Company registration number 00624855 (England and Wales)
FERN PLASTIC PRODUCTS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
FERN PLASTIC PRODUCTS LTD
COMPANY INFORMATION
Directors
Mr G Harper
Mr M A Stallard
Company number
00624855
Registered office
Macrome Road
Wolverhampton
West Midlands
WV6 9HD
Auditor
CK Audit
No 4 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RH
Business address
Macrome Road
Wolverhampton
West Midlands
WV6 9HD
FERN PLASTIC PRODUCTS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
FERN PLASTIC PRODUCTS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Fair review of the business
We aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. The review is consistent with the size and complexity of the business and is written in the context of the risks and uncertainty it faces.
Principal risks and uncertainties
Sales in all 3 of our largest market sectors declined sharply in the first 3 quarters of the year. No advance warning was given but eventually our largest customers told us they were holding very high stocks, built-up post-pandemic and at the start of the Ukraine conflict/energy crisis which they deemed no longer necessary from a security perspective and more expensive to finance with rising interest rates. Our customers liquidating these stocks and weak economic activity generally resulted in low demand for our production capacity until quarter 4 when we bounced-back with sales at a similar level to a year earlier and fortunately trend continues in the new year with sales at a much more consistent level.
We did not expect 2023-24 to be quite so bumpy although we were expecting weak demand to continue from the prior year so we were somewhat prepared and able to manage cash-flow and productivity well with the cooperation of our loyal and flexible workforce. Energy costs reduced by the end of the year and raw materials costs were relatively stable although other purchase items increased with higher inflation.
Development and performance
Profits were significantly impacted by one-off exceptional costs described below.
Essential investment continued in our strategic priorities of automation, energy efficiency and new business at a prudent rate considering our reduced sales revenues but we made good progress. Increased yield and lower costs of quality were particular highlights.
Key performance indicators
Other performance indicators
New tooling sales were significant again but frustratingly the associated parts production will not ramp-up until 2025. We are delighted to be involved in these CO2 reduction/sustainable energy projects although the testing and validation processes are onerous and time-intensive. Our latest Q4 investment in laser-scanning technology will give us an advantage in 2024-25.
FERN PLASTIC PRODUCTS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Other information and explanations
One-off exceptional costs and the reduction of total equity relates to the restructuring of Group ownership among the existing owners during the year. There are no new investors and management individuals remain the same although roles have been re-aligned accordingly.
We will continue to face foreseeable and unexpected challenges once more but we believe our financial robustness, business strategy and management process will enable us to withstand any shocks or threats to our continuity in the next period or in the medium term. We remain vigilant and prepared to adapt quickly to the prevailing situation as we have successfully done so previously. The Directors regularly review circumstances, developing short term and long-term strategies accordingly.
Mr G Harper
Director
29 November 2024
FERN PLASTIC PRODUCTS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity for the year was plastic injection moulding and toolmaking.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr I Graham
(Resigned 30 May 2023)
Mr G Harper
Mr M A Stallard
Financial instruments
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The company uses interest rate derivatives to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.
The company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Auditor
The auditor, CK Audit, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
FERN PLASTIC PRODUCTS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr G Harper
Director
29 November 2024
FERN PLASTIC PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FERN PLASTIC PRODUCTS LTD
- 5 -
Opinion
We have audited the financial statements of Fern Plastic Products Ltd (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
FERN PLASTIC PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FERN PLASTIC PRODUCTS LTD (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified and assessed the risks of material misstatement of the financial statements, in respect of irregularities whether due to fraud or error, or non compliance with laws and regulations and then designed and performed audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company by discussion and enquiry with the directors and management team and our general knowledge and experience of the manufacturing and supply sector.
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing correspondence with relevant regulators and reviewing board minutes;
FERN PLASTIC PRODUCTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FERN PLASTIC PRODUCTS LTD (CONTINUED)
- 7 -
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed included but were not limited to:
Discussions with directors and management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
Confirming our understanding of controls by performing a walk through test or observation and enquiry
Performing analytical procedures to identify any unusual or unexpected relationships;
Challenging assumptions and judgements made by management in its significant accounting estimates;
Identifying and testing journal entries;
Reviewing unusual or unexpected transactions; and
Agreeing the financial statement disclosures to underlying supporting documentation.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Nicholls
Senior Statutory Auditor
For and on behalf of CK Audit
29 November 2024
Chartered Accountants
Statutory Auditor
No 4 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RH
FERN PLASTIC PRODUCTS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
5,664,457
6,942,667
Cost of sales
(4,739,940)
(5,764,270)
Gross profit
924,517
1,178,397
Distribution costs
(299,220)
(298,565)
Administrative expenses
(698,457)
(706,610)
Other operating income
24,064
5,818
Operating (loss)/profit
4
(49,096)
179,040
Interest receivable and similar income
6
125
Interest payable and similar expenses
7
(22,661)
(21,194)
(Loss)/profit before taxation
(71,757)
157,971
Tax on (loss)/profit
8
23,635
(53,710)
(Loss)/profit for the financial year
(48,122)
104,261
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FERN PLASTIC PRODUCTS LTD
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,424,020
1,436,753
Current assets
Stocks
11
1,050,263
990,584
Debtors
12
4,908,585
3,624,858
5,958,848
4,615,442
Creditors: amounts falling due within one year
13
(4,138,143)
(2,648,311)
Net current assets
1,820,705
1,967,131
Total assets less current liabilities
3,244,725
3,403,884
Creditors: amounts falling due after more than one year
14
(58,534)
(121,872)
Provisions for liabilities
Deferred tax liability
17
312,336
335,971
(312,336)
(335,971)
Government grants
18
(8,907)
(32,971)
Net assets
2,864,948
2,913,070
Capital and reserves
Called up share capital
20
6,972
6,972
Capital redemption reserve
2,668
2,668
Profit and loss reserves
2,855,308
2,903,430
Total equity
2,864,948
2,913,070
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 November 2024 and are signed on its behalf by:
Mr G Harper
Director
Company registration number 00624855 (England and Wales)
FERN PLASTIC PRODUCTS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
6,972
2,668
4,238,139
4,247,779
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
104,261
104,261
Dividends
9
-
-
(1,438,970)
(1,438,970)
Balance at 31 March 2023
6,972
2,668
2,903,430
2,913,070
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
(48,122)
(48,122)
Balance at 31 March 2024
6,972
2,668
2,855,308
2,864,948
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information
Fern Plastic Products Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Macrome Road, Wolverhampton, West Midlands, WV6 9HD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the reduced disclosure exemptions for subsidiaries as follows:
The requirements of Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation paragraph 3.17(d).
The requirements of Section 11 Basic Financial Instruments paragraphs 11.39 to 11.48A and Section 12 Other Financial Instruments paragraphs 12.26 to 12.29A providing the equivalent disclosures required by this FRS are included in the consolidated financial statements of the group in which the entity is consolidated.
The requirement of Section 33 Related Party Disclosures paragraph 33.7.
Fern Plastic Products Limited is a wholly owned subsidiary of Fern Manufacturing Group Limited and the results of Fern Plastic Products Limited are included in the consolidated financial statements of Fern Manufacturing Group Limited which are available from Macrome Road, Wolverhampton, West Midlands, WV6 9HD.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents the amount derived from the provision of goods and services falling within the company's activities after deduction of trade discounts and value added tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Plant and machinery
15% reducing balance
Fixtures, fittings & equipment
10 - 25% reducing balance
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.12
Retirement benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants on capital expenditure are credited to a deferral account and are released to revenue over the expected useful life of the relevant asset by equal annual instalments. Grants of a revenue nature are credited to income in the period to which they relate.
1.15
Foreign exchange
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling as at the date of the transaction. Monetary assets and liabilities in the balance shhet are translated at the rate of exchange ruling at the balance sheet date. Gains and losses on translation and conversion are included as part of the results from ordinary activities.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Useful economic lives of non-current assets
The useful economic lives of non-current assets have been derived from the judgement of the Directors, using their best estimate of write-down period.
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock
Inventories are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Mould shop
5,107,394
6,311,318
Tool room
124,148
59,428
Factored tools
432,915
571,921
5,664,457
6,942,667
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
3,433,095
4,241,210
EC Countries
1,312,600
1,622,009
Rest of the World
918,762
1,079,448
5,664,457
6,942,667
2024
2023
£
£
Other revenue
Interest income
-
125
Grants received
24,064
5,818
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(68)
(3,415)
Government grants
(24,064)
(5,818)
Fees payable to the company's auditor for the audit of the company's financial statements
14,001
11,750
Depreciation of owned tangible fixed assets
168,291
170,725
Depreciation of tangible fixed assets held under finance leases
47,282
55,626
Operating lease charges
127,500
127,500
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration
9
9
Selling & Distribution
5
6
Works
59
63
Total
73
78
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,685,415
1,862,033
Social security costs
156,946
174,342
Pension costs
83,880
71,391
1,926,241
2,107,766
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
125
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
15,239
16,524
Interest on finance leases and hire purchase contracts
7,422
4,670
22,661
21,194
8
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
(15,297)
Deferred tax
Origination and reversal of timing differences
(23,635)
69,007
Total tax (credit)/charge
(23,635)
53,710
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(71,757)
157,971
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(17,939)
30,014
Tax effect of expenses that are not deductible in determining taxable profit
465
(459)
Adjustments in respect of prior years
(15,297)
Effect of change in corporation tax rate
80,633
Group relief
14,365
Permanent capital allowances in excess of depreciation
(9,190)
Research and development tax credit
(20,526)
(34,515)
Deferred tax adjustments in respect of prior years
2,524
Taxation (credit)/charge for the year
(23,635)
53,710
9
Dividends
2024
2023
£
£
Final paid
1,438,970
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 April 2023
5,380,042
657,423
6,037,465
Additions
173,860
28,980
202,840
At 31 March 2024
5,553,902
686,403
6,240,305
Depreciation and impairment
At 1 April 2023
4,102,698
498,014
4,600,712
Depreciation charged in the year
200,818
14,755
215,573
At 31 March 2024
4,303,516
512,769
4,816,285
Carrying amount
At 31 March 2024
1,250,386
173,634
1,424,020
At 31 March 2023
1,277,344
159,409
1,436,753
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and machinery
267,930
315,211
11
Stocks
2024
2023
£
£
Raw materials and consumables
507,589
436,644
Work in progress
100,925
97,135
Finished goods and goods for resale
441,749
456,805
1,050,263
990,584
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,166,305
1,391,775
Amounts owed by group undertakings
3,734,189
2,233,083
Prepayments and accrued income
8,091
4,908,585
3,624,858
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
12
Debtors
(Continued)
- 20 -
Included within trade debtors is £1,134,532 (2023- £1,379,684) subject to an invoice discounting facility. The corresponding liability is included within other creditors due within one year.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
104,930
48,142
Obligations under finance leases
16
63,338
93,937
Trade creditors
557,387
532,007
Amounts owed to group undertakings
3,078,693
1,454,799
Taxation and social security
104,535
116,980
Other creditors
220,524
344,295
Accruals and deferred income
8,736
58,151
4,138,143
2,648,311
Other creditors include advances for an invoice discounting agreement of £220,524 (2023 - £344,295). These advances are secured by a fixed and floating charge over all the assets of the company.
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
16
58,534
121,872
15
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
104,930
48,142
Payable within one year
104,930
48,142
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
82,776
93,936
In two to five years
39,097
121,873
121,873
215,809
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
16
Finance lease obligations
(Continued)
- 21 -
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
ACAs
333,369
335,971
Tax losses
(21,033)
-
312,336
335,971
2024
Movements in the year:
£
Liability at 1 April 2023
335,971
Credit to profit or loss
(23,635)
Liability at 31 March 2024
312,336
18
Government grants
2024
2023
£
£
Arising from government grants
8,907
32,971
8,907
32,971
Deferred income is included in the financial statements as follows:
2024
2023
£
£
Shown as deferred income on the face of the balance sheet
8,907
32,971
8,907
32,971
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
83,880
71,391
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Authorised
'A' Ordinary shares of £1 each
3,486
3,486
3,486
3,486
'B' Ordinary shares of £1 each
3,486
3,486
3,486
3,486
6,972
6,972
6,972
6,972
Issued and fully paid
'A' Ordinary shares of £1 each
3,486
3,486
3,486
3,486
'B' Ordinary shares of £1 each
3,486
3,486
3,486
3,486
6,972
6,972
6,972
6,972
21
Financial commitments, guarantees and contingent liabilities
The company is subject to group banking arrangements under which the company's assets and undertaking are charged. The company has also given guarantees jointly and severally with its parent company and ultimate parent company in respect of group borrowings which at 31 March 2024 amounted to £1,771,543 (2023 - £207,2462).
22
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for property rental, motor vehicles and plant and machinery.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
129,623
141,020
Between two and five years
2,123
129,623
143,143
FERN PLASTIC PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
23
Ultimate controlling party
The ultimate parent company is Fern Manufacturing Group Limited, a company registered in England and Wales.
Fern Manufacturing Group Limited prepares group financial statements and copies can be obtained from Macrome Road, Wolverhampton, West Midlands, WV6 9HD.
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