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REGISTERED NUMBER: 10856270 (England and Wales)















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: M N Horton



REGISTERED OFFICE: Scandinavia Mill
Hunsworth Lane
Cleckheaton
West Yorkshire
BD19 4LN



REGISTERED NUMBER: 10856270 (England and Wales)



SENIOR STATUTORY AUDITOR: Peter Smith FCA



INDEPENDENT AUDITORS: Constantin
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:





M N Horton - Director


14 November 2024

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
M N Horton held office during the whole of the period from 1 January 2023 to the date of this report.

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:





M N Horton - Director


14 November 2024

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.




Peter Smith FCA (Senior Statutory Auditor)
For and on behalf of Constantin
Chartered Accountants and
Statutory Auditor
25 Hosier Lane
London
EC1A 9LQ

14 November 2024

Flexitallic UK Ltd (Registered number: 10856270)

Statement of Comprehensive
Income
for the Year Ended 31 December 2023

2023 2022
Notes £    £   

REVENUE 3 40,536,890 40,367,158

Cost of sales (23,489,682 ) (24,665,071 )
GROSS PROFIT 17,047,208 15,702,087

Distribution costs (5,492,812 ) (5,286,155 )
Administrative expenses (7,441,625 ) (10,472,522 )
OPERATING PROFIT/(LOSS) 5 4,112,771 (56,590 )

Interest receivable and similar income 8 1,139,910 1,225,024
5,252,681 1,168,434

Interest payable and similar expenses 9 (265,226 ) (196,928 )
Other finance costs 20 (25,000 ) (52,000 )
PROFIT BEFORE TAXATION 4,962,455 919,506

Tax on profit 10 (1,030,390 ) (550,703 )
PROFIT FOR THE FINANCIAL YEAR 3,932,065 368,803

OTHER COMPREHENSIVE INCOME
Actuarial loss on pension scheme (433,000 ) 1,471,000
Deferred tax charge 108,250 (367,750 )
Income tax relating to components of other
comprehensive income

-

-
OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME TAX

(324,750

)

1,103,250
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

3,607,315

1,472,053

Flexitallic UK Ltd (Registered number: 10856270)

Statement of Financial Position
31 December 2023

2023 2022
Notes £    £   
FIXED ASSETS
Intangible assets 11 51,517 71,548
Property, plant and equipment 12 14,446,725 8,788,538
14,498,242 8,860,086

CURRENT ASSETS
Inventories 13 5,049,312 4,940,591
Debtors 14 34,477,556 33,862,488
Cash at bank and in hand 3,124,922 2,921,836
42,651,790 41,724,915
CREDITORS
Amounts falling due within one year 15 (15,163,076 ) (13,239,321 )
NET CURRENT ASSETS 27,488,714 28,485,594
TOTAL ASSETS LESS CURRENT
LIABILITIES

41,986,956

37,345,680

CREDITORS
Amounts falling due after more than one
year

16

(928,039

)

(696,537

)

PROVISIONS FOR LIABILITIES 18 (1,450,024 ) (227,565 )

PENSION LIABILITY 20 (531,000 ) (951,000 )
NET ASSETS 39,077,893 35,470,578

CAPITAL AND RESERVES
Called up share capital 19 4 4
Retained earnings 39,077,889 35,470,574
SHAREHOLDERS' FUNDS 39,077,893 35,470,578

The financial statements were approved by the director and authorised for issue on 14 November 2024 and were signed by:





M N Horton - Director


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 4 33,998,521 33,998,525

Changes in equity
Total comprehensive income - 1,472,053 1,472,053
Balance at 31 December 2022 4 35,470,574 35,470,578

Changes in equity
Total comprehensive income - 3,607,315 3,607,315
Balance at 31 December 2023 4 39,077,889 39,077,893

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 private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

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 11,863,145 10,263,496
Europe 12,462,954 12,783,172
Rest of the World 16,210,791 17,320,490
40,536,890 40,367,158

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 9,588,767 9,086,697
Social security costs 1,024,486 955,545
Other pension costs 528,818 586,733
11,142,071 10,628,975

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
243 237

2023 2022
£    £   
Directors' remuneration 302,156 236,654
Directors' pension contributions to money purchase schemes 13,549 12,264

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 302,156 236,654
Pension contributions to money purchase schemes 13,549 12,264

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 91,951 89,135
Operating leases 895,738 825,969
Depreciation - owned assets 847,288 992,969
Loss on disposal of fixed assets 13,318 -
Goodwill amortisation - 6,841,146
Computer software amortisation 27,912 32,662
Foreign exchange differences 1,151,079 (2,171,108 )

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 32,000 22,500

7. EXCEPTIONAL ITEMS

20232022
££
Bridgepoint charges135,305136,122
Other costs740,297771,221
875,602907,343

8. INTEREST RECEIVABLE AND SIMILAR INCOME
2023 2022
£    £   
Bank interest receivable 8,049 1,372
Interest receivable from group companies 1,123,277 1,223,652
Other interest received 8,584 -
1,139,910 1,225,024

9. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Interest payable to group companies 252,322 187,836
Other interest payable 3,718 3,632
Hire purchase interest 9,186 5,460
265,226 196,928

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 - 483,903
Adjustments in respect of prior periods (300,319 ) (239,359 )
Total current tax (300,319 ) 244,544

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 1,330,709 306,159

Tax on profit 1,030,390 550,703

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 4,962,455 919,506
Profit multiplied by the standard rate of corporation tax in the UK of
23.520% (2022 - 19%)

1,167,169

174,706

Effects of:
Expenses not deductible for tax purposes 27,585 1,404,220
Adjustments to tax charge in respect of previous periods (239,515 ) (171,760 )
Effects of group relief/other reliefs - (913,717 )
Tax rate changes 75,151 57,254
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 ) - (433,000 )
Deferred tax charge 108,250 - 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 - 1,471,000
Deferred tax charge (367,750 ) - (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 37,851,430 173,152 38,024,582
Additions - 7,881 7,881
At 31 December 2023 37,851,430 181,033 38,032,463
AMORTISATION
At 1 January 2023 37,851,430 101,604 37,953,034
Amortisation for year - 27,912 27,912
At 31 December 2023 37,851,430 129,516 37,980,946
NET BOOK VALUE
At 31 December 2023 - 51,517 51,517
At 31 December 2022 - 71,548 71,548

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 1,185,480 5,197,857 6,224,681
Additions - 6,518,793 -
Disposals - - (123,100 )
Reclassification/transfer 31,918 (2,013,064 ) 1,807,957
At 31 December 2023 1,217,398 9,703,586 7,909,538
DEPRECIATION
At 1 January 2023 1,022,219 - 2,968,545
Charge for year 127,854 - 635,224
Eliminated on disposal - - (109,782 )
At 31 December 2023 1,150,073 - 3,493,987
NET BOOK VALUE
At 31 December 2023 67,325 9,703,586 4,415,551
At 31 December 2022 163,261 5,197,857 3,256,136

Fixtures
and Motor Computer
fittings vehicles equipment Totals
£    £    £    £   
COST
At 1 January 2023 188,558 149 356,743 13,153,468
Additions - - - 6,518,793
Disposals - - - (123,100 )
Reclassification/transfer 53,789 - 119,400 -
At 31 December 2023 242,347 149 476,143 19,549,161
DEPRECIATION
At 1 January 2023 92,291 149 281,726 4,364,930
Charge for year 34,410 - 49,800 847,288
Eliminated on disposal - - - (109,782 )
At 31 December 2023 126,701 149 331,526 5,102,436
NET BOOK VALUE
At 31 December 2023 115,646 - 144,617 14,446,725
At 31 December 2022 96,267 - 75,017 8,788,538

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 486,943 273,880
Finished goods 2,563,216 2,965,968
5,049,312 4,940,591

14. DEBTORS
2023 2022
£    £   
Amounts falling due within one year:
Trade debtors 3,918,819 6,444,500
Amounts owed by group undertakings 29,344,946 26,758,251
Other debtors 43,564 41,641
Tax 300,000 -
VAT 159,898 173,939
Prepayments and accrued income 703,359 437,720
34,470,586 33,856,051

Amounts falling due after more than one year:
Amounts owed by group undertakings 6,970 6,437

Aggregate amounts 34,477,556 33,862,488

£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) 105,879 63,716
Trade creditors 2,651,767 2,636,105
Amounts owed to group undertakings 10,274,912 7,412,874
Tax - 494,553
Social security and other taxes 320,214 302,046
Other creditors 252,519 428
Accruals and deferred income 1,557,785 2,329,599
15,163,076 13,239,321

£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) 278,039 46,537
Other creditors 650,000 650,000
928,039 696,537

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 105,879 63,716
Between one and five years 278,039 46,537
383,918 110,253

Non-cancellable operating leases
2023 2022
£    £   
Within one year 929,393 729,418
Between one and five years 2,520,738 753,385
In more than five years 4,525,100 252,659
7,975,231 1,735,462

18. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 1,646,532 473,378
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 227,565
Charge to Statement of Comprehensive Income during year 1,269,905
Deferred tax charged in OCI (108,250 )
Prior year adjustment 60,804
Balance at 31 December 2023 1,450,024

20232022
££
Fixed asset timing differences1,646,532473,378
Short term timing differences(141,328)(245,813)
Losses(55,180)-
1,450,024227,565

19. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
4 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 140,000 211,000
165,000 263,000

Actual return on plan assets 1,100,000 (9,307,000 )

Changes in the present value of the defined benefit obligation are as follows:

Defined benefit
pension plans
2023 2022
£    £   
Opening defined benefit obligation 21,360,000 33,494,000
Interest cost 1,002,000 623,000
Changes to financial assumptions 235,000 (11,955,000 )
Benefits paid (970,000 ) (1,408,000 )
Loss on liabilities 476,000 1,233,000
Changes to demographic assumptions (155,000 ) (627,000 )
21,948,000 21,360,000

Changes in the fair value of scheme assets are as follows:

Defined benefit
pension plans
2023 2022
£    £   
Opening fair value of scheme assets 20,409,000 30,348,000
Contributions by employer 1,018,000 987,000
Administration costs (140,000 ) (211,000 )
Interest on assets 977,000 571,000
Return on assets less interest 123,000 (9,878,000 )
Benefits paid (970,000 ) (1,408,000 )
21,417,000 20,409,000

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
(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 4.55% 4.80%
Future pension increases 3.05% 3.25%
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.