks to minimise this risk through focusing on the provision of specialist gasket and sheet material with excellent customer service. |
Supply chain |
Risks are mitigated through continuous negotiation with a wide supplier base. |
Brexit |
Brexit has had minimal impact on the entity. |
Ukrainian-Russian conflict |
The directors are aware of the Ukrainian-Russian conflict, and this has had no impact on the company. |
SECTION 172(1) STATEMENT |
The directors are well aware of their duty under s.172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders and other stakeholders; including the following key matters: |
- Strategic decisions are made in close conjunction with the Flexitallic group to ensure they fully support the interests of shareholders, employees and clients; |
- Ensuring a high degree of integrity in dealings with employees, customers and suppliers. This is closely monitored against internal procedures and is reflected in both the long service of a number of senior staff across all subsidiaries and through long-standing relationships with clients; |
- Working closely with its employees through its employee engagement groups to ensure employee views and opinions are considered in developing key strategies and decisions; |
- Through its corporate activities and using its employee engagement groups the company and the subsidiaries seeks to maximise its contribution to its local communities and environment; and |
- A key objective of the company and its subsidiaries being to assist customers harness technological change to successfully deliver innovation which supports fostering long term relationships, improved products for the global economy and increased opportunity for staff. |
Flexitallic UK Ltd (Registered number: 10856270) |
Strategic Report |
for the Year Ended 31 December 2023 |
KEY PERFORMANCE INDICATORS |
The Board monitors the progress of the UK Group's performance against prior year for the financial year 2023 with specific reference to the achievement of Order Intake, Turnover, Gross Margin & EBITDA targets. In 2023 the performance against these KPIs were as follows: |
2023 Actual | 2022 Actual |
£'000s | £'000s |
Order intake | 26,937 | 31,392 |
Turnover | 40,537 | 40,367 |
Gross margin | 15,528 | 14,302 |
EBITDA | 9,213 | 8,255 |
The board considers the employees number a key non-financial performance indicator. The company employed 243 employees in the current year (2022: 237). |
ON BEHALF OF THE BOARD: |
Flexitallic UK Ltd (Registered number: 10856270) |
Director's Report |
for the Year Ended 31 December 2023 |
The director presents his report with the financial statements of the company for the year ended 31 December 2023. |
Certain information required to be disclosed in the Directors' Report is considered to be of strategic importance to the company and therefore disclosure is given in the Strategic Report. The specific items disclosed in the Strategic Report are: |
- Review of business |
- Principal risks and uncertainties |
- Key performance indicators |
- Section 172(1) statement |
PRINCIPAL ACTIVITY |
The principal activity of the company during the year was the delivery of high value gaskets and sheet sealing materials for use in the oil and gas upstream and downstream sectors, petrochemical and power generation industries. |
DIVIDENDS |
The profit for the year, after taxation, amounted to £3,932,065. No dividends will be distributed for the year ended 31 December 2023 (2022 - £nil). |
RESEARCH AND DEVELOPMENT |
The Company has a research and development team and laboratory at its site in Cleckheaton UK. Flexitallic's R&D team is focused on bringing new, highly engineered products to the market, as well as a software that will serve as a platform for customer joint specifications across sites to enable flange management and monitoring. |
FUTURE DEVELOPMENTS |
With a strong position and high market share in the UK, growth plans are focussed on under-served markets in Europe and other Global opportunities. Additional focus and initiatives are underway in key European markets and sales offices and service centres are being developed to meet demand. |
DIRECTOR |
POLITICAL DONATIONS |
No political donations were made in the current and previous periods. |
INDEMNITY PROVISION |
The company had no qualifying indemnity provision in the current and previous periods. |
FINANCIAL RISK MANAGEMENT |
The company's operations expose it to a variety of financial risks with the significant ones being currency risk, liquidity risk and credit risk. The company has in place a risk management programme that seeks to limit the adverse effects of these risks on the financial performance of the company. |
Currency risk |
The company makes some of its sales and purchases in currencies other than GBP, primarily US Dollars and Euros. This is minimised through matching the time of settlement so as to eliminate, as far as possible, currency exposure. |
Liquidity and cash flow risk |
At 31 December 2023 the cash position was £3,125k (2022 - £2,922k). The available cash is managed by the treasury function which reports to the CFO who decides the optimum use of available cash in accordance with the directors' mandate. |
Credit risk |
Credit risk is managed through setting credit limits based on payment history and third party credit reference. |
GREENHOUSE GAS AND ENERGY CONSUMPTION |
A key target for the company is to minimise its environmental impact and, in particular, to reduce where possible its energy usage and CO2 emissions. From the production line to our support functions, reducing our carbon footprint, lowering the consumption of energy, and limiting the creation of waste are goals that we work actively to achieve. |
Flexitallic UK Ltd (Registered number: 10856270) |
Director's Report |
for the Year Ended 31 December 2023 |
The annual quantity of emissions in tonnes of carbon dioxide equivalent resulting from activities for which the company is responsible, measured in TCO2e, is as follows: |
2023 |
- the combustion of gas | 2020.17 |
- the consumption of fuel for the purposes of transport | 76.87 |
- the purchase of electricity by the company for its own use | 817.11 |
The annual quantity of energy consumed from activities for which the company is responsible, measured in kWh, is as follows: |
2023 |
- the combustion of gas | 11,033,982 |
- the consumption of fuel for the purposes of transport | 319,658 |
The annual quantity of energy consumed resulting from the purchase of electricity by the company for its own use, including for the purposes of transport, was 3,945,971 kWh. |
2023 |
Carbon intensity, TCO2e/Tonne produced | 1.9127 |
The information is based on the SECR data which is a government regulatory framework (Streamlined Energy and Carbon Reporting). |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Directors' 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 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. |
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 he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Flexitallic UK Ltd (Registered number: 10856270) |
Director's Report |
for the Year Ended 31 December 2023 |
AUDITORS |
The auditors, Constantin, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Flexitallic UK Ltd |
Report on the audit of the financial statements |
Opinion |
In our opinion the financial statements of Flexitallic UK Limited (the 'company'): |
- 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, including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland"; and |
- have been prepared in accordance with the requirements of the Companies Act 2006. |
We have audited the financial statements which comprise: |
- the statement of comprehensive income; |
- the statement of financial position; |
- the statement of changes in equity; and |
- the related notes 1 to 21 which include the statement of 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). |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor'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 Financial Reporting Council's (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. |
Other information |
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. |
Report of the Independent Auditors to the Members of |
Flexitallic UK Ltd |
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 for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. |
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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. |
We considered the nature of the company's industry and its control environment, and reviewed the company's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company's business sector. |
We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that: |
- had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act, pensions legislation, tax legislation; and |
- do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. |
We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. |
As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our procedures performed to address it are described below: |
- Cut-off of turnover due to varying timing of transfer of risks and rewards of the revenue transactions. |
We addressed this risk by performing the following procedures: |
- Obtaining an understanding of management's processes and controls in relation to ensuring the correct recognition of revenue. This includes performing the design and implementation of relevant controls; |
- Performed analytical procedures to identify any unusual relationships that may indicate an error in the revenue recognised for the year; and |
- Selecting a sample of revenue transactions before and after the year end and verifying the terms of the services to the underlying customer agreements in order to validate the timing of revenue recognition. |
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business. |
Report of the Independent Auditors to the Members of |
Flexitallic UK Ltd |
In addition to the above, our procedures to respond to the risks identified included the following: |
- reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; |
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
- enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and |
- reading minutes of meetings of those charged with governance. |
Report on other legal and regulatory requirements |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- the information given in the Strategic Report and 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. |
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 any material misstatements in the Strategic Report or the Directors' Report. |
Matters on which we are required to report by exception |
Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion: |
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- the financial statements are not in agreement with the accounting records and returns; or |
- certain disclosures of directors' remuneration specified by law are not made; or |
- we have not received all the information and explanations we require for our audit. |
We have nothing to report in respect of these matters. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
For and on behalf of |
Chartered Accountants and |
Statutory Auditor |
25 Hosier Lane |
London |
EC1A 9LQ |
Flexitallic UK Ltd (Registered number: 10856270) |
Statement of Comprehensive |
Income |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
REVENUE | 3 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Distribution costs | ( |
) | ( |
) |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT/(LOSS) | 5 | ( |
) |
Interest receivable and similar income | 8 |
5,252,681 | 1,168,434 |
Interest payable and similar expenses | 9 | ( |
) | ( |
) |
Other finance costs | 20 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 10 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME |
Actuarial loss on pension scheme | ( |
) |
Deferred tax charge | ( |
) |
Income tax relating to components of other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Flexitallic UK Ltd (Registered number: 10856270) |
Statement of Financial Position |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Property, plant and equipment | 12 |
CURRENT ASSETS |
Inventories | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) | ( |
) |
PENSION LIABILITY | 20 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the director and authorised for issue on |
Flexitallic UK Ltd (Registered number: 10856270) |
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 |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Flexitallic UK Ltd is a |
The principal activity of the company during the year continued to be the delivery of high value gaskets and sheet sealing materials for use in the oil and gas upstream and downstream sectors, petrochemical and power generation industries. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going concern |
The directors, having considered the current trading prospects, identifiable risks, working capital requirements and the availability of finance, are of the opinion that the company is a going concern. The directors took into account the impact of Brexit and the Russian Ukrainian conflict in making their assessment of the going concern. The accounts have been prepared on this basis. |
Presentational currency |
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 £. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 33.7. |
Significant judgements and estimates |
Critical accounting judgements and key sources of estimation uncertainty: |
In the application of the Company’s accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
Critical judgements in applying the Company’s accounting policies: |
There are no other critical judgements except for those related to estimation uncertainty which are detailed below. |
Key source of estimation uncertainty - impairment of intangible assets: |
Determining whether intangible assets are impaired requires an estimation of their value in use to the Company. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the intangible asset and a suitable discount rate in order to calculate present value. |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Revenue |
Revenue is the amount derived from the provision of goods and services, stated after trade discounts, other sales taxes and net of VAT. Revenue is recognised upon delivery of goods to the customer. |
Intangible assets |
Goodwill is the difference between amounts paid on the acquisition of a business and the fair value of the identifiable assets and liabilities. It is amortised to the Profit and loss account over its estimated economic life. |
Amortisation is provided at the following rates: |
Goodwill | - 5 years |
Customer relationships | - 5 years |
Computer software | - 3 years |
Property, plant and equipment |
Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases: |
Leasehold property improvements | - Over the remaining lease term |
Plant and machinery | - 3 - 10 years |
Fixtures, fittings and equipment | - 3 - 5 years |
Assets under construction | - Not depreciated |
Motor vehicles | - 4 years |
Inventories |
Inventories and work in progress are valued at the lower of cost and estimated selling price less costs to complete and sell. |
Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
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. |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
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 the profit and loss account in the period to which they relate. |
The company also operates a defined benefit pension scheme which was closed to further accrual on 6 April 2015. Scheme assets are measured at fair value. Scheme liabilities are measured on an actuarial basis using the projected unit method and are discounted at appropriate high quality corporate bond rates. The net surplus or deficit, adjusted for deferred tax, is presented separately from other net assets on the balance sheet. A net surplus is recognised only to the extent that it is recoverable by the company. The current service costs and costs from settlements and curtailments are charged against operating profit. Past service costs are spread over the period until the benefit increases vest. Interest on the scheme liabilities and the expected return on scheme assets are included net in other finance expense. Actuarial gains and losses are reported in the statement of total recognised gains and losses. |
Provisions |
Provisions are recognised when the company has a present obligation as a result of a past event, it is probable that a transfer of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. |
Financial instruments |
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties and loans to related parties. |
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. 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. |
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. |
Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party. |
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
3. | REVENUE |
The revenue and profit before taxation are attributable to the one principal activity of the company. |
An analysis of revenue by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
Rest of the World | 16,210,791 | 17,320,490 |
4. | 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 |
Direct manufacturing | 118 | 118 |
Indirect manufacturing | 29 | 28 |
Sales, administration and finance | 96 | 91 |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
5. | OPERATING PROFIT/(LOSS) |
The operating profit (2022 - operating loss) is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Operating leases |
Depreciation - owned assets |
Loss on disposal of fixed assets |
Goodwill amortisation |
Computer software amortisation |
Foreign exchange differences | ( |
) |
6. | AUDITORS' REMUNERATION |
2023 | 2022 |
£ | £ |
Fees payable to the company's auditors and their associates for the audit of the company's financial statements |
52,000 |
47,250 |
Fees payable to the company's auditors and their associates for other | services: |
The auditing of accounts of any associate of the company |
7. | EXCEPTIONAL ITEMS |
2023 | 2022 |
£ | £ |
Bridgepoint charges | 135,305 | 136,122 |
Other costs | 740,297 | 771,221 |
875,602 | 907,343 |
8. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2023 | 2022 |
£ | £ |
Bank interest receivable |
Interest receivable from group companies |
Other interest received |
9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Interest payable to group companies |
Other interest payable |
Hire purchase interest |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Adjustments in respect of prior periods | (300,319 | ) | (239,359 | ) |
Total current tax | ( |
) |
Deferred tax: |
Origination and reversal of timing differences | 1,194,754 | 181,306 |
Adjustment in respect of previous periods | 60,804 | 67,599 |
Effect of changes in tax rates | 75,151 | 57,254 |
Total deferred tax |
Tax on profit |
UK corporation tax has been charged at 23.52% . |
Reconciliation of total tax 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: |
Expenses not deductible for tax purposes |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Effects of group relief/other reliefs | ( |
) |
Tax rate changes |
Total tax charge | 1,030,390 | 550,703 |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial loss on pension scheme | ( |
) | - | (433,000 | ) |
Deferred tax charge | - | 108,250 |
(324,750 | ) | - | (324,750 | ) |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | TAXATION - continued |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial gain on pension scheme | - | 1,471,000 |
Deferred tax charge | ( |
) | - | (367,750 | ) |
1,103,250 | - | 1,103,250 |
Factors That May Affect Future Tax Charges |
Finance Act 2021, which was substantively enacted on 24 May 2021, has enacted an increase in the UK corporation tax main rate to 25% from 1 April 2023. |
As this rate change had been substantively enacted before the balance sheet date, the closing deferred tax assets and liabilities have been calculated at 25%, on the basis that this is the rate at which those assets and liabilities are expected to unwind. |
11. | INTANGIBLE FIXED ASSETS |
Computer |
Goodwill | software | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
12. | PROPERTY, PLANT AND EQUIPMENT |
Assets |
Leasehold | under | Plant and |
improvements | construction | machinery |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) |
Reclassification/transfer |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
13. | INVENTORIES |
2023 | 2022 |
£ | £ |
Raw materials | 1,999,153 | 1,700,743 |
Work in progress |
Finished goods |
14. | DEBTORS |
2023 | 2022 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Tax |
VAT |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Amounts owed by group undertakings |
Aggregate amounts |
£13,455,487, £1,075,141 and £1,728,761 (2022 - £14,508,290, £1,068,703 and £2,345,916) of amounts owed by group undertakings are interest bearings at 10%, SONIA (Sterling Overnight Index Average) which replaced GBP LIBOR, and 8.64% respectively. They are unsecured and repayable on demand. The remainder is unsecured, repayable on demand and interest free. |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Hire purchase contracts (see note 17) |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
£1,525,904, £1,514,874 and £1,811,206 of amounts owed to group undertakings are interest bearing at LIBOR plus 3%, SONIA (Sterling Overnight Index Average) which replaced GBP LIBOR and 8.7% respectively (2022 - £1,438,541, £1,449,887 and £1,809,370). They are unsecured and repayable on demand. The remainder is unsecured, repayable on demand and interest free. |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Hire purchase contracts (see note 17) |
Other creditors |
Other creditors above relates to a provision for treatment that will be required on land due to leakage from Toluene tanks. |
17. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
18. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax |
Accelerated capital allowances |
Other timing differences | (8,578 | ) | (8,063 | ) |
Defined benefit pension plan | (132,750 | ) | (237,750 | ) |
Losses | (55,180 | ) | - |
1,450,024 | 227,565 |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
18. | PROVISIONS FOR LIABILITIES - continued |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Charge to Statement of Comprehensive Income during year |
Deferred tax charged in OCI | (108,250 | ) |
Prior year adjustment | 60,804 |
Balance at 31 December 2023 |
2023 | 2022 |
£ | £ |
Fixed asset timing differences | 1,646,532 | 473,378 |
Short term timing differences | (141,328 | ) | (245,813 | ) |
Losses | (55,180 | ) | - |
1,450,024 | 227,565 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary shares | £1 | 4 | 4 |
20. | EMPLOYEE BENEFIT OBLIGATIONS |
The scheme was established on 1 February 1998 and the scheme's initial assets comprised a transfer payment from the T&N Retirement Benefit Scheme (1989) to cover the value of benefits granted in the scheme to the initial members in respect of pensionable service completed up to 31 January 1998. |
The latest actuarial valuation of the scheme was carried out as at 5 April 2021 by independent professionally qualified consulting actuaries using the projected unit method. |
The company has taken note of the Virgin Media Limited case heard by the High Court which, in the case of plan amendments, requires a certificate be provided showing that the changes made comply with applicable laws. Plans cannot be amended if no such certificate can be provided. The company is currently analysing the potential risks to its funds arising from this case law. It is unable to quantify the related impact of this decision (if any) at the reporting date. |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
20. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in profit or loss are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Current service cost |
Net interest from net defined benefit liability | 25,000 | 52,000 |
Past service cost |
Administration costs |
165,000 | 263,000 |
Actual return on plan assets | ( |
) |
Changes in the present value of the defined benefit obligation are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening defined benefit obligation |
Interest cost |
Changes to financial assumptions | 235,000 | (11,955,000 | ) |
Benefits paid | ( |
) | ( |
) |
Loss on liabilities | 476,000 | 1,233,000 |
Changes to demographic assumptions | (155,000 | ) | (627,000 | ) |
Changes in the fair value of scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening fair value of scheme assets |
Contributions by employer |
Administration costs | (140,000 | ) | (211,000 | ) |
Interest on assets | 977,000 | 571,000 |
Return on assets less interest | ( |
) |
Benefits paid | (970,000 | ) | (1,408,000 | ) |
Flexitallic UK Ltd (Registered number: 10856270) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
20. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in other comprehensive income are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Actuarial gains/(losses) | ( |
) |
(433,000 | ) | 1,471,000 |
The major categories of scheme assets as a percentage of total scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
Equities | 49% | 47% |
Cash | 1% | - |
LDI | 35% | 37% |
Sterling liquidity | 15% | 16% |
100% | 100% |
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages): |
2023 | 2022 |
Discount rate |
Future pension increases |
Inflation RPI | 3.35% | 3.40% |
Inflation CPI | 2.95% | 3.00% |
Mortality - Male currently aged 45 - 21.7 years (2022 - 21.8 years) |
Mortality - Female currently aged 45 - 24.4 years (2022 - 24.5 years) |
Mortality - Male currently aged 65 - 20.4 years (2022 - 20.5 years) |
Mortality - Female currently aged 65 - 22.9 years (2022 - 23.1 years) |
Defined contribution scheme |
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account and amounted to £388,818 (2022 - £375,733). At the statement of financial position date £34,311 (2022 - £32,253) of employers pension contributions were unpaid. |
21. | ULTIMATE CONTROLLING PARTY |
The company's immediate parent undertaking and controlling party is Novus Finance Ltd, a company incorporated in England and Wales and owning all the shares. |
The company's ultimate parent undertaking and controlling party is Bridgepoint. |
Flexitallic S.à.r.l. is the parent undertaking of the smallest and largest group of undertakings to consolidate these financial statements at 31 December 2023. The consolidated financial statements of Flexitallic S.à.r.l. are available from 6B, rue du Fort Niedergrünewald, L-2226 Luxembourg, Grand Duchy of Luxembourg R.C.S. Luxembourg B 267.508. |