Financial Statements
Etag Fixings UK Limited
For the year ended 31 December 2023
Registered number: 07642143
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Company Information
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Niall Kelly (resigned 27 September 2024)
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Shirley Bowman (resigned 31 August 2023)
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Tony Taylor (appointed 31 August 2023)
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Unit 14E Thames Gateway Park
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Chartered Accountants & Statutory Auditor
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Contents
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Directors' responsibilities statement
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Independent auditor's report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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Strategic report
For the year ended 31 December 2023
The directors present the strategic report for the year ended 31 December 2023.
The principal activity of the Company continued to be that of the sale and distribution of specialist construction products, together with related building supplies, to the construction sector.
Business review and future developments
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The directors aim to present a balanced and comprehensive review of the development and performance of the business during the period and its position at the period end. Their review is consistent with the size and nature of the business and is written in the context of the risks and uncertainties they face.
The principal activity of the Company continued to be the sale and distribution of specialist construction products, together with related building supplies, to the construction sector.
2023 was a year of transformation for Etag.
Although the market has not been easy and sales have not grown, with the continuing support of our investor we have invested significantly in the future of the business. Our new leadership team was largely in place by the middle of the year, blending skilled executives with wide experience of our sector, with the talented people who have been central to the creation and early growth of Etag.
Hard work has been invested in our operational performance and our customers will have seen real improvement in service to fully competitive levels in inventory availability and on-time delivery (both of which we monitor closely). Excess stock on current product lines has been reduced, releasing cash.
And, in the background, much further work has continued to allow us to take full advantage of the Company wide ERP and IT system first introduced in 2022.
Above all, with growing confidence in our operating performance, we are focusing on sales and marketing – regular marketing campaigns, introducing a CRM (Customer Relationship management) tool to help our sales team and a more structured approach to product pricing.
The company plans to continue to develop and grow its present activities. Colleagues are kept as fully informed as practicable about developments within the business.
We would like to say a big thank you to all our colleagues, those who have worked at Etag from earlier days, and those who have joined more recently. It is a key objective to make Etag a happy and rewarding place to work.
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Strategic report (continued)
For the year ended 31 December 2023
Key financial performance indicators
The directors consider that the key financial performance indicators (KPIs) are turnover, gross margin, EBITDA and operating cash and these indicators are closely monitored. These KPIs allow the directors to assess both the growth and profitability of the Company against competitors and the internal and external factors that affect the business.
The financial year has been challenging, largely as a result of macroeconomic issues affecting the construction sector. Despite these challenges the Company continues to invest in our people, processes and systems to be well positioned as market conditions improve.
The prior year results were restated as a result of changes in our estimates for stock provisions and commission payable. The overall effect of these changes was to reduce the previously reported profit and shareholder's funds in the prior year by £257,527.
The company plans to continue to develop and grow its present activities. Colleagues are kept as fully informed as practicable about developments within the business.
Principal risks and uncertainties
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Economic risk
There is risk of increased inflation rates and rising labour costs, which ultimately impacts on the cost of providing services and products, thus having an adverse impact on served customer sectors. The Company regularly reviews its sourcing policies to reduce this risk.
Competition risk
Due to challenging market conditions within the construction sector, pressure on price remains a challenge. The company has recently launched a new pricing strategy, which will help stabilise customer pricing whilst rewarding customers for loyalty and spend. A new Customer Relationship Management system has also been launched to take advantage of opportunities to improve market share.
Financial risk
The Company has budgetary and financial reporting procedures, supported by appropriate key performance indicators to manage credit, liquidity and other financial risk.
Changes to regulations
The Company regularly monitors building regulations specific to high rise developments which is a key segment for the business. This presents an opportunity if the company is able to adapt and support its customers through the challenges, whilst it poses a risk on inventory should regulations change and the inventory profile doesn’t.
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Strategic report (continued)
For the year ended 31 December 2023
This report was approved by the board and signed on its behalf.
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Tony Taylor
Director
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Directors' report
For the year ended 31 December 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The principal activity of the Company continued to be that of the sale and distribution of specialist construction products, together with related building supplies, to the construction sector.
The loss for the year, after taxation, amounted to £1,667,334 (2022: £215,729 as restated).
The directors have recommended the payment of a dividend of £Nil (2022: £63,945).
The directors who served during the financial year and up to date of signature of the financial statements were as follows:
Niall Kelly (resigned 27 September 2024)
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Shirley Bowman (resigned 31 August 2023)
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Tony Taylor (appointed 31 August 2023)
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Charitable and political donations
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The Company made charitable donations of £3,900 during the financial year (2022: £8,000).
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The directors have reviewed the cashflow forecasts for the Company for 12 months from the signing of these financial statements. They are confident that based on their review that the Company has sufficient funding available to continue trading for the foreseeable future. The Company continues to have positive net current assets as at 31 December 2023. As a result of this, the financial statements have been prepared on a going concern basis.
Events since the end of the financial year
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There have been no significant events affecting the company since the financial year end.
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Directors' report (continued)
For the year ended 31 December 2023
Matters covered in the Strategic report
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Under Schedule 7.1A of "Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 the group has elected to disclose the following Director's Report information in the Strategic Report:
∙Principal activities and business review; and
∙Principal risks and uncertainties.
The auditor, Grant Thornton, continues in office in accordance with section 485 of the Companies Act 2006.
This report was approved by the Board and signed on its behalf.
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Tony Taylor
Director
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Directors' responsibilities statement
For the year ended 31 December 2023
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and
∙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 to 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.
On behalf of the board
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Tony Taylor
Director
Date: 17 February 2025
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Independent auditor's report to the members of Etag Fixings UK Limited
We have audited the financial statements of Etag Fixings UK Limited, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity for the financial year ended 31 December 2023, and the related notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion, Etag Fixings UK Limited's financial statements:
∙give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Company as at 31 December 2023 and of its financial performance for the financial year then ended; 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 'Responsibilities of the auditor 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 United Kingdom, namely the FRC's Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances of the entity. 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
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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 the date 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.
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Independent auditor's report to the members of Etag Fixings UK Limited (continued)
Other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon, including the Directors' report and the Strategic Report. The directors are responsible for the other information. Our opinion on the financial statements does not cover the information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements, and
∙the Directors' report and the Strategic Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the Directors' report and the Strategic 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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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Independent auditor's report to the members of Etag Fixings UK Limited (continued)
Responsibilities of management and those charged with governance for the financial statements
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Management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS102 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, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
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The objectives of an auditor 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 their 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 an auditor's responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Explanation as to what extent 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. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to compliance with Data Privacy Law, Employment Law, Environmental Regulations and Health & Safety Regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and UK tax legislation. The Audit engagement partner considered the experience and expertise of the engagement team to ensure that the team had appropriate competence and capabilities to identify or recognise non-compliance with the laws and regulations. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statements.
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Independent auditor's report to the members of Etag Fixings UK Limited (continued)
Responsibilities of the auditor for the audit of the financial statements (continued)
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
In response to these principal risks, our audit procedures included but were not limited to:
∙inquiries of management on the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
∙inspection of the company’s legal correspondence and review of minutes of directors’ meetings during the year to corroborate inquiries made;
∙gaining an understanding of the internal controls established to mitigate risk related to fraud;
∙discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
∙identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
∙designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing
∙challenging assumptions and judgements made by management in their significant accounting estimates, including impairment of trade debtors, estimating useful lives of depreciable assets and determining net realisable value of stocks; and
∙review of the financial statement disclosures to underlying supporting documentation and inquiries of management.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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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.
Kevin Foley FCA (Senior statutory auditor)
for and on behalf of
Grant Thornton
Chartered Accountants &
Statutory Auditor
Dublin 2
Date: 17 February 2025
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Statement of comprehensive income
For the year ended 31 December 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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All amounts relate to continuing operations.
There was no other comprehensive income for 2023 (2022: £Nil).
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The notes on pages 14 to 30 form part of these financial statements.
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Etag Fixings UK Limited
Registered number:07642143
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Statement of financial position
As at 31 December 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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Tony Taylor
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The notes on pages 14 to 30 form part of these financial statements.
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Statement of changes in equity
For the year ended 31 December 2023
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Profit for the financial year
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Dividends: Equity capital
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At 1 January 2023 (as previously reported)
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Prior period adjustment (Note 26)
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At 1 January 2023 (as restated)
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Loss for the financial year
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The notes on pages 14 to 30 form part of these financial statements.
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Notes to the financial statements
For the year ended 31 December 2023
Etag Fixings UK Limited (the Company) is a company limited by shares incorporated in the United Kingdom of Ireland, registered under the number 07642143, with a registered address at Unit 14E Thames Gateway Park, Chequers Lane, Dagenham, Essex.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors have reviewed the cashflow forecasts for the Company for 12 months from the signing of these financial statements. They are confident that based on their review that the Company has sufficient funding available to continue trading for the foreseeable future. The Company continues to have positive net current assets as at 31 December 2023. As a result of this, the financial statements have been prepared on a going concern basis.
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Financial reporting standard 102 - reduced disclosure exemptions
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The company, as a qualifying entity, has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7;
∙the requirements of Section 11 Basic Financial Instruments paragraph 11.41; and
∙the requirements of Section 12 Other Financial Instrument Issues paragraph 12.26.
This information is included in the consolidated financial statements of ETAG Fixings Holdco Limited as at 31 December 2023 and these financial statements may be obtained from Units 23-25 The Hub Logistics Park, Bracetown, Clonee, Dublin 15.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Foreign currency translation (continued)
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At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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Finance assets: the Company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit and loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss. If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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Over the term of the lease
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, inclusive of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, inclusive of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Page 18
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.
3.1 Key Sources of Estimation Uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Page 19
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Notes to the financial statements
For the year ended 31 December 2023
3.Judgements in applying accounting policies (continued)
(i) Impairment of trade debtors
Adequate amount of allowance for impairment is provided for specific and groups of accounts, where objective evidence of impairment exists. The Company evaluates the amount of allowance for impairment based on available facts and circumstances affecting the collectability of the accounts, including, but not limited to, the length of the Company’s relationship with the customers, the customers’ current credit status, average age of accounts, collection experience and historical loss experience. The methodology and assumptions used in estimating future cash flows are reviewed regularly by the Company to reduce any differences between loss estimates and actual loss experience.
(ii) Estimating useful lives of depreciable assets
The Company estimates the useful lives of tangible fixed assets based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets. In addition, estimation of the useful lives of tangible fixed assets is based on collective assessment of industry practice, internal technical evaluation and experience with similar assets. Actual results, however, may vary due to changes in estimates brought about by changes in factors mentioned above.
(iii) Determining net realisable value of stocks
In determining the net realisable value of stocks, management takes into account the most reliable evidence available at the time the estimates are made. Future realisation of the carrying amounts of stocks is affected by price changes in the industry and the necessary costs incurred to make a sale.
An analysis of the turnover by geographical location area is not provided as, in the opinion of the directors, the disclosure of such information would be prejudicial to the interest of the Company.
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Management fees receivable
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Page 20
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Notes to the financial statements
For the year ended 31 December 2023
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The operating loss is stated after charging:
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Depreciation of tangible fixed assets
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Amortisation of intangible fixed assets
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Defined contribution pension cost
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the financial year was as follows:
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Company contributions to defined contribution pension schemes
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The above amounts for remuneration include directors' emoluments amounting to £195,000 (2022: £160,333) and Company contributions to defined contribution pension schemes amounting to £2,642 (2022: £40,000) in respect of the highest paid director. During the year, 2 directors (2022: 3) participated in defined cotribution pension schemes.
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Page 21
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Notes to the financial statements
For the year ended 31 December 2023
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Interest payable and similar expenses
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Bank loan interest payable
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Hire purchase interest payable
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Invoice financing interest payable
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Current tax on loss for the year
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Origination and reversal of timing differences
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Taxation on loss on ordinary activities
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Page 22
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Notes to the financial statements
For the year ended 31 December 2023
10.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022: 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022: 19%)
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Expenses not deductible for tax purposes
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Capital allowances for financial year in excess of depreciation and amortisation
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Unrelieved tax losses carried forward
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Deferred tax movement in the year
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Provisions tax adjustment
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Total tax (credit)/charge for the year
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Factors that may affect future tax charges
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A deferred tax asset of €316,626 (2022: £Nil) has not been recognised as, in the opinion of the directors, there is no sufficient certainty that there will be suitable taxable profits from which the future reversal of underlying timing differences can be deducted.
Page 23
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Notes to the financial statements
For the year ended 31 December 2023
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Charge for the year on owned assets
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Page 24
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Notes to the financial statements
For the year ended 31 December 2023
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Long-term leasehold property
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Charge for the year on owned assets
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The net book value of tangible fixed assets held under hire purchase contracts amounted to £30,458 (2022: £47,458). Depreciation amounting to £17,000 (2022: £17,000) was charged for these assets during the financial period.
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Page 25
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Notes to the financial statements
For the year ended 31 December 2023
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Finished goods and goods for resale
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The net replacement cost of stocks is not materially different from that shown above.
Finished goods and goods for resale are stated after a provision of £267,841 (2022: £237,994 as restated).
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Amounts owed by group undertakings
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Trade debtors are stated after a provision of £88,112 (2022: £133,628).
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
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Cash and cash equivalents
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Page 26
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Notes to the financial statements
For the year ended 31 December 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under hire purchase contracts
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Obligations under hire purchase contracts are secured by a fixed charge over the respective assets they relate to.
The financing facility is secured by way of charge of the Company's trade debtors.
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Other taxation and social security
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Creditors: Amounts falling due after more than one year
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Net obligations under hire purchase contracts
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Obligations under hire purchase contracts are secured by a fixed charge over the respective assets they relate to.
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Page 27
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Notes to the financial statements
For the year ended 31 December 2023
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Charged to profit or loss
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Allotted, called up and fully paid
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1,000 (2022: 1,000) Ordinary shares of £1.00 each
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50 (2022: 50) B Ordinary shares of £1.00 each
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50 (2022: 50) A Ordinary shares of £1.00 each
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Right of shareholders
The holders of Ordinary shares are entitled to receive notice of, attend and vote at general meeting of the Company. The shareholder is entitled to one vote for every Ordinary share held.
The holders of A Ordinary and B Ordinary shares are entitled to receive notice of and attend general meetings of the Company. However, they cannot vote on any resolution proposed.
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Profit and loss account
Includes all current and prior period retained profits and losses.
Called up share capital
Represents the nominal value of shares that have been issued.
Page 28
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Notes to the financial statements
For the year ended 31 December 2023
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £63,112 (2022: £103,102 as restated). Contributions totalling £83,706 (2022: £47,663 as restated) were payable to the fund at the reporting date and are included in creditors.
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Commitments under operating leases
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At 31 December 2023, the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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In respect of land and buildings
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Later than 1 year and not later than 5 years
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Minimum lease payments under hire purchase fall due as follows:
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Restatement of prior year financial statements
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The financial statements have been restated to account for a change in management estimates in the recognition and measurement of account balances. The net impact on the financial statements are reflected below:
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Previously presented 31 December 2022
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As restated
31 December 2022
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Creditors: amounts falling due within one year
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Page 29
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Notes to the financial statements
For the year ended 31 December 2023
26Restatement of prior year financial statements (continued)
The prior year financial statements have been restated as follows:
1. Stock has been reduced by £237,994 due to the implementation of a stock provision for slow moving inventory items. This represents a change in the estimate made by the Directors. The effect of this is to reduce the previously reported profit and shareholder's funds in the prior year by £237,994.
2. Accruals have increased by £19,533 due to a change in the estimate made by the Directors for commission payable, pension liability and stock purchases at the year end. The effect of this is to reduce the previously reported profit and shareholder's funds in the prior year by £19,533.
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Related party transactions
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There are no key management personnel, other than directors, that need to be disclosed under FRS 102 (2022: £Nil).
The Company has taken advantage of the exemption conferred by section 33 of FRS 102 not to disclose transactions with members of the group headed by ETAG Holdco Limited on the grounds that 100% of the voting rights are controlled within that group.
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Post balance sheet events
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There have been no significant events affecting the Company since the financial year end.
The Company is a wholly owned subsidiary of Etag Fixings Holdco Limited which is a Company incorporated in the Republic of Ireland.
The ultimate parent company is Foresight Group Holdings Limited, a company incorporated in Guernsey.
The Directors consider there to be no ultimate controlling party of Foresight Group Holdings Limited.
The smallest group of undertakings which prepared consolidated financial statements that are publicly available, is Etag Fixings Holdco Limited, a company incorporated in the Republic of Ireland. Group financial statements for this company are available from the Companies Registration Office, Bloom House, Gloucester Place Lower, Mountjoy, Dublin.
The largest group of undertakings which prepares consolidated financial statements of Foresight Group Holdings Limited, a company incorporated in Guernsey. These financial statements are available from the Registrar of Companies, Companies House, Crown Way, Cardiff, United Kingdom.
Page 30
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