Flytec Systems Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03783664 (England and Wales)

FLYTEC SYSTEMS LIMITED

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

30TH SEPTEMBER 2021

Page

Company Information

1

Report of the Directors

2

to

3

Report of the Independent Auditors

4

to

6

Statement of Income and Retained Earnings

7

to

8

Statement of Financial Position

9

Statement of Cash Flows

10

Notes to the Statement of Cash Flows

11

Notes to the Financial Statements

12

to

18

DIRECTORS:

Mr P G Merrick

Mr C E Jones

REGISTERED OFFICE:

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

REGISTERED NUMBER:

03783664 (England and Wales)

AUDITORS:

Morris Owen

Statutory Auditors

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

BANKERS:

HSBC Bank Plc

1 Marlborough Road

SWINDON

Wiltshire

SN3 1QN

The directors present their report with the financial statements of the company for the year ended 30th September 2021.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of manufacture of insulated wire and cable.

FUTURE DEVELOPMENTS

As included in note 19, in the notes to the financial statements, on 1 October 2021 the company ceased to trade. As at the date of signing these accounts, it is our intention to transfer the remaining trade and assets to its parent company, Unistrut Limited, as part of a group reconstruction and commence the process of formally liquidating Flytec Systems Limited.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st October 2020 to the date of this report.

Mr P G Merrick

Mr C E Jones

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors 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), 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 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

Mr P G Merrick - Director

23rd June 2022

Opinion

We have audited the financial statements of Flytec Systems Limited (the 'company') for the year ended 30th September 2021 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30th September 2021 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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.

Emphasis of matter in respect of going concern

We draw your attention to note 2 to the financial statements which explains that the directors intend to liquidate the company and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in note 2. Our opinion is not modified in respect of this matter.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where 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; or

-	the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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 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.

Auditors' 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 a Report of the Auditors 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

-

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations through the audit planning process;

-

we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company's industry;

-

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 health and safety legislation, employment, Companies Act, taxation legislation and general data protection regulations (GDPR);

-

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

-

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed this susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:

-

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

-

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

As a result of a long standing management and finance team we identified a risk of fraud through management bias and ability to override of controls, including lack of segregation of duties, which could lead to a misappropriation of cash and other assets. To address this we:

-

performed analytical procedures to identify any unusual or unexpected relationships;

-

tested journal entries to identify unusual transactions;

-

assessed whether judgements and assumptions made in determining the accounting estimates set out in note two were indicative of potential bias; and

-

investigated the rationale behind significant or unusual transaction, including sales and purchase ledger review

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

-

agreeing financial statement disclosures to underlying supporting documentation;

-

enquiring of management as to actual and potential litigation and claims; and

-

reviewing correspondence with HM Revenue & Customs (HMRC) and any legal correspondence

Due 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. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations. 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 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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.

Robert Andrew Beale (Senior Statutory Auditor)

for and on behalf of Morris Owen

Statutory Auditors

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

24th June 2022

REVENUE

-

2,032,344

2,032,344

Cost of sales

-

(1,702,646

)

(1,702,646

)

GROSS PROFIT

-

329,698

329,698

Administrative expenses

-

(994,806

)

(994,806

)

OPERATING LOSS

4

-

(665,108

)

(665,108

)

Amounts written off investments

-

-

-

Interest payable and similar expenses

5

-

(6,106

)

(6,106

)

LOSS BEFORE TAXATION

-

(671,214

)

(671,214

)

Tax on loss

6

-

1,309

1,309

LOSS FOR THE FINANCIAL YEAR

-

(669,905

)

(669,905

)

Retained earnings at beginning of year

304,959

RETAINED EARNINGS AT END OF YEAR

(364,946

)

REVENUE

2,123,123

-

2,123,123

Cost of sales

(1,615,109

)

-

(1,615,109

)

GROSS PROFIT

508,014

-

508,014

Administrative expenses

(506,164

)

-

(506,164

)

1,850

-

1,850

Other operating income

36,491

-

36,491

OPERATING PROFIT

4

38,341

-

38,341

Amounts written off investments

-

-

-

Interest payable and similar expenses

5

(8,962

)

-

(8,962

)

PROFIT BEFORE TAXATION

29,379

-

29,379

Tax on profit

6

28,450

-

28,450

PROFIT FOR THE FINANCIAL YEAR

57,829

-

57,829

Retained earnings at beginning of year

247,130

RETAINED EARNINGS AT END OF YEAR

304,959

FIXED ASSETS

Property, plant and equipment

7

358,349

408,142

CURRENT ASSETS

Inventories

8

-

186,468

Debtors

9

82,634

455,403

Cash at bank and in hand

155,538

196,518

238,172

838,389

CREDITORS

Amounts falling due within one year

10

519,070

732,224

NET CURRENT (LIABILITIES)/ASSETS

(280,898

)

106,165

TOTAL ASSETS LESS CURRENT LIABILITIES

77,451

514,307

CREDITORS

Amounts falling due after more than one year

11

(97,048

)

(159,486

)

PROVISIONS FOR LIABILITIES

14

(345,249

)

(49,762

)

NET (LIABILITIES)/ASSETS

(364,846

)

305,059

CAPITAL AND RESERVES

Called up share capital

15

100

100

Retained earnings

16

(364,946

)

304,959

SHAREHOLDERS' FUNDS

(364,846

)

305,059

The financial statements were approved by the Board of Directors and authorised for issue on 23rd June 2022 and were signed on its behalf by:

Mr P G Merrick - Director

Cash flows from operating activities

Cash generated from operations

1

(65,998

)

47,111

Interest paid

-

(150

)

Interest element of hire purchase payments paid

(6,106

)

(8,812

)

Tax paid

(24,969

)

7,063

Net cash from operating activities

(97,073

)

45,212

Cash flows from investing activities

Purchase of tangible fixed assets

(56,436

)

(24,393

)

Sale of tangible fixed assets

8,000

-

Net cash from investing activities

(48,436

)

(24,393

)

Cash flows from financing activities

Capital repayments in year

(76,900

)

(76,988

)

Intercompany loans

181,429

250,676

Net cash from financing activities

104,529

173,688

(Decrease)/increase in cash and cash equivalents

(40,980

)

194,507

Cash and cash equivalents at beginning of year

2

196,518

2,011

Cash and cash equivalents at end of year

2

155,538

196,518

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

(Loss)/profit before taxation

(671,214

)

29,379

Depreciation charges

79,849

75,557

Loss on disposal of fixed assets

18,380

-

Increase in other provisions

296,796

-

Finance costs

6,106

8,962

(270,083

)

113,898

Decrease in inventories

186,468

128,432

Decrease/(increase) in trade and other debtors

372,769

(96,621

)

Decrease in trade and other creditors

(355,152

)

(98,598

)

Cash generated from operations

(65,998

)

47,111

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 30th September 2021

30.9.21

1.10.20

£

£

Cash and cash equivalents

155,538

196,518

Year ended 30th September 2020

30.9.20

1.10.19

£

£

Cash and cash equivalents

196,518

2,011

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.10.20

Cash flow

At 30.9.21

£

£

£

Net cash

Cash at bank and in hand

196,518

(40,980

)

155,538

196,518

(40,980

)

155,538

Debt

Finance leases

(229,561

)

76,900

(152,661

)

(229,561

)

76,900

(152,661

)

Total

(33,043

)

35,920

2,877

1.	STATUTORY INFORMATION

Flytec Systems Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address are as below:

Registered number: 03783664

Registered office: 43-45 Devizes Road, Swindon, Wiltshire, SN1 4BG

The presentation currency of the financial statements is the Pound Sterling (£) rounded to the nearest pound.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

On 1 July 2021 the trade was transferred to the parent company, Unistrut Limited, as part of a group reconstruction and as result these accounts have not been prepared on a going concern basis.

Flytec Systems Limited then continued to fulfil their current service contracts and on 1 October 2021, after the balance sheet date, the company ceased to trade. As at the date of signing these accounts, it is the intention of the directors to transfer all the remaining trade and assets to its parent company and commence formally liquidating Flytec Systems Limited.

Significant judgements and estimates

In preparing these financial statements, the directors have made the following judgements:

- Determine whether leases entered into by the company as a lessee are operating leases or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

- Determine the period of useful economic life and any residual value of all tangible fixed assets order to write off the value of each asset over that period.

- Determine an appropriate provision for obsolete and slow moving stocks by assessing the net realisable value of all stock lines on a line by line basis.

Turnover

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

15% on reducing balance

Computer equipment

-

33% on reducing balance

Stocks

Inventories and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing inventories to their present location and condition.

Financial instruments

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Short term creditors are measured at transaction price, less any impairment. Other financial liabilities, including loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

119,775

609,102

Social security costs

-

41,131

Other pension costs

-

17,287

119,775

667,520

The average number of employees during the year was as follows:

2021

2020

Staff

-

23

On 1 October 2020 the staff were transferred, under the Transfer of Undertakings (Protection of Employment) (TUPE) arrangement to Unistrut. Unistrut recharged any appropriate staff costs back to Flytec Systems Limited during the year.

2021

2020

£

£

Directors' remuneration

-

-

4.	OPERATING (LOSS)/PROFIT

The operating loss (2020 - operating profit) is stated after charging:

2021

2020

£

£

Hire of plant and machinery

4,429

4,311

Other operating leases

-

821

Depreciation - owned assets

29,575

20,412

Depreciation - assets on hire purchase contracts

50,274

55,144

Loss on disposal of fixed assets

18,380

-

Auditors' remuneration

6,250

4,500

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Bank interest

-

4

Corporation tax interest payable

-

146

Hire purchase

6,106

8,812

6,106

8,962

6.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

-

5,431

Under/over provision

-

19,348

Total current tax

-

24,779

Deferred tax

(1,309

)

(53,229

)

Tax on (loss)/profit

(1,309

)

(28,450

)

UK corporation tax has been charged at 19% (2020 - 19%).

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

£

£

(Loss)/profit before tax

(671,214

)

29,379

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

(127,531

)

5,582

Effects of:

Expenses not deductible for tax purposes

3,492

40

Capital allowances in excess of depreciation

(5,229

)

(219

)

Deferred tax

(1,309

)

(53,229

)

Under/over provision

-

19,376

Losses carried forward

129,268

-

Total tax credit

(1,309

)

(28,450

)

7.	PROPERTY, PLANT AND EQUIPMENT

Fixtures

Plant and

and

Motor

Computer

machinery

fittings

vehicles

equipment

Totals

£

£

£

£

£

COST

At 1st October 2020

791,060

59,296

47,095

16,613

914,064

Additions

55,965

-

471

-

56,436

Disposals

-

-

(35,100

)

-

(35,100

)

At 30th September 2021

847,025

59,296

12,466

16,613

935,400

DEPRECIATION

At 1st October 2020

431,991

43,281

18,742

11,908

505,922

Charge for year

73,399

2,801

1,416

2,233

79,849

Eliminated on disposal

-

-

(8,720

)

-

(8,720

)

At 30th September 2021

505,390

46,082

11,438

14,141

577,051

NET BOOK VALUE

At 30th September 2021

341,635

13,214

1,028

2,472

358,349

At 30th September 2020

359,069

16,015

28,353

4,705

408,142