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Registered number: 00194713
BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
COMPANY INFORMATION
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S P Codd (appointed 1 September 2020)
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D Hunter (appointed 4 January 2021)
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I C Ross (appointed 1 September 2020)
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G Brown (appointed 22 March 2022)
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Chartered Accountants & Statutory Auditor
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
CONTENTS
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Directors' responsibilities statement in respect of the Directors' report and financial statements
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Independent auditors' report to the members of BSP TEX LTD (formerly BSP International Foundations Limited)
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Statement of changes in equity
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Notes to the financial statements
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2021
The directors present their report and the financial statements for the period ended 31 March 2021.
The company designs and manufactures a proprietary range of piling and drilling equipment for the ground engineering market and ancillary products.
The loss for the period, after taxation, amounted to £147,509 (2019 - loss £374,251).
The directors proposed and paid a dividend of £Nil (2019: £Nil).
During the period, the staff of Tex Engineering Limited were TUPE'd over to BSP TEX Ltd (formerly BSP International Foundations Limited) on 1 January 2021. There was a redemption of part of the loan with Tex Group Limited (formerly Tex Holdings plc) on 9 February 2021 and a new loan agreement drawn up to repay this over 10 years. There was a transfer of trade and assets agreement drawn up and signed on 16 February 2021 to move all trade and assets of Tex Engineering Limited over to BSP TEX Ltd (formerly BSP International Foundations Limited).
The directors who served during the period were:
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S P Codd (appointed 1 September 2020)
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D Hunter (appointed 4 January 2021)
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I C Ross (appointed 1 September 2020)
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During the year there has been no contract of significance in relation to the company’s business in which any director’s interest was material.
Certain directors benefited from qualifying third-party indemnity provisions in place during the year and at the date of this report.
Disclosure of information to auditors
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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 auditors are 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 auditors are aware of that information.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2021
The directors have reasonable expectation that the Company has adequate financial resources to continue in operational existence for the foreseeable future, and accordingly the going concern basis continues to be adopted in the preparation of the financial statements.
The Board continues to carefully manage the Company’s funding and liquidity position. The main sources of debt funding are Group loans. The bank balance is carefully monitored to ensure that it remains positive and loan repayments are made each month.
Since 31 March 2021, the consequences of the COVID-19 outspread have materially and adversely affected the supply and demand for the Company’s primary products and therefore, its operating results have been negatively impacted. The directors have prepared forecasts to 31 March 2023 which take the pandemic into account and forecast what the impact is likely to be.
The Group has considerable financial resources together with long-term contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.
BSP TEX LTD (formerly BSP International Foundations Limited) is majority owned by Tex Group Limited (formerly Tex Holdings plc). Tex Group Limited (formerly Tex Holdings plc) would financially support BSP TEX LTD (formerly BSP International Foundations Limited), if required.
Further details regarding the adoption of the going concern basis can be found in the statement of accounting policies in the Financial Statements.
Under section 487(2) of the Companies Act 2006, Price Bailey LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board on 13 May 2022 and signed on its behalf.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 MARCH 2021
The directors are responsible for preparing 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 applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' reports may differ from legislation in other jurisdictions.
The directors confirm that so far as they are aware, there is no relevant audit information (as defined by section 418(3) of the Companies Act 2006) of which the company’s auditors are unaware. They have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
We have audited the financial statements of BSP Tex Ltd (the ‘company’) for the period ended 31 March 2021 which comprise the profit and loss account, balance sheet, 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, except for the possible effects of the matter described in the basis for qualified opinion section or our report, the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 March 2021 and of its loss for the period 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.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED) (CONTINUED)
Basis for qualified opinion
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The company was unable to provide a complete and detailed stock listing at 31 December 2019. We were unable to satisfy ourselves by alternative means concerning stock quantities held or valuation at 31 December 2019 which were included in the balance sheet at £2,407,509. Consequently we were unable to determine whether any adjustment to this amount was necessary at 31 December 2019 or whether there was any consequential effect on the cost of sales for the period ended 31 March 2021.
We have been unable to obtain sufficient appropriate audit evidence on which to confirm that stock valued at 31 December 2018 was not overstated. The auditors appointed for that year qualified their audit report as they were unable to obtain sufficient evidence on the calculation of production labour and overhead allocated to stock based on actual rather than normal capacity. We have been unable to satisfy ourselves by alternative means concerning the stock valuation at 31 December 2018 of £2,332,975. Consequently we were unable to determine whether there was any consequential effect on the cost of sales for the year ended 31 December 2019. Our audit opinion on the financial statements for the period ended 31 December 2019 was modified accordingly. Our opinion on the current period’s financial statements is also modified because of the possible effect of this matter on the comparability of the current period’s figures and the corresponding figures.
We have not been able to conclude whether debtors were overstated at 31 December 2018. Amounts receivable from the sale of goods included £189,000 on extended terms from a customer. Whilst the customer acknowledged the debt there was no available evidence to confirm the debt would be paid. During 2019, a full credit note was issued to the customer and the goods returned to stock. We have not been provided with conclusive evidence as to whether the customer had a right to return the goods and obtain a credit note as a result of conditions existing at 31 December 2018 or whether this arose as a result of a change in conditions after that date. Consequently we are unable to determine whether the related turnover was reflected in the correct accounting period. Our audit opinion on the financial statements for the period ended 31 December 2019 was modified accordingly. Our opinion on the current period’s financial statements is also modified because of the possible effect of this matter on the comparability of the current period’s figures and the corresponding figures.
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 qualified opinion.
Material uncertainty related to going concern
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We draw attention to note 2.3 in the financial statements, which indicates that the Company had net liabilities as at 31 March 2021 and is dependent on the parent entity (Tex Group Limited) continuing to provide financial support. Note 2.3 also describes the directors’ assessment of the current and future forecast trading of the group, which is uncertain. Although the directors have prepared detailed forecasts, the macro economy is in a state of significant uncertainty as it comes out of a global pandemic, and with war in Europe impacting demand, supply and prices across most sectors, and inflation rising rapidly. Consequently the full range of possible effects are unknown. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED) (CONTINUED)
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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' report has been prepared in accordance with applicable legal requirements.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED) (CONTINUED)
Matters on which we are required to report by exception
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Except for the matter described in basis for qualified opinion section of our report, 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 directors’ report.
Arising solely from the limitation of scope of our work relating to stock and debtors, referred to above:
• we have not received all the information and explanations we require for our audit; and
• we were unable to determine whether adequate accounting records have been kept.
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:
∙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
∙the directors were not entitled to take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement on page 3, 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.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED) (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We reviewed systems and procedures to identify potential areas of management override risk, in particular, we carried out testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions to identify large or unusual transactions. We reviewed key authorisation procedures and decision making processes for any unusual or one-off transactions;
• A review of directors' minutes to understand if any instances of non-compliance have occurred;
• A review of a sample of expenditure to ensure that costs are suitably authorised;
• We undertook testing to confirm the existence of a sample of employees (i.e. tracing to physical verification) to ensure that no fictitious employees are paid;
• Gained confirmation directly from the client's bank, of the accounts and balances held in their name as at the period-end;
• Reviewed legal expenses to identify any instances of non-compliance with laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk /Our-Work/Audit/Audit -and-assurance/Standards -and-guidance /Standards-and-guidance -for-auditors /Auditors-responsibilities -for-audit/Description -of-auditors -responsibilities -for-audit.aspx. This description forms part of our auditor’s report.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED) (CONTINUED)
This report is made solely to the Company's members 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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
Paul Cullen FCCA (Senior statutory auditor)
for and on behalf of
Price Bailey LLP
Chartered Accountants
Statutory Auditor
Tennyson House
Cambridge Business Park
Cambridge
Cambridgeshire
CB4 0WZ
17 May 2022
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 MARCH 2021
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Profit/(loss) on ordinary activities before interest
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Interest payable and expenses
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Loss for the financial period
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Total comprehensive income for the period/year
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There were no recognised gains and losses for 2021 or 2019 other than those included in the profit and loss account.
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The notes on pages 15 to 38 form part of these financial statements.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
REGISTERED NUMBER: 00194713
BALANCE SHEET
AS AT 31 MARCH 2021
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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 assets/(liabilities)
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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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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
REGISTERED NUMBER: 00194713
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 13 May 2022.
The notes on pages 15 to 38 form part of these financial statements.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2021
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Comprehensive income for the period
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Other comprehensive income for the period
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Total comprehensive income for the period
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The notes on pages 15 to 38 form part of these financial statements.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2019
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 15 to 38 form part of these financial statements.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
BSP TEX LTD is a private limited company incorporated in England. The registered office is Claydon Business Park, Gipping Road, Great Blakenham, Ipswich, Suffolk, IP6 0NL.
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:
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Financial reporting standard 102 - reduced disclosure exemptions
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The company 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 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Tex Holdings Plc as at 31 March 2021 and these financial statements may be obtained from Companies House.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons:
The directors have prepared cash flow forecasts for the group for a period of at least 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period.
Those forecasts are dependent on Tex Group Limited (formerly Tex Holdings Plc) providing additional financial support during that period. Tex Group Limited (formerly Tex Holdings Plc) has indicated its intention to continue to make available such funds as are needed by the company, for the period covered by the forecasts.
The macro economy is in a state of significant uncertainty as it comes out of a global pandemic, and with war in Europe impacting demand, supply and prices across most sectors, and inflation rising rapidly. Consequently the full range of possible effects are unknown and hence there is material uncertainty in relation to going concern.
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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.
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.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover 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 turnover is recognised:
Sale of goods
Turnover 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 turnover 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.
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Turnover from the design and manufacture of piling and drilling equipment is recognised on despatch to the customer. Where the Company is contractually bound to hold stock for a customer, turnover is recognised once the product has been manufactured.
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Operating leases: the Company as lessor
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Rentals income from operating leases is credited to profit or loss on a straight line basis over the term of the relevant lease.
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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.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
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Leased assets: the Company as lessor
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Where assets leased to a third party give rights approximating to ownership (finance lease), the lessor recognises as a receivable an amount equal to the net investment in the lease i.e. the minimum lease payments receivable under the lease discounted at the interest rate implicit in the lease. This receivable is reduced as the lessee makes capital payments over the term of the lease.
A finance lease gives rise to two types of income: profit or loss equivalent to the profit or loss resulting from outright sale of the asset being leased, at normal selling prices, reflecting any applicable discounts, and finance income over the lease term.
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Leased 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.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.
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.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
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 Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Multi-employer pension plan
The Company is a member of a multi-employer plan. Where it is not possible for the Company to obtain sufficient information to enable it to account for the plan as a defined benefit plan, it accounts for the plan as a defined contribution plan.
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Current and deferred taxation
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The tax expense for the period 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 corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet 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 Balance sheet 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 balance sheet date.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
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.
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.
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.
The estimated useful lives range as follows:
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Office furniture and equipment
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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.
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 weighted averagebasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet 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.
Hire stocks are written off to their estimated residual value over their expected hire life.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
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.
Trade debtors are amounts due from customers for services performed or merchandise sold in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
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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, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Trade creditors are obligations to pay for services of goods that have been acquired in the ordinary course of business from suppliers. Trade creditors 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 the transaction price and subsequently measured at amortised cost using the effective interest method.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance sheet date.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
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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 Balance sheet 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 Balance sheet.
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.
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 balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.
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
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
2.Accounting policies (continued)
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Financial instruments (continued)
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value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
Dividends are recognised as a liability only in the period in which they are approved.
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Provision for dilapidations
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Provisions for dilapidations are made when the decision has been made to vacate the premises.
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Intra-group financial instruments
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Where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company considers these to be insurance arrangements and accounts for them as such. In this respect, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make payment under the guarantee.
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Significant judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following have had the most significant effect on amounts recognised in the financial statements.
Provision for obsolete stock
The Company reviews its stock on a regular basis and, where appropriate, makes provision for slow-moving stock based on length of time held since last purchase. Estimation uncertainty arises in evaluating the likely recoverable amount of inventory held for extended periods.
Impairment of debtors
The Company reviews its debtors for recoverability on a monthly basis and will provide against those debtors where they have doubt over collection.
Stock valuation and overhead absorption
The Company reviews the valuation of the stock by ensuring that it is valued at the lower of cost and net realisable value. The stock system is systematically updated with the latest cost for stock purchases. The overheads are reviewed on an annual basis and an allocation of these are attributed to the stock value on a basis of direct labour hours and production overheads only.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
All turnover arose from one principal activity as disclosed in the directors’ report.
Analysis of turnover by country of destination:
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The operating profit/(loss) is stated after charging:
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Research & development charged as an expense
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Other operating lease rentals
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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The aggregate payroll costs of the employees 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 period was as follows:
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Company contributions to defined contribution pension schemes
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During the period retirement benefits were accruing to 4 directors (2019 - 3) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £83,504 (2019 - £65,490).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £4,510 (2019 - £3,315).
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Interest payable and similar expenses
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Loans from group undertakings
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Finance leases and hire purchase contracts
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Taxation on (loss)/profit on ordinary activities
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
10.Taxation (continued)
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Factors affecting tax charge for the period/year
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The tax assessed for the period/year is higher than (2019 - higher than) the standard rate of corporation tax in the UK of 19% (2019 - 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% (2019 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Other permanent differences
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Movement in deferred tax not recognised
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Other differences leading to an increase (decrease) in the tax charge
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Adjustments to tax charge in respect of previous periods
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Remeasurement of deferred tax for changes in tax rates
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Total tax charge for the period/year
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Factors that may affect future tax charges
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Changes to the UK corporation tax rates were substantively enacted as part of the 2021 Budget on 03 March 2021. This included an increase to the main rate to increase the rate from 19% to 25% from 01 April 2023. The company will be taxed at a rate of 25% unless its taxable profits are sufficiently low enough to qualify for a lower rate of tax, the lowest rate being 19%. Deferred taxes at the balanace sheet date have been measured using tax rates between 19% and 25% to reflect the rate the timing difference is likely to unwind and are reflected in these financial statements.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Write back of loan from Tex Group Limited (formerly Tex Holdings plc)
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The restructuring costs relate to redundancies that occurred within the year to 31 December 2019 following a review of the business. The write back of the loan from Tex Group Limited (formerly Tex Holdings plc) was completed on 9 February 2021 and a new loan agreement was drawn up on the same date.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Charge for the period on owned assets
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Raw materials and consumables
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Work in progress (goods to be sold)
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Finished goods and goods for resale
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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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 finance lease and hire purchase contracts
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Accruals and deferred income
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Amounts due to group undertakings carry interest at 7.5% (2019: 7.5%). There is now a formal repayment agreement in place to repay the loan balance with Tex Group Limited (formerly Tex Holdings plc) over 10 years.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Amounts owed to group undertakings
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The aggregate amount of liabilities repayable wholly or in part more than five years after the balance sheet date is:
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Repayable by instalments - Tex Holdings plc loan
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Repayable by instalments - Tex Engineering Ltd loan
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Amounts due to group undertakings carry interest at 7.5%. There is now a formal repayment agreement in place to repay the loan balance with Tex Group Limited (formerly Tex Holdings plc) over 10 years.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Charged to profit or loss
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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The deferred tax is expected to reverse over the life of the assets it relates to.
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Charged to profit or loss
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This provision relates to dilapidations at the Chorley site.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
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Authorised, allotted, called up and fully paid
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50,000 (2019 - 50,000) Ordinary shares of £1.00 each
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Legal mortgages over the freehold and long leasehold properties and a charge over all fixed and floating assets have been lodged with the group's bank in connection with the group's facilities.
Defined benefit scheme
The company is a member of a larger group pension scheme providing benefits based on final pensionable pay. Because the company is unable to identify its share of the scheme assets and liabilities on a consistent and reasonable basis, the scheme has been accounted for, in these financial statements as if the scheme was a defined contribution scheme. The scheme has been closed to new members and has been closed to benefit accruals from 6 April 2002.
The latest full actuarial valuation was carried out at 5 April 2017 and was updated for FRS 102 purposes to 31 March 2021 by a qualified independent actuary. The level of contributions are determined by a qualified actuary on the basis of triennial valuations using the projected unit method.
Further details regarding the scheme and the most recent actuarial valuation are set out in the accounts of Tex Group Limited (formerly Tex Holdings plc).
The pension cost charge for the year represents contributions payable by the company to this scheme and amounted to £nil (December 2019: £29,703). No provisions or prepayments are included within the accounts of the company as a result of a difference between the amounts recognised as cost and the amounts funded or paid directly.
Defined contribution scheme
The final salary scheme has been replaced with a group personal pension plan. Eligible employees take out an individual contract with Standard Life to which the company pays a fixed contribution.
The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £54,740 (December 2019: £29,771). There were no outstanding or prepaid contributions at either the beginning or end of the financial year.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
|
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Commitments under operating leases
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At 31 March 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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A R B Burrows has an interest in Edward Le Bas Properties Limited through which the Group rents properties. Transactions during the year ended 31 March 2021 that require disclosure, are detailed below:
Rentals paid £356,852 (31 December 2019: £276,914)
Trade creditor £11,626 (31 December 2019: £10,551)
A R B Burrows has an interest in IS&G Steel Stockholders Limited through which the Group purchases steel. Transactions during the period ended 31 March 2021 that require disclosure are detailed below:
Purchases £24,830 (31 December 2019: £2,080)
Trade creditor £31,220 (31 December 2019: £935)
A R B Burrows is a trustee and a beneficiary of the Pension and Assurance Scheme of Edward Le Bas Limited which is a substantial shareholder in the ultimate parent company.
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Post balance sheet events
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On 16 September 2021 the group entered into a new overdraft facility with its bank. As part of the new agreement the Tex Group Limited (formerly Tex Holdings plc), which includes BSP TEX Limited (formerly BSP International Foundations Limited), will have a facility of £5,000,000. The Company has given an unlimited guarantee in relation to this facility.
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BSP TEX LTD (FORMERLY BSP INTERNATIONAL FOUNDATIONS LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
The company is a subsidiary undertaking of Tex Group Limited (formerly Tex Holdings plc) incorporated in England and Wales. Tex Group Limited (formerly Tex Holdings plc) is also the controlling party.
The ultimate controlling party is the Edward Brocas Burrows 2001 Settlement Trust.
The largest and smallest group in which the results of the company are consolidated is that headed by Tex Group Limited (formerly Tex Holdings plc). No other group financial statements include the results of the company. The consolidated financial statements of these groups are available to the public and may be obtained from Claydon Business Park, Gipping Road, Ipswich, Suffolk, IP6 0NL.
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