Emtec Fire Systems Ltd - Accounts to registrar (filleted) - small 23.1.2

REGISTERED NUMBER: SC416998 (Scotland)

Financial Statements for the Year Ended 31 December 2022

for

EMTEC FIRE SYSTEMS LTD

Page

Company Information

1

Statement of Financial Position

2

Notes to the Financial Statements

3

DIRECTORS:

S P Stevenson

S Barclay

C Sands

M J Clinch

A T McKenzie

W Ottilinger

REGISTERED OFFICE:

29 Brandon Street

Hamilton

ML3 6DA

REGISTERED NUMBER:

SC416998 (Scotland)

AUDITORS:

RSM UK Audit LLP, Statutory Auditor

Chartered Accountants

Third Floor

2 Semple Street

Edinburgh

EH3 8BL

BANKERS:

Bank of Scotland plc

Glasgow Chief Office

PO Box 17235

Edinburgh

EH11 1YH

FIXED ASSETS

Tangible assets

5

18,569

14,980

CURRENT ASSETS

Debtors

6

2,140,918

1,446,336

Cash at bank

284,767

156,044

2,425,685

1,602,380

CREDITORS

Amounts falling due within one year

7

2,403,548

1,594,835

NET CURRENT ASSETS

22,137

7,545

TOTAL ASSETS LESS CURRENT LIABILITIES

40,706

22,525

PROVISIONS FOR LIABILITIES

4,642

2,846

NET ASSETS

36,064

19,679

CAPITAL AND RESERVES

Called up share capital

100

100

Retained earnings

35,964

19,579

SHAREHOLDERS' FUNDS

36,064

19,679

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Statement of Comprehensive Income has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 5 June 2023 and were signed on its behalf by:

S P Stevenson - Director

1.	COMPANY INFORMATION

Emtec Fire Systems Ltd is a private company, limited by shares , registered in Scotland. The company's registered number and registered office address can be found on the Company Information page.

The principal activity of the company in the year under review was that of a contractor specialising in fire prevention and detection systems.

2.	ACCOUNTING CONVENTION

These financial statements have been prepared in accordance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102") and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The presentation currency of the financial statements is the Pound Sterling (£).

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention and on a going concern basis.

The Directors have prepared detailed forecasts, covering a period of at least 12 months from the date of signature of these financial statements, which show that the company will trade profitably over the following 12 months. The forecasts were largely built based on work already secured at the time of writing and orders close to being secured in the period.

The company owes £1,370k to the parent company. Treasury management arrangements are in place across the wider group to support with cash requirements. Emtec Group Limited, as group parent, has confirmed that group balances will not be sought to the detriment of any of the subsidiary entities in the forecast period.

The Directors, with reference to the forecasts prepared and group letter of support, continue to adopt the going concern basis when preparing the financial statements. In making their assessment the Directors have considered a period of at least 12 months from the date of signature of these financial statements.

Turnover and revenue recognition

Turnover is derived from the various contracting activities of the company which includes construction contracts, maintenance contracts and other small works either on a fixed price or time and materials basis.

When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, turnover and costs are recognised over the period of the contract.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

When the outcome of a construction contract cannot be estimated reliably, contract turnover is recognised only to the extent of contract costs that it is probable will be recovered.

Contract costs include direct costs incurred in securing the contract that can be separately identified and measured reliably, if it is probable that the contract will be obtained. Costs incurred in securing a contract which have been expensed as incurred, are not included in contract costs if the contract is subsequently obtained.

The company uses the "percentage of completion method" to determine the appropriate amount to recognise in a given period usually with reference to work applied for on a monthly basis. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded for contract costs in determining the stage of completion. These costs are presented as amounts recoverable on contracts provided it is probable they will be recovered.

Revenue in relation to maintenance contracts is recognised as costs are incurred. Work in progress is recognised in relation to minor additional works where the cost has been incurred and it is probable that the consideration due will be received.

Retentions are recognised in revenue following an assessment of their likely recoverability.

Construction contract debtors

Construction contract debtors (amounts recoverable on contracts) represent the gross unbilled amount for contract work performed to date. They are measured at cost plus profit recognised to date (see the turnover accounting policy) less a provision for foreseeable losses and less progress billings. Variations are included in contract revenue when they are reliably measurable and it is probable that the customer will approve the variation itself and the revenue arising from the variation. Claims are included in contract revenue only when they are reliably measurable and negotiations have reached an advanced stage such that it is probable that the customer will accept the claim. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the entity's contract activities based on normal operating capacity. Construction contract debtors (amounts recoverable on contracts) are presented as part of debtors in the balance sheet. If payments received from customers exceed the income recognised, then the difference is presented as accruals and deferred income in the balance sheet.

Other income

Other income includes management charges applied to other group entities.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Plant and machinery

-

Straight line over 5 years

Fixtures and fittings

-

Straight line over 2 years

Motor vehicles

-

25% on reducing balance

At each statement of financial position date, the company reviews the carrying amounts of its tangible fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of the asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102, in full, to all of its financial instruments.

Recognition and measurement of financial instruments:

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument.

Classification of financial instruments:

Financial instruments are classified as liabilities and equity instruments according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Trade, group and other debtors:

Trade, group and other debtors (including accrued income) which are receivable within one year and which do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses.

Where the arrangement with a debtor constitutes a financing transaction, the debtor is initially measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument and subsequently measured at amortised cost, using the effective interest method. The effective interest rate is the market rate used to determine initial measurement adjusted to amortise directly attributable transaction costs.

A provision for impairment of trade debtors is established when there is objective evidence that the amounts due will not be collected according to the original terms of the contract. Impairment losses are recognised in profit or loss for the excess of the carrying value of the trade debtor over the present value of the future cash flows discounted using the original effective interest rate. Subsequent reversals of an impairment loss that objectively relate to an event occurring after the impairment loss was recognised, are recognised immediately in profit or loss.

Cash and cash equivalents:

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings or current liabilities.

Trade creditors, group and other creditors:

Trade, group and other creditors (including accruals) payable within one year that do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being transaction price less any amounts settled.

Where the arrangement with a creditor constitutes a financing transaction, the creditor is initially measured at the present value of future payments discounted at a market rate of interest for a similar instrument and subsequently measured at amortised cost, being transaction price less any amounts settled and the cumulative amortisation (using the effective interest method) of any difference between the amount at initial recognition and the maturity amount. The effective interest rate is the rate that discounts estimated future cash payments to the carrying amount of the financial liability.

Derecognition of financial assets and liabilities:

A financial asset is derecognised only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some (but not substantially all) risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets

are recognised when tax paid exceeds the tax payable.

Current and deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.

Current tax is based on taxable profit for the year.

Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

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

Pension costs and other post-retirement benefits

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

4.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 40 (2021 - 48 ) .

5.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 1 January 2022

44,510

Additions

14,079

Disposals

(25,916

)

At 31 December 2022

32,673

DEPRECIATION

At 1 January 2022

29,530

Charge for year

4,731

Eliminated on disposal

(20,157

)

At 31 December 2022

14,104

NET BOOK VALUE

At 31 December 2022

18,569

At 31 December 2021

14,980

6.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade debtors

331,389

363,447

Amounts recoverable on contracts

1,590,066

1,072,889

Other debtors

219,463

10,000

2,140,918

1,446,336

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade creditors

864,503

715,825

Amounts owed to group undertakings

1,370,001

669,815

Taxation and social security

64,804

111,418

Other creditors

104,240

97,777

2,403,548

1,594,835

8.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2022

2021

£

£

Within one year

47,288

47,455

Between one and five years

30,753

75,992

78,041

123,447

9.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Claire Monaghan (Senior Statutory Auditor)

for and on behalf of RSM UK Audit LLP, Statutory Auditor

10.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the year ended 31 December 2022 and the period ended 31 December 2021:

2022

2021

£

£

S Barclay

Balance outstanding at start of year

10,000

-

Amounts advanced

-

10,000

Amounts repaid

(10,000

)

-

Amounts written off

-

-

Amounts waived

-

-

Balance outstanding at end of year

-

10,000

This balance was unsecured, interest free and had no fixed repayment terms.

11.	RELATED PARTY DISCLOSURES

During the year, total dividends of £100,003 were paid to the directors .

The company has an intercompany loan balance with Emtec Group Ltd and its subsidiary undertakings. The loan is unsecured, interest free and has no fixed repayment terms. During the year intercompany loans of £100,000 (2021 - £100,000 provision) due to Emtec Group Ltd and its subsidiary undertakings that had previously been provided against were reinstated. At the year end the company owed £1,370,001 (2021 - £669,815) to Emtec Group Ltd and its subsidiary undertakings.

12.	ULTIMATE PARENT COMPANY

The ultimate parent company undertaking is Fr. Sauter Ag. and consolidated financial statements may be obtained from its registered office at 55 Im Surinam, Basel, Switzerland.

The immediate parent company is Emtec Group Limited which is registered in Scotland. Copies of this company's financial statements can be obtained from its registered office at 29 Brandon Street, Hamilton, ML3 6DA.