F I H G R O U P P L C
A N N U A L R E P O R T
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Contents
Financial Highlights For The Year Ended 31 March 2023
Chairman’s Statement 2023
Chief Executive’s Strategic Review
Board of Directors and Secretary
Corporate Governance Statement
Audit Committee Report
Directors’ Report
KPMG Independent Auditor’s Report
Consolidated Income Statement For The Year Ended 31 March 2023
Consolidated Statement of Comprehensive Income For The Year Ended 31 March 2023
Consolidated Balance Sheet At 31 March 2023
Company Balance Sheet At 31 March 2023
Consolidated Cash Flow Statement For The Year Ended 31 March 2023
Company Cash Flow Statement For The Year Ended 31 March 2023
Consolidated Statement of Changes in Shareholders’ Equity For The Year Ended 31 March 2023
Company Statement of Changes in Shareholders’ Equity For The Year Ended 31 March 2023
Notes to the Financial Statements
Directors and Corporate Information
1
2
3
14
16
19
21
30
40
41
42
43
44
46
47
48
49
97
1
Financial Highlights
FOR THE YEAR ENDED 31 MARCH 2023
Turnover from continuing operations
Profit before tax
Underlying profit before tax*
Cash flow from operations
Diluted earnings per share before non-trading items
Diluted earnings per share
* Defined as profit before tax and non-trading items
2023
£’m
52.7
4.0
3.2
5.7
20.1p
24.9p
Change
£’m
12.4
1.3
0.9
0.6
2022
£’m
40.3
2.7
2.3
5.1
9.5p
11.9p
Turnover (£’m)
Underlying profit before tax* (£’m)
52.7
42.5
44.6
40.3
32.6
3.9
3.7
3.2
2.3
0.1
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Diluted earnings per share* (pence)
before non-trading items
Dividends per share (pence)
6.5
5.0
24.1
21.7
20.1
1.8
9.5
0.0
3.0
0.0
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Profit before tax was as follows: 2023: £4.0m 2022: £2.7m, 2021: £0.2m, 2020: £3.8m loss, 2019: £3.9m
Diluted EPS was as follows: 2023: 24.9p 2022: 11.9p, 2021: 0.1p, 2020: (37.8p), 2019: 24.1p
ANNUAL REPORT 2023 Chairman’s Statement 2023
2
I am pleased to report a year of solid
performance with record revenues
for the Group and earnings growth
in all three divisions, delivering an
underlying pre-tax profit of
£3.2 million.
This is due in no small part to the Group’s employees
and I would like to take this opportunity to thank each of
them for their contribution to such a strong improvement
in performance.
The balance sheet remains strong, with cash of £12.8
million at 31 March 2023 (2022 £9.6 million) and net debt
(cash and cash equivalents less bank loans) improving by
£4.1 million to £0.5 million (2022: £4.6 million).
Dividend
Following the payment of an interim dividend of 1.2 pence
per share paid in January 2023 and reflecting the continued
improvement in trading since the half year, I am pleased to
announce that a final dividend of 5.3 pence per share will be
proposed at our forthcoming Annual General Meeting. This
will take the total dividend paid for the year ended 31 March
2023 to 6.5 pence per share (2022: 3.0 pence per share).
Board and Governance
On 12 September 2022, Reuben Shamu was appointed as
Chief Financial Officer and on 21 September 2022, Jeremy
Brade stepped down from his position as non-executive
director of the Group.
Holger Schröder was appointed as a non-executive
director of the Group on 1 June 2023. Holger has over
28 years’ experience gained in a variety of predominantly
Swiss companies, most recently as the CFO and a board
member of Janser Group which controls 12.6% of the
Company’s equity. His experience and business knowledge
will be of great benefit and the strengthening of shareholder
representation on the Board should add further support to
the Group’s strategic direction.
As announced on 24 February 2023, I will not be
seeking re-election to the Board at the Company’s AGM
in September. The Board is considering options for its
constituent members, including the recruitment of an
additional independent non-executive director, and will
make an announcement in due course.
Outlook and Strategy
Despite difficult trading conditions, performance has
continued to progress, giving confidence that the Group
strategy, as detailed in the CEO’s Strategic Review, is on
course. Increased focus can now be brought to bear on
opportunities to invest in further developing the Group’s
existing businesses and on potential complementary
that either strengthen existing
strategic acquisitions
operations or provide improved growth opportunities.
Robin Williams
Chairman
4 August 2023
ANNUAL REPORT 2023 3
Chief Executive’s Strategic Review
BUSINESS REVIEW
(i) Favourable fair value movements on the non-effective
portion of derivative financial instruments used to hedge
interest rate fluctuations of £0.9 million (2022: £0.7 million).
(ii) £0.1 million of employee redundancy costs in the current
year and £0.3 million of people-related costs in the prior
year, including employee redundancies and compensation
payable to the former Chief Executive. Management
consider that separate presentation of these items is
appropriate to facilitate year on year comparison of
performance of the Group.
Group Revenue 2023
Momart
37%
FIC
56%
PHFC
7%
Group Revenue 2022
Momart
39%
FIC
54%
PHFC
7%
Overview
The progress demonstrated in the Group’s first half results
continued in the traditionally stronger second half of the
year.
Total revenue of £52.7 million was a record for the Group
and 31% ahead of the prior year. Trading in all three divisions
and across all their business sectors continued to improve,
resulting in an overall underlying profit before tax of £3.2
million, circa 39% ahead of the prior year and an underlying
earnings per share of 20.1p (2022: 9.5p). Pre-tax profit was
£4.0 million (2022: £2.7 million following restatement as
detailed in note 1 to the financial statements).
The Group results were underpinned by a net cash flow
from operating activities of £7.5 million, which included a
£1.4 million improvement in working capital.
Group Trading Results for the Year Ended
31 March 2023
A summary of the trading performance of the Group is
given in the table below.
Group revenue
Year ended 31 March
Falkland Islands Company
Momart
Portsmouth Harbour Ferry
Total revenue
Group underlying pre-tax profit*
Falkland Islands Company**
Momart**
Portsmouth Harbour Ferry**
Total underlying pre-tax profit*
Non-trading items
(see notes below)***
Reported profit before tax
2023
£m
29.4
19.5
3.8
52.7
1.9
1.0
0.3
3.2
0.8
4.0
2022
£m
Change
%
21.6
36.6%
15.6
25.0%
3.1
22.6%
40.3
31.0%
1.8
0.6
5.6%
66.7%
(0.1)
400%
2.3
39.1%
0.4 100.0%
2.7
48.1%
* Underlying pre-tax profit is defined as profit before tax before
non–trading items.
** As in prior years, the profits reported for each operating
company are stated after the allocation of head office
management and plc costs which have been applied to each
subsidiary on a consistent basis.
*** Non-trading items were comprised of the following:
ANNUAL REPORT 2023
Underlying operating profit 2023
Underlying operating profit 2022
4
Momart
36%
FIC
49%
Momart
35%
FIC
60%
PHFC
15%
PHFC
5%
Group Operating Company
Performance
Falkland Islands Company (“FIC”)
Total revenue increased by 36.6% to £29.4 million, with
improvements across all sectors of the division. Falkland
Business Services (“FBS”) was the predominant growth
area, driven by the £17.3 million housing contract
to construct seventy houses for the Falkland Islands
Government (“FIG”) and the UK Ministry of Defence (“MOD”)
secured in November 2021.
The ban on tourists entering the Falkland Islands was lifted
in May 2022 and Stanley once again welcomed visitors
arriving on cruise ships in the austral summer season. Over
59,000 tourists visited (2022: nil), despite some vessels
cancelling their visits at short notice due to changeable
weather conditions.
Whilst the retail environment continued to be challenging,
the strong tourist season, combined with targeted price
increases, resulted in a recovery in retail revenue compared
to the year on year revenue reduction experienced in the
first half of the year.
The overall underlying pre-tax profit for FIC of £1.9 million
was 5.6% ahead of the prior year, albeit at a reduced level
of profit margin, due largely to the mix and proportion of
FBS activity.
FIC Operating Results
Year ended 31 March
Revenues
2023
£m
2022
£m
Change
%
FBS (housing and construction)
12.1
Retail
Falklands 4x4
Support services
Property rental
9.9
3.1
3.3
1.0
5.8
9.7
2.8
2.5
0.8
Total FIC revenue
29.4
21.6
FIC underlying operating profit
2.0
1.9
Net interest expense
(0.1)
(0.1)
FIC underlying profit before tax
1.9
1.8
112.1
2.1
10.7
32.0
25.0
36.6
5.3
-
5.6
FIC underlying operating profit margin
6.8% 8.8%
(22.7)
FIC Divisional Activity
FBS revenue increased by 112.1% driven mainly by the
£17.3 million contract to build a total of 70 houses for
FIG and the MOD. The first 10 houses were handed over
at Bennetts Paddock in Stanley for FIG and 5 at Mount
Pleasant Camp for the MOD. Circa £1.9 million of variation
orders have been received on this contract, including
the construction of a road providing easier access to the
housing units under construction. Other orders included
the construction of a wool storage warehouse for the
Falkland Islands Development Corporation, which is due to
be completed by the end of 2023. £1.4 million of the orders
were received after the balance sheet date.
Retail was impacted by global inflationary pressures which
drove increases in both product prices and freight costs, as
well as having an adverse impact on the disposable income
of Falklands Islands residents. A strong performance from
tourist sales driven by an increase in visitors, offset shortfalls
in locally-derived business, resulting in a small increase in
revenue.
ANNUAL REPORT 2023
5
Chief Executive’s Strategic Review
BUSINESS REVIEW
At Falklands 4x4, the sale of new and used vehicles
remained stable, albeit with a change in mix with a greater
proportion of quad and motor bike sales. The increase in
revenue came from an increase in vehicles rentals and the
sale of spare parts. Falklands 4x4 has become an authorised
distributor of the new Ineos Grenadier 4x4 vehicle and first
deliveries are expected in 2023.
In Support Services, the revenue increase arose mainly in
Penguin Travel, FIC’s tourism business, where the arrival of
tourists saw revenue increasing three-fold on the prior year.
Cruise ship capacity for next summer season shows further
potential growth opportunities, with circa 100,000 tourists
expected between late September and mid-March 2024.
In Rental Properties, improving occupancy and a small
increase in the number of units in the property portfolio
resulted in revenue of £1.0 million, which was £0.2 million
above the previous year. The market place remains
buoyant, with potential new tenants waiting for units to
become available.
FIC Key Performance Indicators and
Operational Drivers
Year ended 31 March
2019
2020
2021
2022
2023
Staff numbers
(FTE 31 March)*
Capital expenditure
£’000
175
214
206
232
242
2,348
2,685
1,060
2,434
1,206
Retail sales growth %
+5.7
+3.1
-3.0
-0.1
+2.1
Number of FIC rental
properties**
Average occupancy
during the year %
Number of vehicles sold
Number of 3rd party
houses sold***
Illex squid catch in
tonnes (000’s)
Cruise ship passengers
(000’s)
54
65
75
83
84
76
6
89
71
22
93
71
15
86
81
11
85
90
82
14
57.4
57.6
106.1
123.8
66.8
62.5
72.1
Nil
Nil
73.4
* Restated to include FIC staff in the UK.
**Includes ten mobile homes rented to staff.
***Relates to kit home sales to third parties and excludes
houses built under contract for FIG.
FIC constructing a path
FIC revenues 2023
FIC revenues 2022
Support
Services
11%
Property
Rental
3%
Support
Services
12%
Property
Rental
4%
FBS
41%
Retail
34%
4x4
10%
FBS
27%
Retail
44%
4x4
13%
ANNUAL REPORT 2023 Momart
Momart Operating results
Revenue of £19.5 million was £3.9 million (25%) ahead
of the prior year with improvements across all sectors of
the business.
The strong growth in Museum Exhibitions was pleasing
given that the sector is still recovering from the impact
of Covid-19, both in terms of exhibition funding and
visitor numbers. It reflects a steady pattern of project
winning and an increasing number of smaller un-tendered
one-off projects.
Gallery Services also showed significant progress,
assisted by a broadening and deepening of existing client
relationships and new client wins.
The improvement in Storage revenue was driven by
a combination of an improvement in fill rate and price
increases. Encouragingly, a number of long-standing clients
have indicated their intention to continue and expand their
use of Momart’s storage facilities.
The improvements across all sectors resulted in an
underlying pre-tax profit of £1.0 million (2022: £0.6 million)
with margin improvements from a higher volume of work
relative to the fixed cost base, combined with better
utilisation of staff.
6
2023
£m
2022
£m
Change
%
Year ended 31 March
Revenues
Museum Exhibitions
Gallery Services
Storage
9.5
7.3
2.7
7.4
5.8
2.4
28.4
25.9
12.5
25.0
40.0
-
Total Momart revenue
19.5
15.6
Momart underlying operating profit
1.4
1.0
Net Interest expense
(0.4)
(0.4)
Momart underlying profit/(loss)
before tax
Momart underlying operating
profit margin
1.0
0.6
66.7
7.2% 6.4%
12.5
Momart Key Performance Indicators
Year ended 31 March
2019
2020
2021
2022
2023
Staff numbers
(FTE 31 March)
Capital expenditure
£’000’s
Warehouse % fill vs
capacity
Momart services
charged out
Revenues from
overseas clients
140
133
107
99
110
20,034
638
540
258
573
81.1% 86.9% 82.9% 84.0% 86.4%
£11.5m £10.8m £6.5m £9.1m £10.8m
£7.5m £6.2m £2.7m £5.5m £6.7m
Exhibitions sales growth
-6.5% -2.1% -58.3% 64.4% 28.4%
Gallery Services
sales growth
4.0% -22.4% -41.4% 70.6% 25.9%
Storage sales growth
-6.3% 5.8% 9.1% 0.0% 12.5%
Total sales growth
-2.9% -8.7% -45.5% 51.5% 25.0%
Momart work for Royal Academy.
Note*: Due to the impact of COVID-19, meaningful data for
secure forward orders was not available.
Momart revenues 2023
Momart revenues 2022
Storage
14%
Commercial
Gallery
Services
37%
Museums
and Public
Exhibitions
49%
Storage
15%
Commercial
Gallery
Services
37%
Museums
and Public
Exhibitions
48%
ANNUAL REPORT 2023 7
Chief Executive’s Strategic Review
BUSINESS REVIEW
Portsmouth Harbour Ferry Company (“PHFC”)
Passenger numbers at PHFC continued to recover, resulting in an overall passenger volume for the year of 80% of pre-COVID
levels compared to 70% in the prior year. Along with careful management of costs and inflation-mitigating fare rises, this
resulted in an underlying pre-tax profit for the first time since the pandemic.
PHFC Operating results
Year ended 31 March
Revenues
Ferry fares & other revenue
Total PHFC revenue
PHFC underlying operating
profit/(loss)
Pontoon lease liability & Boat loan
finance expense
PHFC underlying profit / (loss)
before tax
2023
£m
2022
£m
Change
%
3.8
3.8
0.6
3.1
3.1
0.2
22.6
22.6
200
(0.3)
(0.3)
-
0.3
(0.1)
400
PHFC Key Performance Indicators and Operational Drivers
One of the three ferries at work.
Year ended 31 March
2019
2020
2021
2022
Staff numbers (FTE at 31 March)
Capital expenditure £’000’s
Ferry reliability (on time departures)
Number of weekday passengers ‘000’s
% change on prior year
Number of weekend passengers ‘000’s
% change on prior year
37
50
99.8
1,834
-2.3
722
-1.6
36
65
99.8
1,706
-7.0
659
-8.7
Total number of passengers ‘000’s
2,556
2,365
% change on prior year
Revenue growth %
-2.1
0.4
-7.5
-5.5
25
-
99.9
613
-64.1
195
-70.4
808
-65.8
-65.9
Average yield per passenger journey*
£1.62
£1.69
£1.76
*Total ferry fares divided by the total number of passengers
26
52
99.9
1,188
93.8
500
156.4
1,688
108.9
114.2
£1.76
2023
26
205
99.8
1,372
15.4
576
15.2
1,948
15.4
19%
£1.91
ANNUAL REPORT 2023
8
Trading Outlook
The overall trading outlook for the Group remains positive.
In FIC, the return of tourism to the Falkland Islands should continue to boost both direct and indirect revenues across a
number of business sectors, which should help to mitigate the challenges of the current global economic crisis. This,
combined with a continued strong order book in FBS and the potential for new contracts with the MOD and FIG, bodes
well for the future.
At Momart, the market, continues to recover and a renewed focus on actively developing business with both existing and
prospective clients should continue to yield growth opportunities for the business.
PHFC returned to profit, albeit passenger numbers are not yet back to pre-COVID levels, which is consistent with other
analogous UK transport providers. Available capacity means that future passenger growth can be accommodated without
a commensurate increase in cost, which would further improve profitability. However, costs and fare pricing will continue
to be carefully managed.
The challenge of the global economic crisis remains, but the progress delivered to date, an ongoing focus on pricing and
cost control and the strength that the Group’s geographical breadth and diversity of operations brings, gives confidence
for the future.
Group Strategy
The aim of the Board is to build a Group of greater scale, providing consistent earnings growth and cash generation that will
provide shareholders with both predictable capital growth and regular dividend income. To deliver this, the Group strategy
has three key strands:
Build the profits of the existing businesses back to and beyond the pre-COVID position. As evidenced by the
improved results delivered across all divisions, good progress was made during the year, but more remains to be done.
Invest in developing the existing businesses. The Board continues to be focussed on capitalising on potential
opportunities for further work for FIG and the MOD, building on the £17.3 million housing contract awarded in November
2021. During the year, additional work was awarded under this contract, including the construction of a road adjacent
to the houses being constructed at the Mount Pleasant Camp. In addition, potential opportunities to maximise returns
from existing FIC land assets are being explored. The potential for additional opportunities arising from the development
of the Sea Lion oil field continues to be monitored closely. However, the Board does not rely in its planning on any such
development due to the uncertain and lengthy timescales involved and the undefined nature of any benefit which might
accrue to FIC.
Explore the potential for strategic acquisitions. This could provide a step change in the scale of FIH, but acquisitions
will only be considered if they either add to existing activities or bring growth potential from other attractive sectors, can be
secured at an appropriate price and are within the capacity of the senior executive team to integrate and optimise without
negatively impacting the performance of the existing businesses. A number of opportunities were reviewed during the year,
but none met the required criteria.
ANNUAL REPORT 2023 9
Chief Executive’s Strategic Review
RISK MANAGEMENT
Risk Management, Principal Risks and Impact
The Board is ultimately responsible for setting the Group’s risk appetite and for overseeing the effective management
of risk. The Group faces a diverse range of risks and uncertainties which could have an adverse effect on results if not
managed. The principal risks facing the Group have been identified by the Board and the mitigating actions agreed with
senior management and are discussed in the following table:
OPERATIONAL RISKS
Risk
Comment
PANDEMIC
Failure to respond in time to the impact of a future
pandemic may result in disruption to the Group’s
operations through staff absenteeism, disruption
to supply chains and the logistics the Group’s
businesses rely on to deliver products and services to
customers.
Whilst the prevalence and severity of the impact of
COVID continues to diminish, other similar future virus
outbreaks cannot be discounted.
A watching brief will be maintained, utilising previous
learning to assess the impact of potential virus
outbreaks on operations should they arise, and to
determine appropriate mitigating actions.
Overall Impact
Low - decreased
CYBER RISK
A cyber security breach can result in unauthorised
access to company information, potential misuse of
information systems, technology or data.
There is a growing level of sophistication, scale and
volume of targeted cyber incidents which could impact
on group trading and potential loss of assets.
Moderate - new
DATA PRIVACY
Failure to comply with legal or regulatory requirements
relating to data privacy in the course of business
activities potentially leading to adverse consequences,
penalties or consequential litigation.
HEALTH AND SAFETY
The Group is required to comply with laws and
regulation governing occupational health and safety
matters. Furthermore, accidents could happen which
might result in injury to an individual, claims against
the Group and damage to our reputation.
COMPLIANCE
Failure to comply with the frequently changing
regulatory environment could result in reputational
damage or financial penalty.
A full review of the IT security environment has been
commissioned to modernise prevention measures
across the Group.
Governance and oversight protocols are regularly
reviewed to maintain vigilance in protection of the
Group’s customer and staff data.
Low - new
Health & Safety (“HSE”) matters are considered a
key priority for the Board of FIH and all its operating
companies.
Low - unchanged
All staff receive relevant HSE training when joining the
Group and receive refresher and additional training as is
necessary. Training courses cover maritime safety, lifting
and manual handling, asbestos awareness and fire
extinguisher training. External HSE audits are conducted
on a regular basis
The regulatory environment continues to become
increasingly complex.
Low - unchanged
The Group uses specialist advisers to help evolve
appropriate policies and practices. Close monitoring
of regulatory and legislation changes is maintained to
ensure our policies and practices continue to comply
with relevant legislation.
Staff training is provided where required.
ANNUAL REPORT 2023 10
POLITICAL RISKS
Risk
Comment
Historically, Argentina has maintained a claim to the
Falkland Islands and this dispute has never been
officially resolved.
Relations between the UK and Argentina continue to be
strained.
Potential Impact
Low - unchanged
However, the security afforded by the UK Government’s
commitment to the Islands upholds the freedom and
livelihood of the people of the Falkland Islands and
thereby of FIC.
Provided UK Government support is maintained the
security of the people of the Falkland Islands is judged
to at low risk.
ECONOMIC CONDITIONS
Risk
Comment
Inflationary pressures across all Group businesses
impact the cost of wages, services and products.
Continued focus on cost efficiency. Customer and
supplier contracts structured to limit or pass on inflation
risk. Cost inflation monitored closely and passed on to
customers via price increases wherever possible.
CREDIT RISK
Risk
Comment
Credit risk is the risk of financial loss if a customer fails
to meet its contractual obligations.
Effective processes are in place to monitor and recover
amounts due from customers.
COMPETITION
Risk
FIC is considered by the senior management to be a
market leader in a number of business activities, but
faces competition from local entrepreneurs in many of
the sectors in which it operates.
Comment
Local competition is healthy for FIC and stimulates
continuing business improvement.
Potential Impact
High - unchanged
Potential Impact
Low - unchanged
Potential Impact
Low - unchanged
Momart sits in a highly competitive market, with both
UK and International competitors investing for growth.
Largely unchanged.
Large capital infrastructure investment projects may
entice larger overseas businesses to look at the
opportunities available and reduce the ability of FIC to
undertake the work.
FIC has been successful in winning work against
overseas competitors and has built up strong links with
FIG and MOD.
Being located in the Falkland Islands gives FIC a
competitive advantage against overseas companies.
Moderate - unchanged
Moderate - unchanged
FOREIGN CURRENCY AND INTEREST RATE RISK
Risk
Comment
Momart is exposed to foreign currency risk arising
from trading and other payables denominated in
foreign currencies.
Forward exchange contracts are used to mitigate this
risk, with the exchange rate fixed for all significant
contracts.
The Group is exposed to interest rate risks on
large loans.
Interest rate risk on large loans is mitigated by the use of
interest rate swaps.
Potential Impact
Low - unchanged
FIC retail outlets accept foreign currency and are
exposed to fluctuations in the value of the dollar
and euro.
ANNUAL REPORT 2023 11
Chief Executive’s Strategic Review
RISK MANAGEMENT
INVENTORY
Risk
Inventory risk relates to losses on realising the carrying
value on ultimate sale. Losses include obsolescence,
shrinkage or changes in market demand such that
products are only saleable at prices that produce
a loss.
FIC is the only Group business that holds significant
inventories and faces this risk in the Falkland Islands,
where it is very expensive to return excess or obsolete
stock back to the UK.
PEOPLE
Risk
Loss of one or more key members of the senior
management team or failure to attract and retain
experienced and skilled people at all levels across the
business could have an adverse impact on
the business.
FIC has a reliance on being able to attract staff
from overseas including many from St Helena.
Development of those locations might reduce the pool
of available staff.
All Group companies are experiencing a shortage of
skilled employees as the businesses grow and recover
from the pandemic. In the UK, Momart has suffered
from shortages in drivers and art technicians
Comment
Reviews of old and slow-moving stock in Stanley
are regularly undertaken by senior management and
appropriate action taken.
Potential Impact
Moderate - unchanged
Comment
None of the Group’s businesses is reliant on the skills
of any one person. The wide spread of the Group’s
operations further dilutes the risk.
Potential Impact
Low - unchanged
The development of tourism on St Helena has been
slow and the Falkland Islands remain an attractive
location for St Helenian people to work.
Low - decreased
This has driven wages costs up.
Moderate - unchanged
The Covid-19 related risks have been summarised into a more general pandemic risk in the current financial year.
Statement by the Directors in Performance of their Statutory Duties in Accordance with s172(1)
Companies Act 2006
The statement by the directors in performance of their statutory duties in accordance with s172(1) Companies Act 2006 is
included in the Directors’ Report.
ANNUAL REPORT 2023 12
Chief Financial Officer’s Review
Financial Review
Earnings per Share
Restatements
As detailed in note 1 to the financial statements, comparative
numbers were restated to correct the accounting treatment
of some right of use assets, the carrying value of certain
investments in the Company and the application of
hedge accounting.
Revenue
Group revenue increased by £12.4 million (31%) to £52.7
million with double digit growth in all three divisions.
Operating Profit
Operating profit at £3.9 million was £1.1 million ahead of
prior year. Underlying operating profit increased by £0.9
million (30%) to £4.0 million (2022: £3.1 million).
Net Financing Income
Basic and Diluted Earnings per Share (“EPS”) derived
from reported profits was 24.9 pence (2022: 11.9 pence
- restated). Basic and Diluted EPS derived from underlying
profits was 20.1 pence (2022: 9.5 pence).
Balance Sheet
The Group’s balance sheet remained strong, with total
net assets growing to £44.0 million (2022: £40.8 million -
restated) and retained earnings increasing by £3.2 million to
£24.5 million (2022: £21.4 million - restated).
Net Debt
Year ended 31 March
2023
£m
2022
£m
Change
£m
Bank loans
(13.3)
(14.2)
Cash and cash equivalents
Net debt
Lease liabilities*
12.8
(0.5)
(6.4)
9.6
(4.6)
(6.5)
Net debt after lease liabilities
(6.9)
(11.1)
0.9
3.2
4.1
0.1
4.2
The Group’s net financing income of £0.1 million was £0.2
million ahead of the prior year net financing expense due
primarily to an increased movement in the fair value of the
derivative financial instrument.
* As detailed in note 1 to the financial statements, lease
liabilities have been restated, resulting in a reduction of £0.6
million at 31 March 2022.
Reported Pre-tax Profit
The reported pre-tax profit for the year ended 31 March
2023 was £4.0 million (2022: £2.7 million - restated). Non-
trading items in the current year included a favourable fair
value movement of £0.9 million on a derivative financial
instrument and £0.1 million of employee redundancy costs.
The Group’s underlying profit before tax before these non-
trading items was £3.2 million (2022: £2.3 million). Non-
trading items in the prior year included a favourable fair
value movement of £0.7 million on a derivative financial
instrument following a restatement of results as detailed
in note 1 to the financial statements and £0.3 million of
people related costs including employee redundancies and
compensation payable to the former Chief Executive.
Taxation
Tax on current year profits has decreased by £0.3 million.
This is mainly due to the prior year tax charge including a
£0.5 million increase in deferred tax relating to the change
in tax rates from 19% to 25% from 1 April 2023, which was
partly offset by an increase in profits (£0.2 million).
Bank loans reduced to £13.3 million (2022: £14.2 million)
as a result of scheduled loan repayments of £0.9 million.
The Group’s cash balances increased by £3.2 million to
£12.8 million (2022: £9.6 million) reflecting improved trading
and working capital position. Overall net debt improved by
£4.1 million to £0.5 million (2022: £4.6 million).
The Group’s outstanding lease liabilities totalled £6.4 million
(2022: £6.5 million - restated) with £4.6 million of the
balance (2022: £4.7 million) relating to the 50-year leases
from Gosport Borough Council for the Gosport Pontoon
and associated ground rent, which run until June 2061.
The carrying value of intangible assets increased to £4.4
million (2022 £4.2 million) with additional investment in the
retail system in FIC.
The net book value of property, plant and equipment
remained materially the same at £38.7 million (2022: £38.7
million - restated) with additions of £2.4 million being offset
by depreciation charges of £2.4 million.
At 31 March 2023, the Group had 85 (2022: 83) completed
investment properties, comprising commercial and
residential properties in the Falkland Islands, which are held
for rental. In addition, FIC held land in and around Stanley,
including areas zoned for industrial development and prime
mixed-use land. FIC also held undeveloped land outside
Stanley.
ANNUAL REPORT 2023
13
Chief Financial Officer’s Review
The net book value of the investment properties and
undeveloped land of £7.9 million (2022: £8.2 million) had a
fair value of £12.6 million (2022: £12.5 million).
Deferred tax assets relating to future pension liabilities stood
at £0.5 million (2022: £0.7 million). This balance relates to the
deferred tax benefit of expected future pension payments in
the FIC unfunded scheme calculated by applying the 26%
Falkland Islands’ tax rate to the pension liability.
Inventories, which largely represent stock held for resale
and raw materials increased by £0.2 million to £6.9 million
at 31 March 2023 (2022: £6.7 million). A 12% increase in
stock held for resale in FIC was partially offset by a decrease
in work in progress with less private house building activity.
Trade and other receivables increased by £2.3 million to
£10.2 million at 31 March 2023 (2022: £7.9 million) with
increased construction business in the Falkland Islands and
a high volume of exhibition sales activity in Momart.
Trade and other payables increased by £3.7 million to £13.7
million at 31 March 2022 (2022: £10.0 million) reflecting
increased trading activity as detailed above and an increase
in amounts received in advance of service delivery in FIC.
At 31 March 2023, the liability due in respect of the Group’s
only defined benefit pension scheme, in FIC, was £2.0
million (2022: £2.6 million). This pension scheme, which
was closed to new entrants in 1988 and to further accrual
in 2007, is unfunded and liabilities are met from operating
cash flow. A decrease in the liability largely arose as a
result of an increase in interest rates on relevant corporate
bonds and has been fed through reserves in accordance
with IAS 19. Eleven former employees receive a pension
from the scheme at 31 March 2023 and there are three
deferred members.
The Group’s deferred tax liabilities, excluding the pension
asset at 31 March 2023, were £4.2 million (2022: £3.8
million - restated) with the increase due largely to temporary
differences on property, plant and equipment.
Cash Flows
Net cash inflow from operating activities of £7.5 million was
£2.4 million more than the prior year. The increase was due
to a combination of a £0.8 million increase in underlying
EBITDA* and a £1.4 million improvement in working capital.
The Group’s operating cash flow can be summarised
as follows:
Year ended 31 March
Underlying profit before tax
Depreciation & amortisation
Gain on disposal of fixed asset
Net interest payable
Underlying EBITDA*
Non-trading, cash items
Decrease / (Increase) in finance
lease receivables
Decrease / (increase) in working
capital
2023
£m
3.2
2.6
(0.3)
0.8
6.3
(0.1)
2022
£m
Change
£m
2.3
2.4
-
0.8
5.5
-
0.9
0.2
(0.3)
-
0.8
(0.1)
0.2
(0.1)
0.3
1.4
-
1.4
Tax paid and other
(0.3)
(0.3)
-
Net cash inflow from operating
activities
Financing and investing activities
Capital expenditure
Disposal of fixed assets
Net bank and lease liabilities interest
paid
Bank and lease liability repayments
Dividends paid
Net cash outflow from financing
and investing activities
Net cash inflow / (outflow)
Cash balance b/fwd.
Cash balance c/fwd.
7.5
5.1
2.4
(2.0)
0.4
(2.7)
0.1
(0.8)
(0.8)
(1.5)
(0.4)
(6.6)
(0.1)
(4.3)
(10.1)
3.2
9.6
12.8
(5.0)
14.6
9.6
0.7
0.3
-
5.1
(0.3)
5.8
8.2
(5.0)
3.2
*EBITDA is defined as earnings before interest and tax after
adding being depreciation and amortisation costs
Financing and Investing Activities
During the year, the Group invested £2.0 million of capital
expenditure, comprising £1.9 million of fixed asset property,
plant and equipment and £0.1 million of computer software.
The bank and lease repayments of £6.6 million in the prior
year included £5.0 million CBILS loans repaid in June 2021.
The Strategic Report comprises the Chief Executive’s
Strategic Review and the Chief Financial Officer’s Review.
Approved by the Board of Directors and signed on behalf
of the Board.
Stuart Munro
Chief Executive
4 August 2023
ANNUAL REPORT 2023 14
Board of Directors and Secretary
Robin Williams, Non-executive Chairman
Robin joined the Board in September 2017. He has a wide breadth of corporate experience, gained at a range of quoted
and private businesses as well as from an early career in investment banking. He is currently Chairman at Keystone
Law Group plc and at Churchill China plc, and is also a non-executive director at Headlam plc and the Manufacturing
Technology Centre Limited. Robin qualified as an accountant in 1982 after graduating in engineering science from the
University of Oxford. He worked in corporate finance for ten years before leaving the City in 1992 to co-found the packaging
business, Britton Group plc. In 1998, he moved to Hepworth plc, the building materials group, and since 2004 he has
focused on non-executive work in public, private and private equity backed businesses. His financial background provides
the experience required as Chairman of the Group to review and challenge decisions and opportunities. Robin is a member
of the Audit and Remuneration Committees and is Chairman of the Nominations Committee.
Stuart Munro, Chief Executive
Stuart joined the Board on 28 April 2021 as Chief Financial Officer before taking over as Chief Executive on 14 April
2022. He qualified as a chartered accountant with Ernst & Young and worked as a divisional finance director in number
of UK companies including Balfour Beatty, Alfred McAlpine Infrastructure Services and FirstGroup as well as Transport for
London. From 2015 until joining FIH group, Stuart provided strategic, financial and operational consultancy to a number of
medium sized Private Equity backed services companies across a variety of sectors.
Reuben Shamu, Chief Finance Officer
Reuben joined the Board on 12 September 2022 as Chief Financial Officer. He qualified as a chartered accountant with
KPMG and worked in professional practice for 12 years before moving into industry in 2008. For the last 4 years he has
been Commercial Director for the UK operations of privately-owned CP Holdings Group, which has interests in hotels and
leisure, commercial office real estate, engineering and construction. His previous roles include Finance Director at Sturrock
and Robson Group, Financial Planning and Analysis Director at Smiths Detection Group and Group Financial Controller at
Veolia Water UK.
Robert Johnston, Non-executive Director
Robert joined the Board on 13 June 2017. He is an experienced non-executive director and investment professional
and has served on the boards of several quoted companies in both North America and in UK, including Fyffes PLC and
Supremex Inc. Robert has been the Chief Strategy Officer and Executive Vice President at The InterTech Group, Inc. and
has over 20 years of experience in various financial and strategic roles. He is the principal representative of the Jerry Zucker
Revocable Trust. Robert brings experience on many transactions at both the corporate and asset level, including debt
and equity, and his experience in the banking sector will prove invaluable to developing the Group. Robert represents the
Company’s largest shareholder, “The Article 6 Marital Trust, created under the First Amended and Restated Jerry Zucker
Revocable Trust dated 4-2-07”, which has a beneficial holding of 3,596,553 ordinary Shares, representing 28.7% of the
Company’s issued share capital.
He is currently on the boards of Colabor Group Inc, Supremex Inc. (where he is Chairman), Swiss Water Decaffeinated
Coffee Inc and RGC Resources Inc. Robert is a member of the Nominations and Audit Committees and is Chairman of the
Remuneration Committee.
ANNUAL REPORT 2023 15
Board of Directors and Secretary
CONTINUED
Dominic Lavelle, Non-executive Director
Dominic joined the Board on 1 December 2019. He brings to FIH a wide breadth of corporate experience. Most recently,
Dominic was Chief Financial Officer of SDL plc from 2013 to 2018. He has over 15 years’ experience as a UK plc Main
Board Director and has been Finance Director/Chief Financial Officer of seven UK publicly traded companies including
Mothercare plc, Alfred McAlpine plc, Allders plc and Oasis plc. His experience, in both permanent roles and turnaround and
restructuring projects across several business sectors is a great benefit to the Group, particularly with the various business
streams operated by FIC.
After graduating in Civil and Structural Engineering from the University of Sheffield in 1984, Dominic trained with Arthur
Andersen and qualified as a chartered accountant in 1989. He is currently senior independent non-executive director and
Chair of the Audit Committee of the AIM quoted Fulcrum Utility Services Limited and a director of Steenbok Newco 10
SARL, a wholly owned subsidiary of the Steinhoff Group. Dominic is a member of the Nominations and Remuneration
Committees and is Chair of the Audit Committee.
Holger Schröder, Non-executive Director
Holger joined the Board on 1 June 2023. He has over 28 years’ experience gained in a variety of predominantly Swiss
companies, most recently as the CFO and a board member of Janser Group, a family-owned real estate and investment
business based in Switzerland, where he has been for the last six years. Janser Group controls 12.6% of the ordinary share
capital of FIH (which comprises 1,451,998 shares in FIH held by Janser Group and a further 125,327 held personally by
Martin Janser). Holger is a member of the Audit, Nominations and Remuneration Committees.
Company Secretary
AMBA Secretaries Limited
400 Thames Valley Park Drive
Reading
Berkshire
RG6 1PT
ANNUAL REPORT 2023 16
Corporate Governance Statement
Dear Shareholder,
As Chairman of the Company, I am responsible for leading the Board in applying good corporate governance and the Board
is committed to appropriate governance across the business, both at an executive level and throughout its operations.
The Board strives to ensure that the objectives of the business, the principles and risks are underpinned by values of good
governance throughout the organisation.
The FIH group plc Board values include embedding a culture of ethics and integrity, and the adoption of higher governance
standards, to maintain its reputation by fostering good relationships with employees, shareholders and other stakeholders
to deliver long term business success.
In 2018 the AIM Rules for Companies were updated to acknowledge a change in investor expectations toward corporate
governance for companies admitted to trading on AIM, and the Board, took the decision to adopt the revised Quoted
Companies Alliance Corporate Governance Code 2018 (the “QCA Code”) which they believe is the most appropriate
recognised governance code for the Company.
The QCA Code has ten principles of corporate governance that the Company has complied with as set out on the
Company’s website in the Corporate Governance section.
The Board is aware of the need to protect the interests of minority shareholders, and balancing those interests with those
of any more substantial shareholders, including those interests of the Jerry Zucker Revocable Trust, a major shareholder
holding circa 29% of the issued share capital and voting rights, which are represented on the Board by the non-executive
director, Robert Johnston.
Beyond the Annual General Meeting, the Chief Executive and the Chief Financial Officer offer to meet with all significant
shareholders after the release of the half year and full year results and the Chairman is available throughout the year. The
Chief Executive, Chief Financial Officer and the Chairman are the primary points of contact for the shareholders and are
available to answer queries over the phone or via email from shareholders throughout the year.
Business Model and Strategy
The Group’s strategy is to continue to develop the potential of its existing companies: to fill storage capacity and make
further progress at Momart, to maintain the strong cash flow from PHFC and to invest in FIC to take full advantage of the
longer-term growth opportunities in the Falkland Islands. While doing this, management are also alert to the benefits of a
well-judged complementary acquisition that would give increased scale and growth potential for the Group and enhance
the liquidity of FIH shares.
Risk Management
The Board has overall responsibility for the systems of risk management and internal control and for reviewing their
effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable but not
absolute assurance against material misstatement or loss. The key risks of the Group are presented in the Chief Executive’s
Strategic Report.
The Board has determined that an internal audit function is not justified due to the small size of the Group and its
administrative function and the high level of director review and authorisation of transactions.
A Directors’ and Officers’ Liability Insurance policy is maintained for all directors and each director has the benefit of a Deed
of Indemnity.
Director Independence
The Board considers itself sufficiently independent. The QCA Code suggests that a board should have at least two
independent non-executive directors. The Board has considered each non-executive director’s length of service and
interests in the share capital of the Group and considers that Mr Williams, Mr Schröder, Mr Johnston and Mr Lavelle are
independent of the executive management and free from any undue extraneous influences which might otherwise affect
their judgement. All Board members are fully aware of their fiduciary duty under company law and consequently seek at all
times to act in the best interests of the Company as a whole.
ANNUAL REPORT 2023 17
Corporate Governance Statement
CONTINUED
Whilst the Company is guided by the provisions of the QCA Code in respect of the independence of directors, it gives
regard to the overall effectiveness and independence of the contribution made by directors to the Board in considering their
independence, and does not consider a director’s period of service in isolation to determine this independence.
The Board acknowledges that Robert Johnston, who joined the Board on 13 June 2017, represents the Company’s largest
shareholder, “The Article 6 Marital Trust, created under the First Amended and Restated Jerry Zucker Revocable Trust
dated 4-2-07”, (the “Zucker Trust”), which has a beneficial holding of 3,596,553 ordinary Shares, representing circa 29%
of the Company’s issued share capital. The Board has considered Mr Johnston’s independence, given his representation
of this shareholding and all Board members have satisfied themselves that they consider Mr Johnston to be independent.
This is as a consequence of (i) the fact that Mr Johnston has considerable international investment expertise, and (ii) that
the shareholding of his employer in FIH represents only a small part of its wider portfolio, but nonetheless aligns him with
the interests of FIH shareholders generally.
The Board also acknowledges that Holger Schröder, who joined the Board on 1 June 2023, represents one of the Company’s
major shareholders, the Janser Group which controls 12.6% of the Company’s equity. The Board has considered Mr
Schröder’s independence, given his representation of this shareholding and all Board members have satisfied themselves
that they consider Mr Schröder to be independent. This is as a consequence of (i) Mr Schröder being employed by the
operational side of the Janser Group and (ii) Janser Group having a division involved in the investor-side decision making
process which is separate from its operational activities, where Mr Schröder is employed.
All directors retire by rotation and are subject to election by shareholders at least once every three years. Any non-executive
directors who have served on the Board for at least nine years are subject to annual re-election.
Time Commitment of Directors
Stuart Munro, Chief Executive of the company and Reuben Shamu, Chief Financial Officer are the only executive directors.
Robin Williams, Robert Johnston, Dominic Lavelle and Holger Schröder have all been appointed on service contracts for
an initial term of three years. Overall, it is anticipated that non-executive directors spend 10-15 days a year on the Group’s
business after the initial induction, which includes a trip to the Group’s subsidiary in the Falkland Islands. However, the non-
executive directors and the Chairman in particular, spend significantly more time than this on the business of the Group.
All directors are expected to attend all Board meetings, the Annual General Meeting and any extraordinary general meetings.
Non-executive directors are expected to devote additional time in respect of any ad hoc matters, such as significant
investment opportunities, responding to market changes, consideration of any business acquisitions, and any significant
recruitment or corporate governance changes.
Skills and Qualities of Each Director
The Board recognised the importance of having directors with a diverse range of skills, experience and attributes, which we
have across our current Board. Each Board member contributes a different skill set based on their own experience, which
is discussed in detail in the “Board of Directors and Secretary”.
Board Meetings
The Board meets frequently throughout the year to consider strategy, corporate governance matters, and performance.
Prior to each meeting, all directors receive appropriate and timely information. Since the last annual report was published
on 5 July 2022 there have been six Board meetings. Robin Williams, Stuart Munro, Reuben Shamu, Robert Johnston and
Dominic Lavelle have attended all meetings. Jeremy Brade ceased to be a director prior to the six meetings and Holger
Schröder attended every meeting after his appointment.
The Remuneration committee has met once since 5 July 2022 to review executive base pay and bonus structure and
all members of the committee were in attendance. There have also been two Audit Committee meetings since 5 July
2022, which were attended by all members of the committee. The Nominations Committee meets on an ad hoc basis to
consider Board composition and succession and met a number of times during the year to consider the replacement of
the Chairman who is stepping down and appointment of a non-executive director.
ANNUAL REPORT 2023 18
Board Directors
The Board comprises Robin Williams, the non-executive Chairman, Stuart Munro, the full time Chief Executive, Reuben
Shamu, the full time Chief Financial Officer and three other non-executive directors, Robert Johnston, Dominic Lavelle and
Holger Schröder.
Details of How Each Director Keeps Their Skill Set Up to Date
The Board as a whole is kept abreast by the Company’s lawyers with developments of governance, and by WH Ireland, the
Company’s Nominated Adviser, of updates to AIM regulations. The Group’s auditors, Grant Thornton, meet with the Board
as a whole twice a year and keep the Board updated with any regulatory changes in finance and accounting.
Any External Advice Sought by the Board
RSM Tenon, the Group’s tax advisors ensure compliance with taxation law and transfer pricing and the Company’s lawyers
advised on a number of areas.
Internal Advisory Responsibilities
The Chief Executive and the Chief Financial Officer help keep the Board up to date on areas of new governance and liaise
with the Nominated Adviser on areas of AIM requirements, and with the Company’s lawyers on areas such as Modern
Slavery, Data Protection and other legal matters. They also liaise with the Company’s tax advisers with regards to tax
matters and with the Group’s auditors with respect to the application of current and new accounting standards, and on the
status on compliance generally around the Group. The Chief Executive has frequent communication with the Chairman and
is available to other members of the Board as and when required.
Board Performance Evaluation
In view of the change in Chairman at the forthcoming AGM, no review of the effectiveness of the Board was carried
out in the period. It is intended that one will be carried out in the first twelve months of the tenure of the new Chairman
once appointed.
Robin Williams
Chairman
4 August 2023
ANNUAL REPORT 2023 19
Audit Committee Report
The Audit Committee comprises the four non-executive directors: Robert Johnston, Dominic Lavelle, Holger Schröder
and Robin Williams, and is chaired by Dominic Lavelle. The Audit Committee reviews the external audit activities, monitors
compliance with statutory requirements for financial reporting and reviews the half year and annual financial statements
before they are presented to the Board for approval. The Audit Committee also keeps under review the scope and results
of the audit and its cost effectiveness and the independence and objectivity of the Auditor and the effectiveness of the
Group’s internal control systems.
The Committee meets twice a year to review both the year end and half year results and the Company’s auditors attend
both of these meetings in person. It is the Audit Committee’s role to provide formal and transparent arrangements, to
consider how to apply financial reporting under IFRS, the Companies Act 2006, and the requirements of the QCA Code
and also to maintain an appropriate relationship with the independent auditor of the Group.
The current terms of reference of the Audit Committee were reviewed and updated in June 2023.
Effectiveness of the External Audit Process
The Audit Committee is committed to ensuring that the external audit process remains effective on a continuing basis as
set out below:
• Reviewing the independence of the incumbent auditor;
• Considering if the audit engagement planning, including the team quality and numbers is sufficient and appropriate;
•
•
•
Ensuring that the quality and transparency of communications with the external auditors are timely, clear, concise and
relevant and that any suggestions for improvements or changes are constructive;
Exercising professional scepticism, including but not limited to, looking at contrary evidence, the reliability of evidence,
the appropriateness and accuracy of management responses to queries, considering potential fraud and the need for
additional procedures and the willingness of the auditor to challenge management assumptions; and
Feedback is provided by the external auditor twice a year to the Audit Committee, after the full year audit and half
year review, with one-to-one discussions held beforehand between the Chair of the Audit Committee and the audit
firm partner.
External Auditor
The external audit service was put out to tender during the year and Grant Thornton UK LLP was appointed as the
Company’s external auditor during the year. It is therefore the audit engagement partner’s first year on the assignment.
The analysis of the auditor’s remuneration is shown in note 6. Tax advisory services are provided by RSM UK Tax and
Accounting Limited.
Non-audit Services Provided by the External Auditor
The Audit Committee keeps the appointment of external auditors to perform non-audit services for the Group under
continual review, receiving a report at each Audit Committee meeting. In the year ended 31 March 2023, there were no
non-audit fees paid to either the outgoing auditors KPMG LLP or incoming auditors Grant Thornton UK LLP (2022: £nil).
Emerging Risks
The risk management approach is subject to continuous review and updates in order to reflect new and developing issues
which might impact business strategy. Emerging or topical risks are examined to understand their significance to the
business. Risks are identified and monitored through risk registers at the Group level and discussed at each Board meeting
to consider new threats.
ANNUAL REPORT 2023 20
Areas of Judgement and Estimation
In making its recommendation that the financial statements be approved by the Board, the Audit Committee has taken
account of the following significant issues and judgements involving estimation:
Long term construction contracts
Significant estimation is involved in determining the revenue and profit to be recognised on long term contracts. This
includes determining percentage completion at the balance sheet date by estimating the total expected costs to complete
each contract along with their future profitability. These estimates directly influence the revenue and profit that can be
recognised on such contracts.
Inventory Provisions
An inventory provision is booked when the realisable value from sale of the inventory is estimated to be lower than the
inventory carrying value, or where the stock is slow-moving, obsolete or damaged, and is therefore unlikely to be sold. The
quantification of the inventory provision requires the use of estimates and judgements and if actual future demand were to
be lower or higher than estimated, the potential amendments to the provisions could have a material effect on the results
of the Group.
Defined Benefit Pension Liabilities
A significant degree of estimation is involved in predicting the ultimate benefit payments to pensioners in the FIC defined
benefit pension scheme. Actuarial assumptions have been used to value the defined benefit pension liability (see note 23).
Management have selected these assumptions from a range of possible options following consultations with independent
actuarial advisers. The actuarial valuation includes estimates about discount rates and mortality rates, and the long-term
nature of these plans, make the estimates subject to significant uncertainties.
There are eleven pensioners currently receiving a monthly pension under the scheme and three deferred members.
Dominic Lavelle
Independent Non-executive Director
4 August 2023
ANNUAL REPORT 2023 21
Directors’ Report
The directors present their annual report and the financial statements for the Company and for the Group for the year
ended 31 March 2023.
Results and Dividend
As set out in the Consolidated Income Statement, the Group profit for the year after taxation amounted to £3,122,000
(2022: £1,485,000). Basic earnings per share were 24.9 pence (2022: 11.9 pence).
With the Group’s increase in profitability, the Board is pleased to announce that a final dividend of 5.3 pence per share will
be recommended for approval at the Annual General Meeting. Together with the interim dividend of 1.2 pence paid on 31
January 2023, the proposed dividend will take the total dividend for the year ended 31 March 2023 to 6.5 pence per share
(2022: 3.0 pence).
Principal Activities
The business of the Group during the year ended 31 March 2023 was general trading in the Falkland Islands, the operation
of a passenger ferry across Portsmouth Harbour and the provision of international arts logistics and storage services.
The principal activities of the Group are discussed in more detail in the Chief Executive’s Strategic Report and should
be considered as part of the Directors’ Report for the purposes of the requirements of the enhanced Directors’ Report
guidance.
The principal activity of the Company is that of a holding company.
Qualifying Indemnity Provisions
Qualifying indemnity provisions are detailed in the Corporate Governance Statement on page 16.
Future Developments
Details of future developments are presented within the Strategic Report on pages 3 to 11.
Directors
Reuben Shamu was appointed as a director on 12 September 2022 and Holger Schröder was appointed as a director on
1 June 2023.
Directors’ Interests
The interests of the directors in the issued shares and share options over the shares of the Company are set out below
under the heading “Directors’ interests in shares”. During the year, no director had an interest in any significant contract
relating to the business of the Company or its subsidiaries, other than their own service contract.
Health and Safety
The Group is committed to the health, safety and welfare of its employees and third parties who may be affected by the
Group’s operations. The focus of the Group’s effort is to prevent accidents and incidents occurring by identifying risks and
employing appropriate control strategies. This is supplemented by a policy of investigating and recording all incidents.
Employees
The Board is aware of the importance of good relationships and communication with employees. Where appropriate,
employees are consulted about matters which affect the progress of the Group and which are of interest and concern to them as
employees. Within this framework, emphasis is placed on developing greater awareness of the financial and economic factors
which affect the performance of the Group. Employment policy and practices in the Group are based on non-discrimination
and equal opportunity irrespective of age, race, religion, sex, gender identity, sexual orientation, colour and marital status.
ANNUAL REPORT 2023 22
In particular, the Group recognises its responsibilities towards disabled persons and does not discriminate against
them in terms of job offers, training or career development and prospects. If an existing employee were to become
disabled during the course of employment, every practical effort would be made to retain the employee’s services
with whatever retraining is appropriate. The Group’s pension arrangements for employees are summarised in
note 23.
Payments to suppliers
The policy of the Company and each of its trading subsidiaries, in relation to all its suppliers, is to settle the terms of
payment when agreeing the terms of the transaction and to abide by those terms, provided that it is satisfied that the
supplier has provided the goods or services in accordance with agreed terms and conditions. The Group does not follow
any code or standard payment practice. As a holding company, the Company had £6,000 of trade creditors at 31 March
2023 (2022: £29,000).
Share Capital and Substantial Interests in Shares
During the year no shares were issued. Further information about the Company’s share capital is given in note 25. Details
of the Company’s executive share option scheme can be found in note 24.
The Company has been notified of the following interests in 3% or more of the issued ordinary shares of the Company as
at 4 August 2023:
The Article 6 Marital Trust created under the
First Amended and Restated Jerry Zucker
Revocable Trust dated 2 April 2007
Janser Group
Quaero Capital Funds (Lux) – Argonaut
J.F.C. Watts
Christian Struck
Charitable and Political Donations
Number of shares
Percentage of shares in issue
3,596,553
1,577,325
1,057,158
797,214
380,000
28.73
12.61
8.44
6.37
3.04
Charitable donations made by the Group during the year amounted to £15,802 (2022: £16,214), these were largely paid to
local community charities in the Falkland Islands. There were no political donations in the year (2022: nil).
Disclosure of Information to the External Auditor
The directors who held office at the date of this Directors’ Report confirm that, so far as they are each aware, there is no
relevant audit information of which the Company’s external auditor is unaware; and each director has taken all the steps
that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish
that the Company’s external auditor is aware of that information.
External Auditor
A resolution to approve the appointment of Grant Thornton UK LLP will be put to shareholders at the Annual
General Meeting.
ANNUAL REPORT 2023 23
Directors’ Report
CONTINUED
Greenhouse Gas Emissions
The 2018 Regulations introduced requirements under Part 15 of the Companies Act 2006 for large unquoted companies to
disclose their annual energy use and greenhouse gas emissions, and related information. However, the Group has applied
the option permitted to exclude any energy and carbon information relating to its subsidiary which the subsidiary would
not itself be obliged to include if reporting on its own account. This applies to all subsidiaries within the Group. FIH group
plc itself consumes less than 40MWh and, as a low energy user, is not required to make the detailed disclosures of energy
and carbon information but is required to state, in its relevant report, that its energy and carbon information is not disclosed
for that reason. FIH group plc’s annual energy use and greenhouse gas emissions, and related information has not been
disclosed in this annual report as it is a low energy user.
Statement by the Directors in Performance of their Statutory Duties in Accordance with
s172(1) Companies Act 2006
As an experienced Board, our intention is to behave responsibly and we consider that we, both as individuals and as a
collective Board, as representatives of FIH group plc and the Group as a whole, during the year ended 31 March 2023, have
acted in good faith, to promote the success of the Company for the benefit of its members as a whole, having regard to
the wider stakeholders as set out in s172 of the Companies Act. In the Falkland Islands and in Gosport/Portsmouth (where
PHFC provide the ferry service), the subsidiaries of the Group work closely with local government and local communities
and Momart, is an active and founding member of several art communities and its employees give talks at conferences,
sharing their experiences on the import and export of art work.
Stakeholder Engagement
The directors engage with the Group’s stakeholders on material issues relating to their business, taking into consideration
current and future events and principal decisions. The engagement supports the directors to understand the impact of their
decisions and identify any material issues. This aligns with the Group’s purpose and strategy. The details of the Group’s
interaction with its wider stakeholders is as follows:
Customers:
FIC demonstrates its customer focus through surveys and regular meetings with key customers to understand their
requirements and to build long-term relationships. During the financial year ended 31 March 2023, Board members met
with the Governor of the Falkland Islands and Chief Executive of FIG. They also met with the MoD.
PHFC maintains close contact with its customer base via social media and regularly tweets and posts information on
Facebook about local pantomimes, football matches, and local events of interest to the local community and visiting
tourists. PHFC also maintains close links to the Navy based in Portsmouth.
Momart engage with industry working groups to propose and implement sustainability improvements in delivering fine art
logistics services.
Colleagues:
We have an experienced, diverse and dedicated workforce which we recognise as a key asset of our businesses. Therefore,
it is important that we continue to create the right environment to encourage and create opportunities for individuals and
teams to realise their full potential.
We have an open, collaborative and inclusive management structure and engage regularly with our employees. We do this
through an appraisal process, structured career conversations, employee surveys, company presentations and away days.
ANNUAL REPORT 2023
24
Suppliers:
Across the Group, we aim to build long-term relationships with our suppliers that help ensure the continued delivery of the
high-quality services the Group provides. We are clear about our payment practices. We expect our suppliers to adopt
similar practices throughout their supply chains to ensure fair and prompt treatment of all creditors. All suppliers are vetted
to ensure compliance with the Group’s zero tolerance approach to modern slavery.
Communities:
We are committed to supporting the communities in which we operate, including local businesses, residents and the
wider public.
We engage with the local communities in Gosport/Portsmouth and in the Falkland Islands through our community
donations, and providing employment and work experience opportunities. Apprentices have been taken on at both Momart
and PHFC, in areas including Customs and Excise and Engineering.
PHFC also work closely with local government to ensure representation in local transport developments.
Environment:
The Group is committed to doing its part to protect the local and global environment, minimising the environmental impacts
of its activities, products and services, and to the continual improvement of its environmental performance.
Steps already taken include:
FIC
• Use of ground heat source systems on new housing developments and fitting solar panels.
•
Elimination of plastic bags from all retail outlets and use of paper cups, straws, and other recyclable packaging in
the FIC cafes wherever possible.
LED lighting in offices, warehouses and retail outlets.
•
• Utilisation of best practice insulation methods for building construction and renovation.
Momart
LED lighting and movement sensors across all warehouse units.
• Member of the Gallery Climate Coalition, an industry wide body working on all impacts across the industry.
• Conversion of vehicles to meet the Euro 6 emissions standard.
•
• Renewable energy from solar panels installed at the Leyton warehouse unit 14.
• Sourcing of materials for packing cases from sustainable sources wherever possible.
• Wood waste repurposed or burnt for energy rather than going to landfill.
Installation of new exhaust cleaners on the vessels reducing NOx and Co2 emissions.
PHFC
•
• Smart LED lighting across the estate.
• Provision of coffee cup recycling.
•
Investigation of smart apps to promote environmentally friendly journey planning.
ANNUAL REPORT 2023 25
Directors’ Report
CONTINUED
Governments and Regulatory Authorities
Our work brings us into regular contact with the MOD, FIG and local authorities, as we deliver construction projects, repairs
and other work. We strive to be proactive and transparent, consulting with them to ensure that our planning reflects local
sensitivities.
PHFC staff attend meetings with local government members and Gosport Borough Council.
The Momart Business Process and Compliance Manager attends industry forums, such as Logistics UK, discussing
developments in the industry with the forum and any attending HMRC officers. The Momart Security Manager liaises with
the Civil Aviation Authority to ensure that Momart’s security procedures and staff training remain compliant.
Media
All businesses are active on social media, using Twitter, Instagram, LinkedIn and Facebook.
Non-governmental Organisations:
PHFC is a Heritage Committee member.
Momart representatives attend the UK Registrars’ Group conference and the European Registrars’ Group conference
and speak on issues such as customs procedures, Brexit, or specialised Export licences, such as the “Convention
on International Trade in Endangered Species of Wild Fauna and Flora”, which requires permits for the export of ivory,
rosewood and mahogany.
With over 40 years of experience and expertise in handling, transportation and storage of art, Momart has held a Royal
Warrant for work with the Royal Collection since 1993.
Momart is a founding member of ARTIM, “the Art Transporter International Meeting” and attends the annual conference to
discuss the best practices and the key business issues concerning the packing, transportation and movement of works
of art.
Momart is also a member of the UK Registrars’ Group, which is a non-profit association providing a forum for the exchange
of ideas and expertise between registrars, collection managers and other museum professionals in the United Kingdom,
Europe and worldwide.
Shareowners and Analysts:
Beyond the Annual General Meeting, the Chief Executive, Chief Financial Officer and the Chairman offer to meet with all
significant shareholders after the release of the half year and full year results. The Chief Executive, Chief Financial Officer
and the Chairman are the primary points of contact for the shareholders and are available to answer queries over the phone
or via email from shareholders throughout the year.
The Annual General Meeting provides a chance for investors and analysts to meet the Board face-to-face.
Debt Providers:
The Group has several debt facilities provided by HSBC, who are kept fully informed on all relevant areas of the business,
through regular meetings and presentations. The relationship with HSBC dates back to the Company’s incorporation in
1997.
ANNUAL REPORT 2023
26
Annual General Meeting
The Company’s Annual General Meeting will be held on 28 September 2023. The notice of the Annual General Meeting
and a description of the special business to be put to the meeting are considered in a separate circular to Shareholders.
Details of Directors’ Remuneration and Emoluments
The remuneration of non-executive directors consists only of annual fees for their services, both as members of the Board,
and of Committees on which they serve.
An analysis of the remuneration and taxable benefits in kind (excluding share options) provided for and received by each
director during the year to 31 March 2023 and in the preceding year is as follows:
Salary / Fees
£’000
Health
insurance £’000
Pension
Contributions
£’000
Bonus
£’000
2023 Total
£’000
2022 Total
£’000
John Foster*
Stuart Munro
Reuben Shamu**
Robin Williams
Jeremy Brade***
Robert Johnston
Dominic Lavelle
Holger Schröder****
Total
8
258
89
60
14
30
30
-
489
Resigned 14 April 2022
*
** Appointed 12 September 2022
*** Resigned 20 September 2022
**** Appointed 1 June 2023
-
1
1
-
-
-
-
-
2
-
-
9
-
-
-
-
-
9
-
100
17
-
-
-
-
-
8
359
116
60
14
30
30
-
522
271
-
60
30
30
30
-
117
617
943
The Chief Executive, Stuart Munro, participates in an annual performance related bonus arrangement, with the potential
during the year to earn up to 60% of his salary. The Chief Finance Officer, Reuben Shamu, participates in an annual
performance related bonus arrangement, with the potential during the year to earn up to 30% of his salary. The bonuses
are subject to the achievement of specified corporate and personal objectives and are payable in cash.
ANNUAL REPORT 2023
27
Directors’ Report
CONTINUED
Directors’ Interests in Shares
Full details of historic awards of deferred shares to John Foster are provided in note 24 Employee benefits: share based
payments. During the year ended 31 March 2023, no options were exercised by him and the remaining 3,591 nil cost share
options have an expiry date of 17 June 2023.
At 31 March 2023, Stuart Munro had 55,814 LTIP share options with an exercise price of 10 pence, a 3-year vesting period
and an expiry date of 3 December 2026. No other directors have any share options.
The exercise of LTIP awards is subject to achieving share price performance and earnings targets which have been
determined by the remuneration committee, after discussion with the Company’s advisers. No LTIP share options were
granted during the year.
In addition to the share options set out above, the interests of the directors, their immediate families and related trusts in
the shares of the Company according to the register kept pursuant to the Companies Act 2006 were as shown below:
In addition to the share options set out above, the interests of the directors, their immediate families and related trusts in
Ordinary shares as at 31 March 2022
the shares of the Company according to the register kept pursuant to the Companies Act 2006 were as shown below:
5,625
Ordinary shares as at 31 March 2023
Robin Williams
5,625
Stuart Munro
John Foster
Jeremy Brade
Robert Johnston*
Dominic Lavelle
4,400
118,542
15,022
*3,656,553
2,000
4,400
118,542
15,022
*3,654,053
2,000
* Robert Johnston holds 60,000 shares in his own name, and as he is also the representative of the Company’s largest
shareholder, “The Article 6 Marital Trust, created under the First Amended and Restated Jerry Zucker Revocable Trust
dated 4-2-07”, which holds 3,596,553 Shares, Robert Johnston is interested in 3,656,553 Shares in total, representing
29.2 percent of the Company’s 12,519,900 total voting rights.
Additional information and disclosures required in this Directors’ Report by the Companies Act 2006 and AIM rules and
regulations can be located as follows:
Location
Note 26 of the financial statements
Chief Executive’s Strategic Review
Disclosure
Financial risk management
Matters of Strategic importance
Approved by the Board and signed on its behalf by:
AMBA Secretaries Limited
4 August 2023
Kenburgh Court
133-137 South Street
Bishop’s Stortford
Hertfordshire
CM23 3HX
ANNUAL REPORT 2023 28
Statement of Directors’ Responsibilities in Respect of the Annual Report and the
Financial Statements
The directors are responsible for preparing the Annual Report, Strategic Report, Directors’ Report, and the Group and
Company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company financial statements for each financial year.
Under the AIM Rules of the London Stock Exchange, they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards and applicable law and they have elected to prepare the
parent Company financial statements on the same basis.
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 Group and parent Company and of the Group’s profit or loss for that period. In
preparing each of the Group and parent Company financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant and reliable;
•
•
state whether they have been prepared in accordance with UK-adopted international accounting standards;
assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or
to cease operations, or have no realistic alternative but to do so.
•
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company
and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible
for such internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report and a Directors’
Report that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
ANNUAL REPORT 2023
29
Directors’ Report
CONTINUED
Momart installation for a private client
FIC delivering on 70 House contract with FIG & MOD
ANNUAL REPORT 2023 30
Independent auditor’s report to the members of FIH Group Plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of FIH Group Plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 March 2023, which comprise the Consolidated Income Statement,
Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance
Sheet, Consolidated Cash Flow Statement, Company Cash Flow Statement, Consolidated Statement
of Changes in Shareholders’ Equity, Company Statement of Changes in Shareholders’ Equity and
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 UK-adopted
international accounting standards and, as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 March 2023 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards
the parent company financial statements have been properly prepared in accordance with UK-
adopted international accounting standards and as applied in accordance with the provisions of
the Companies Act 2006; and
the financial statements 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 ‘Auditor’s responsibilities for the audit of the financial
statements’ section of our report. We are independent of the group and the parent 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 as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the group’s and the parent company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence
obtained up to the date of our report. However, future events or conditions may cause the group or the parent company to
cease to continue as a going concern.
Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to continue to adopt the going
concern basis of accounting included:
•
•
•
•
developing an understanding of the design and implementation of controls around the assessment of going concern;
discussions with management of their assessment of the Group’s ability to continue as going concern;
assessing the reasonableness of projected cashflow and working capital assumptions and evaluating the revenue
and cost projections underlying the cashflow model;
assessing the accuracy of management’s historical forecasting by comparing management’s forecasts for the years
ended 31 March 2023 and 31 March 2022 to the actual results for those periods and considering the impact on the
base-case cashflow forecast;
1
ANNUAL REPORT 2023
31
•
•
•
•
assessing how these cash flow forecasts were compiled, determining whether covenant compliance has been
appropriately mapped into the model, assessing their appropriateness by applying relevant sensitivities to the
underlying assumptions, and challenging those assumptions including revenue growth assumptions;
obtaining the financing agreements and confirming the facilities and covenants relevant for the going concern period,
as well obtained evidence that the group has complied with the covenants as of the reporting date and throughout the
period;
evaluating management’s reverse stress test to identify the scenario which would result in the removal of the cash
headroom during the assessment period and assessing the probability of such a scenario; and
assessing the adequacy of related disclosures within the annual report.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the group’s and the parent
company’s business model including effects arising from macro-economic uncertainties such as global inflationary pressures,
we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed
how those risks might affect the group’s and the parent company’s financial resources or ability to continue operations over
the going concern period.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s and the parent company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £200,000, which equates after rounding to approximately
4.9% of profit before tax and approximately 0.4% of group
revenues.
Parent company: £530,000, which represents 1% of the parent
company’s total assets. For the purpose of group testing this has
been capped at £140,000, 70% of Group materiality (0.2% of total
assets).
Materiality
Key audit
matters
Key audit matters was identified as:
•
The revenue cycle contains fraudulent transactions – 70
house contract.
Scoping
• Recoverability of parent company’s investment in
subsidiaries (parent company only)
We performed an audit of the financial information of the
component using component materiality (full-scope audit) for FIH
Group Plc, The Falkland Islands Company Limited (Stanley
Division), Gosport Ferry Limited and Momart Limited.
Full scope or specified audit procedures were performed on the
financial information of components representing 100% of the
Group’s revenue and 92% of the Group’s profit before tax.
2
ANNUAL REPORT 2023
32
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those that had the greatest
effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In the graph below, we have presented the key audit matters,
significant risks and other risks relevant to the audit.
Description
Audit
response
KAM
Disclosures Our results
High
t
c
a
p
m
i
t
n
e
m
e
t
a
t
s
l
a
i
c
n
a
n
i
f
l
a
i
t
n
e
t
o
P
Low
Going concern
Uncertain tax position
The revenue cycle contains fraudulent
transactions - 70 house contract
The revenue cycle contains
fraudulent transactions - other
revenue streams
Recoverability of parent company’s
investment in subsidiaries (parent company
only)
Application of hedge
accounting
Carrying value of goodwill
Management override of
controls
Valuation of defined benefit
pension scheme liabilities
Inventory provision
Low
Extent of management judgement
High
Key audit matter
Significant risk
Other risk
3
ANNUAL REPORT 2023
33
Key Audit Matter – Group
How our scope addressed the matter – Group
The revenue cycle includes fraudulent
transactions – 70 house contract
We identified accuracy of revenue as one of the
most significant assessed risks of material
misstatement due to fraud.
Under ISA (UK) 240 there is a rebuttable
presumed risk that revenue may be misstated
due to the improper recognition of revenue.
FIC has a significant contract with the Falkland
Islands Government and Ministry of Defence
(MOD) for the construction of 70 houses.
This contract includes a significant degree of
judgement and management estimation relating
to the costs to complete. We consider this to be
where the opportunity and incentive for revenue
misstatement could occur.
In responding to the key audit matter, we
performed the following audit procedures:
We have obtained an understanding and
assessed the reasonableness of the design
and implementation of processes and controls
relating to the revenue recognition across the
group;
Inspected the contract as well as management’s
paper setting out the basis for the amount of
revenue recognised in the year;
assessed the criteria set out in IFRS 15 in
particular whether the contract consisted of
one performance obligation or various
individual performance obligations and
whether it was appropriate for revenue to be
recognised over time;
held discussions with local project managers in
order to understand the status of the contract
and how progress was assessed from an
operational perspective and considered
whether this was consistent with the method
to determine the level of progress for
determining the amount of revenue to be
recognised to date;
assessed the level of costs to complete with a
particular focus on the element of costs
included for risk and contingency by reference
to the costs incurred to date and the number
of houses complete/in construction by the
year end. We determined an auditor’s range
for such amounts and found management’s
estimate to be within our range; and
assessed the qualifications and competency of
project managers responsible for the
estimation of future costs.
Relevant disclosures in the Annual Report
and Accounts 2023
• Financial statements: Note 4, Revenue and
Note 30, Accounting estimates
• Audit committee report: Areas of judgement
Our results
We did not identify from our audit procedures
indicators of inappropriate revenue recognition.
We have therefore concluded that revenue
recognition is materially consistent with the IFRS
15.
and estimation
Key Audit Matter – Parent company
How our scope addressed the matter– Parent
company
Recoverability of parent company’s
investment in subsidiaries
We identified valuation of investments as one of
the most significant assessed risks of material
misstatement due to error.
In responding to the key audit matter, we
performed the following audit procedures:
We have obtained an understanding of the
relevant controls that management has
4
ANNUAL REPORT 2023
34
Key Audit Matter – Parent company
Investments in subsidiaries are carried at cost
less necessary impairments and should be
valued on an individual basis.
The investments in subsidiaries are included
within the Company Balance sheet of FIH Group
Plc and are recorded at £18.8m.
Management perform an annual assessment of
individual investment balances for any
impairment triggers.
The determination of whether there are indicators
of impairment under International Accounting
Standard (IAS) 36 ‘Impairment of assets’ includes
significant judgement and estimates to be applied
including the consideration of internal and
external factors such as changes in technology;
below-expected economic performance; and a
consideration of the carrying amount of the
investment compared with the subsidiaries’
assets.
Relevant disclosures in the Annual Report
and Accounts 2023
• Financial statements: Note 14, Investment in
subsidiaries, Note 1, Accounting Policies
(Restatement)
• Audit committee report: Areas of judgement
and estimation
How our scope addressed the matter– Parent
company
implemented over the process for evaluating
the valuation of investments in subsidiaries;
We evaluated management’s assessment as to
whether impairment indicators exist in
investment balances and challenged these
impairment indicators;
Where impairment indicators existed, or where
management’s primary consideration of
impairment indicators was based on an
estimation of future economic performance,
we obtained and assessed management’s
impairment calculation, including evaluating
the discounted cash flow models the key
assumptions underpinning the carrying value
of investments;
We considered management’s historic forecasts
against actual results as part of other audit
testing, to obtain an indicator of the reliability
and reasonability of management’s forecasts;
We used our internal valuations experts to
support our challenge of the assumptions
used by management to determine the
recoverable amount; and
We assessing the adequacy of the accounting
disclosures made in the financial statements
to determine compliance with the
requirements of IAS 36.
Key observations
We identified one investment where the carrying
value of the investment was supported by the
recoverable amount but had been impaired
previously. Based on the analysis shared which
was produced by management at the time of
preparing the 2021 financial statements, it is clear
that the recoverable amount exceeded the
carrying amount such that the impairment had
been made in error.
We identified a further investment, which should
have been impaired previously, but hadn’t.
As a result of our challenges management have
recorded prior period adjustments in relation to
both of the above items.
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in
the auditor’s report.
Materiality was determined as follows:
5
ANNUAL REPORT 2023
35
Materiality measure Group
Parent company
Materiality for
financial statements
as a whole
We define materiality as the magnitude of misstatement in the financial statements
that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of these financial statements. We use materiality in
determining the nature, timing and extent of our audit work.
Materiality threshold
£200,000, which is determined by
reference to several benchmarks as
explained below.
£530,000, which represents 1% of the
parent company’s total assets. For the
purpose of group testing this has been
capped at £140,000, 70% of Group
materiality (0.2% of total assets).
Significant judgements
made by auditor in
determining the
materiality
Determining materiality involves the
exercise of professional judgement:
In determining materiality, we made the
following significant judgements:
•
Total assets was considered the most
appropriate benchmark because the
parent company’s purpose is to hold
investments in its subsidiary companies
and in the amounts receivable from
subsidiary companies, and does not
trade.
•
•
The Group engagement team
compared the determined
amount against the range of
materialities that would have
been calculated had a number of
benchmarks (revenue, profit
before tax, total assets) been
used, recognising that a number
of measures are relevant to
users of the financial
statements.
The determined materiality
equates to approximately 0.4%
or revenue, approximately 4.9%
of profit before tax, and
approximately 0.2% of total
assets.
Performance
materiality used to
drive the extent of
our testing
We set performance materiality at an amount less than materiality for the financial
statements as a whole to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole.
Performance
materiality threshold
£130,000, which is 65% of financial
statement materiality.
£344,500, which is 65% of financial
statement materiality. This has been capped
at £91,000, which is 70% of group
performance materiality.
Significant judgements
made by auditor in
determining the
performance
materiality
In determining performance
materiality, we made the following
significant judgements:
In determining performance
materiality, we made the following
significant judgements:
•
•
•
this is our first year of auditing
the Group and therefore the
performance materiality level
reflects our level of experience
and cumulative knowledge of the
business;
our assessment of the strength
and effectiveness of the design
of the control environment;
FIH operate in relatively stable
markets with long-term
contracts; and
• A significant portion of the
group’s activities are based in
6
•
•
this is our first year of
auditing the parent
company and therefore the
performance materiality
level reflects out level of
experience and cumulative
knowledge of the business;
and
our assessment of the
strength and effectiveness
of the design of the control
environment.
ANNUAL REPORT 2023
36
Materiality measure Group
Parent company
the Falkland Islands and are
therefore remote from head
office.
Specific materiality
We determine specific materiality for one or more particular classes of transactions,
account balances or disclosures for which misstatements of lesser amounts than
materiality for the financial statements as a whole could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial
statements.
Specific materiality
We determined a lower level of specific materiality for the following areas:
• Related party transactions;
• Directors’ remuneration; and
• Auditor’s remuneration
Communication of
misstatements to the
audit committee
Threshold for
communication
We determine a threshold for reporting unadjusted differences to the audit
committee.
£10,000 and misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
£26,500 and misstatements below that
threshold that, in our view, warrant reporting
on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group
Overall materiality – Parent company
Profit before
tax
£3,139,000
PM
£130,000,
65%
FSM
£200,000
Total Assets
£58,064,000
PM
£344,500,
65%
FSM
£530,000,
1%
TFPUM
£70,000,
35%
TFPUM
£185,500,
35%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the group’s and the parent company’s business and in
particular matters related to:
7
ANNUAL REPORT 2023
37
Understanding the group, its components, and their environments, including group-wide controls
• Obtaining an understanding of the Group and its environment, including group-wide controls, and assessed the risks of
material misstatement at the group level; and
• Evaluation of the design and implementation of controls over the financial reporting systems and effectiveness of the
control environment as part of our risk assessment.
Identifying significant components
We assessed quantitative factors to identify components which are significant to the Group. We determined any individual
component which significantly contribution to the group’s profit before tax to be financially significant to the Group.
Individually financially significant components were identified as FIH Group Plc, The Falkland Islands Company Limited
(Stanley Division), Gosport Ferry Limited and Momart Limited. These four components were subject to full scope audit
procedures and represent 100% of the Group’s revenue and 92% of the Group’s profit before tax. All work in relation to
these components was performed by the Group audit team;
Three components were identified for specified audit procedures on specific balances. The work on these components was
targeted according to the nature of the balances within these components. All work in relation to these components was
performed by the Group audit team.
The remaining ten components were subject to analytical procedures commensurate with their significance to the Group’s
results and financial position.
Type of work to be performed on financial information of parent and other components (including how it addressed the key
audit matters)
In order to address the audit risks identified during our planning procedures, including the key audit matter as set out above,
for the Company and other financially significant components requiring a full-scope approach, we evaluated the design and
implementation of controls over the financial reporting systems identified as part of our risk assessment and addressed
critical accounting matters. We then undertook substantive testing on significant transactions and material account
balances and consolidation adjustments;
For components identified for specified audit procedures, audit procedures were performed on cash and Property, plant and
equipment balances to provide us with sufficient group coverage in these areas.
Performance of our audit;
Work performed over full scope components and specific procedure components and consolidation adjustments covered
100% of Group revenues and 92% of Group profit before tax;
Audit of all full scope and specific procedure components was performed by the Group team, and involved two visits, including
one by the audit partner, to the Falkland Islands to perform in-person audit procedures; and
The remaining components of the Group were subject to analytical procedures commensurate with their significance to the
Group’s results and financial position.
Audit approach
Full-scope audit
Specified audit
procedures
Analytical procedures
Other information
No. of
components
% coverage
total assets
% coverage
revenue
4
3
10
93%
7%
0%
100%
0%
0%
%
coverage
PBT
92%
0%
8%
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 audit or otherwise appears to be materially
8
ANNUAL REPORT 2023
38
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is 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.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent company 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.
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities in respect of the Annual Report and financial
statements set out on page 14, 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 group’s and the parent 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 group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures
are capable of detecting irregularities, including fraud, is detailed below:
• We obtained an understanding of the legal and regulatory frameworks that are most applicable to the company and
determined that the most significant which are directly relevant to specific assertions in the financial statements are those
related to the reporting frameworks (UK-adopted international accounting standards, the Companies Act 2006, AIM Rules
for Companies, National Minimum Wage Act 1998 and relevant UK and Falkland Islands tax legislation);
• We obtained an understanding of how the Group and company are complying with those legal and regulatory frameworks
by making inquiries of management, the Audit Committee and other personnel within the organisation. We corroborated
inquiries through our review of Board minutes and papers provided to the Audit Committee;
9
ANNUAL REPORT 2023 39
• We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might
occur. Audit procedures included:
o
Identifying and assessing the design effectiveness of management’s controls designed to prevent and detect
irregularities;
o Challenging assumptions and judgements made by management in its evaluation of accounting estimates;
o
Identifying and testing those journal entries matching certain risk criteria.
These audit procedures were designed to provide reasonable assurance that the financial statements were free from
fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that
result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also,
the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial
statements, the less likely we would become aware of it;
It is the engagement leader’s assessment that the audit team collectively had the appropriate competence and
capabilities to identify or recognise non-compliance with laws and regulations.
•
•
• We communicated relevant laws and regulations and potential fraud risks to all engagement team members, and
remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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 auditor’s report.
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 an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Matthew Buckingham
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
17th Floor
103 Colmore Row
Birmingham
B3 3AG
4 August 2023
10
ANNUAL REPORT 2023
40
Consolidated Income Statement
FOR THE YEAR ENDED 31 MARCH 2023
Notes
4
Revenue
Underlying
2023
£’000
52,712
Cost of sales
(31,588)
Gross profit
21,124
Non-trading
Items
(Note 5)
2023
£’000
-
-
-
Total
2023
£’000
Underlying
2021
£’000
52,712
40,319
(31,588)
(23,405)
21,124
16,914
Non-trading
Items
(Note 5)
2021
£’000
-
-
-
Total
2022
£’000
40,319
(23,405)
16,914
Operating expenses
(17,111)
(79)
(17,190)
(13,834)
(300)
(14,134)
Operating
profit / (loss)
Net Finance income /
(expense)
Profit / before tax
4,013
(795)
3,218
(79)
907
828
3,934
3,080
(300)
2,780
112
(796)
4,046
2,284
704
404
(92)
2,688
Taxation
(705)
(219)
(924)
(1,094)
(109)
(1,203)
6
8
9
Profit for the year
attributable to
equity holders of
the company
10
Earnings per share
Basic
Diluted
2,513
609
3,122
1,190
295
1,485
24.9p
24.9p
11.9p
11.9p
The accompanying notes form part of these Financial Statements.
ANNUAL REPORT 2023
41
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 31 MARCH 2023
Notes
Profit for the year
Cash flow hedges: effective portion of changes in fair value
Amortisation of hedge reserve
Deferred tax on share options and other financial liabilities
Deferred tax on effective portion of changes in fair value
Items that are or may be reclassified subsequently to profit or loss
Re-measurement of the FIC defined benefit pension scheme
Movement on deferred tax asset relating to the pension scheme
Items which will not ultimately be recycled to the income statement
17
17
23
17
Total other comprehensive income
2023
£’000
3,122
-
13
(3)
-
10
553
(176)
377
387
2022
£’000
1,485
172
3
58
(40)
193
237
(62)
175
368
Total comprehensive income
3,509
1,853
The accompanying notes form part of these Financial Statements.
ANNUAL REPORT 2023 Consolidated Balance Sheet
AT 31 MARCH 2023
Notes
2023
£'000
Restated 2022
£'000
Restated 1 April
2021 £'000
42
Non-current assets
Intangible assets
Property, plant and equipment
Investment properties
Investment in Joint venture
Trade and other receivables due in more than one year
Finance lease receivable
Deferred tax assets
Derivative financial instruments
Total non-current assets
Current assets
Inventories
Trade and other receivables
Finance lease receivable
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Corporation tax payable
Total current liabilities
Non-current liabilities
4,376
38,677
7,922
259
-
681
482
1,559
53,956
6,876
10,189
397
12,800
30,262
84,243
(13,718)
(1,520)
(599)
4,229
38,718
8,164
259
44
725
666
644
4,183
39,562
7,123
259
88
590
739
-
53,449
52,544
6,740
7,947
511
9,572
24,770
78,219
(9,970)
(1,536)
(363)
5,871
5,868
558
14.556
26,853
79,397
(6,775)
(3,424)
(113)
(15,837)
(11,869)
(10,312)
Interest-bearing loans and borrowings
(18,214)
(19,183)
(23,832)
11
12
13
15
19
16
17
26
18
19
16
20
22
21
21
26
23
17
Derivative financial instruments
Employee benefits
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
Net assets
25
Capital and reserves
Equity share capital
Share premium account
Other reserves
Retained earnings
Hedging reserve
Total equity
-
(1,978)
(4,215)
(24,407)
(40,269)
43,974
1,251
17,590
703
24,514
(84)
43,974
-
(2,562)
(3,780)
(25,525)
(37,394)
40,825
1,251
17,590
703
21,378
(97)
40,825
(234)
(2,842)
(3,113)
(30,021)
(40,333)
39,064
1,251
17,590
703
19,752
(232)
39,064
These financial statements, of which the accompanying notes form part, were approved by the Board of directors on
4 August 2023 and were signed on its behalf by:
S I Munro
Director
R Shamu
Director
ANNUAL REPORT 2023
43
Company Balance Sheet
AT 31 MARCH 2023
Notes
13
14
19
26
17
Non-current assets
Investment properties
Investment in subsidiaries
Loans to subsidiaries
Derivative financial instruments
Deferred tax
Total non-current assets
Current assets
19
Trade and other receivables
Corporation tax receivable
20
Cash and cash equivalents
22
21
21
17
Total current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Total current liabilities
Non-current liabilities
Deferred tax
Derivative financial instruments
Total non-current liabilities
TOTAL LIABILITIES
Net assets
25
Capital and reserves
Equity share capital
Share premium account
Other reserves
Retained earnings
Hedging reserve
Total equity
2023
£'000
Restated 2022
£’000
Restated 1 April
2021 £’000
18,751
26,757
10,257
1,559
-
18,956
26,762
10,057
644
-
19,164
26,737
10,207
-
44
57,324
56,419
56,152
11
189
3,307
3,507
45
84
4,376
4,505
60,831
60,924
(5,939)
(529)
(6,468)
(5,849)
(529)
(6,378)
118
54
5,462
5,634
61,786
(6,391)
(520)
(6,911)
(391)
-
(146)
-
(12,008)
(12,285)
(18,476)
(18,663)
42,355
42,261
1,251
17,590
5,389
18,209
(84)
1,251
17,590
5,389
18,128
(97)
42,355
42,261
-
(234)
(12,902)
(19,813)
41,973
1,251
17,590
5,389
17,975
(232)
41,973
Interest-bearing loans and borrowings
(11,617)
(12,139)
(12,668)
As permitted by Section 408 of the Companies Act 2006, a separate profit and loss account of the Parent Company has
not been presented. The Parent Company’s profit for the financial year is £440,000 (2022: £245,000).
These financial statements, of which the accompanying notes form part, were approved by the Board of directors on
4 August 2023 and were signed on its behalf by:
S I Munro
Director
Registered company number: 03416346
R Shamu
Director
ANNUAL REPORT 2023
Consolidated Cash Flow Statement
FOR THE YEAR ENDED 31 MARCH 2023
44
Notes
11
12
13
23
24
Cash flows from operating activities
Profit for the year after taxation
Adjusted for:
Non-cash items:
Amortisation
Depreciation: Property, plant and equipment
Depreciation: Investment properties
Interest cost on pension scheme liabilities
Equity-settled share-based payment expenses
Fair value movement in derivative financial instrument
Gain on disposal of fixed assets
Exchange losses
Bank interest payable
Lease liability finance expense
Decrease / (increase) in finance lease receivable
Corporation and deferred tax expense
Non-cash items
Operating cash flow before changes in working capital
2023
£'000
Restated 2022
£’000
3,122
1,485
10
2,420
210
70
41
(907)
(337)
26
424
304
158
924
3,343
6,465
21
2,216
197
56
45
(704)
(9)
13
436
304
(88)
1,203
3,690
5,175
Increase in trade and other receivables
(2,198)
(2,035)
Increase in inventories
Increase in trade and other payables
Changes in working capital
Cash generated from operations
Payments to pensioners
Corporation taxes paid
Net cash flow from operating activities
Cash flows from investing activities
(136)
3,748
1,414
7,879
(101)
(243)
7,535
(869)
3,195
291
5,466
(99)
(256)
5,111
12
11
11
Purchase of property, plant and equipment
(1,859)
(1,333)
Purchase of Intangibles
Purchase of investment properties
Proceeds from sale of property, plant and equipment
(115)
(10)
378
(67)
(1,238)
76
Net cash flow from investing activities
(1,606)
(2,562)
Continued on next page.
ANNUAL REPORT 2023
45
Consolidated Cash Flow Statement
FOR THE YEAR ENDED 31 MARCH 2023
Notes
Cash flow from financing activities
Repayment of bank loans
Bank interest paid
Repayment of lease liabilities principal
Lease liabilities interest paid
Cash outflow on nil cost option exercise
Dividends paid
Net cash flow from financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at start of year
Exchange losses on cash balances
Cash and cash equivalents at end of year
The accompanying notes form part of these Financial Statements.
2023
£'000
(928)
(424)
(618)
(304)
-
(401)
(2,675)
3,254
9,572
(26)
12,800
2022
£'000
(5,927)
(436)
(716)
(304)
(12)
(125)
(7,520)
(4,971)
14,556
(13)
9,572
ANNUAL REPORT 2023
Company Cash Flow Statement
FOR THE YEAR ENDED 31 MARCH 2023
Notes
Cash flows from operating activities
Holding Company profit for the year
Adjusted for:
Bank interest payable
Fair value movement in financial instrument
Equity-settled share-based payment expenses
13
Depreciation: Investment properties
Corporation and deferred tax expense / (income)
Non-cash adjustment
Operating cash flow before changes in working capital
Decrease in trade and other receivables
(Decrease) / increase in trade and other payables
Changes in working capital and provisions
Cash generated from operations
Corporation taxes paid
Net cash flow from operating activities
Cash flow from investing activities
Purchase of property, plant and equipment
Cash outflows in inter-company borrowing
Cash inflows in inter-company borrowing
Net cash flow from investing activities
Cash flow from financing activities
Bank loan repaid
Interest paid
Cash inflows / (outflows) in inter-company borrowing
Cash (outflows) / inflows in inter-company borrowing
Cash outflow on nil cost option exercise
Dividends paid
Net cash flow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
The accompanying notes form part of these Financial Statements.
46
2023
£’000
Restated 2022
£’000
440
245
368
(907)
47
210
250
(32)
408
34
(95)
(61)
347
(105)
242
(5)
-
-
(5)
(522)
(368)
185
(200)
-
(401)
(1,306)
(1,069)
4,376
3,307
387
(704)
20
208
135
46
291
73
333
406
697
(14)
683
-
(150)
850
700
(520)
(387)
(1,875)
450
(12)
(125)
(2,469)
(1,086)
5,462
4,376
ANNUAL REPORT 2023
47
Consolidated Statement of Changes in
Shareholders’ Equity
FOR THE YEAR ENDED 31 MARCH 2023
Equity share
capital
£’000
Share
premium
account
£’000
Other
reserves
£’000
Retained
earnings
£’000
Hedge
reserve
£’000
Total
equity
£’000
Balance 1 April 2021 - restated
1,251
17,590
703
19,752
(232)
39,064
Profit for the year
Cash flow hedges: effective
portion of changes in fair value
Amortisation of hedge reserve
Deferred tax on cash flow hedges
Deferred tax on other financial
liabilities
Re-measurement of the defined
benefit pension liability, net of tax
Total comprehensive income
Transactions with owners in their
capacity as owners:
Share option exercise
Share based payments
Dividends paid
Total transactions with owners
Balance at 31 March
2022-restated
Profit for the year
Amortisation of hedge reserve
Deferred tax on share options
and other financial liabilities
Re-measurement of the defined
benefit pension liability, net of tax
Total comprehensive income
Transactions with owners in their
capacity as owners:
Share based payments
Dividends paid
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,485
-
-
-
58
175
-
172
3
(40)
-
-
1,485
172
3
(40)
58
175
1,718
135
1,853
(12)
45
(125)
(92)
-
-
-
-
(12)
45
(125)
(92)
1,251
17,590
703
21,378
(97)
40,825
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,122
-
(3)
377
3,496
41
(401)
(360)
-
13
-
-
13
-
-
-
3,122
13
(3)
377
3,509
41
(401)
(360)
Balance at 31 March 2023
1,251
17,590
703
24,514
(84)
43,974
The accompanying notes form part of these Financial Statements.
ANNUAL REPORT 2023 48
Company Statement of Changes in
Shareholders’ Equity
FOR THE YEAR ENDED 31 MARCH 2023
Equity share
capital
£’000
Share
premium
account
£’000
Other
reserves
£’000
Retained
earnings
£’000
Hedge
reserve
£’000
Total
equity
£’000
Balance at 1 April 2021-restated
1,251
17,590
5,389
17,975
(232)
41,973
Profit for the year
Cash flow hedges: effective portion
of changes in fair value
Amortisation of hedge reserve
Deferred tax on cash flow hedges
Total comprehensive loss
Transactions with owners in their
capacity as owners:
Share option exercise
Share based payments
Dividends paid
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
245
-
-
-
245
(12)
45
(125)
(92)
-
172
3
(40)
135
-
-
-
-
245
172
3
(40)
380
(12)
45
(125)
(92)
Balance at 31 March 2022-restated
1,251
17,590
5,389
18,128
(97)
42,261
Profit for the year
Amortisation of hedge reserve
Total comprehensive income
Transactions with owners in their
capacity as owners:
Share based payments
Dividends paid
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
440
-
440
42
(401)
(359)
-
13
13
-
-
440
13
453
42
(401)
(359)
Balance at 31 March 2023
1,251
17,590
5,389
18,209
(84)
42,355
The accompanying notes form part of these Financial Statements.
ANNUAL REPORT 2023 49
Notes to the Financial Statements
1. Accounting policies
General information
FIH group plc (the “Company”) is a public company limited by shares incorporated and domiciled in the UK.
Reporting entity
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”).
The Parent Company financial statements present information about the Company as a separate entity and not about
its Group. The consolidated financial statements of the Group for the year ended 31 March 2023 were authorised for issue
in accordance with a resolution of the directors on 3 August 2023.
Basis of preparation
Both the Parent Company financial statements and the Group financial statements have been prepared in accordance
with UK-adopted International Accounting Standards (“Adopted IFRS”). On publishing the Parent Company financial
statements together with the Group financial statements, the Company is taking advantage of the exemption in s408 of
the Companies Act 2006 not to present its individual income statement and related notes that form a part of the approved
financial statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in
these consolidated financial statements.
Judgements made by the directors in the application of these accounting policies that have a significant effect on the
financial statements and estimates with a significant risk of material adjustment next year are discussed in note 30.
The financial statements are presented in pounds sterling, rounded to the nearest thousand and are prepared on the
historical cost basis, as modified by the revaluation of certain financial instruments held at fair value.
The cash flows between the parent Company and its subsidiaries have been classified as either financing or investing
activities, depending on whether they relate to subsidiaries in a net payable or net receivable position respectively.
Going concern
The directors are responsible for preparing a going concern assessment covering a period of at least 12 months with the
directors having assessed the period to 31st of March 2025 (the going concern period). The financial statements have been
prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
As at 31 March 2023 the Group had net current assets of £14.8 million, cash balances of £12.8 million and net debt of
approximately £7.5 million.
Cash flow forecasts for the Group have been prepared covering the going concern period and the directors have considered
downside scenarios to the base case forecasts to reflect emerging risks and uncertainties as a result of global economic
conditions. The base case and sensitised forecasts indicate that the business will be cash generative over this period and
that the Group will comply with its covenants and have sufficient funds to meet its liabilities as they fall due throughout the
going concern period.
Consequently, the directors are confident that the Group and Company will have sufficient funds to continue to meet
its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and the financial
statements have therefore been prepared on a going concern basis.
ANNUAL REPORT 2023 50
Restatement
The prior year financial information for the following areas was restated as set out below.
Right of use assets
The seabed lease in PHFC contains variable rental payments which are reset every five years based on the revenue of the
ferry business. This lease was previously incorrectly accounted for as one 50-year lease with all future expected payments
over the period of the lease reflected in the measurement of the liability. The liability has been restated as an element of
the future lease payments varies with the revenue of PHFC and should not have been reflected in the measurement of the
liability. The lease liability will be remeasured in the future when variable payments become fixed. The impact of this was an
increase in opening retained earnings at 1 April 2021 of £0.2 million and reductions in property, plant and equipment, and
interest-bearing loans and borrowings of £0.8 million and £1.0 million respectively. The impact at 31 March 2022 was an
increase in retained earnings of £0.2 million and reductions in property, plant and equipment and interest-bearing loans and
borrowings of £0.4 million and £0.6 million respectively. There was no impact on profit for the year ended 31 March 2022.
Impairment of investment in Company
During the year, it was identified that the parent company’s investment in Momart had been incorrectly impaired in the year
ended 31 March 2020. As a result, the previously recorded impairment charge of £5.1m has been reversed at 31 March
2021. It was also noted that the parent Company’s investment in Erebus Limited should have been fully impaired in a year
prior to 1 April 2021. Consequently, an impairment of £2.4 million was recorded at 1 April 2021. The net impact of these
adjustments was to increase investments and retained earnings by £2.7m at both 31 March 2021 and 31 March 2022.
There was no impact on profit for the year ended 31 March 2022.
Hedge accounting
Following a reassessment of the criteria for applying hedge accounting after the benchmark change from LIBOR to
SONIA, it was concluded that the hedging criteria were no longer met. Hedge accounting was therefore discontinued from
1 January 2022, resulting in a credit of £0.5 million to the prior year profit and loss (comprising a £0.7m credit to net
finance income and a £0.2m charge to tax expense) which was previously incorrectly accounted for in the hedging reserve.
The impact on both basic and diluted EPS in the year to 31 March 2022 was an increase of 4.3p.
Basis of consolidation
The consolidated financial statements comprise the financial statements of FIH group plc and its subsidiaries (the “Group”).
A subsidiary is any entity FIH group plc has the power to control. Control is determined by FIH group plc’s exposure or
rights, to variable returns from its involvement with the subsidiary and the ability to affect those returns through its power
over the subsidiary. The financial statements of subsidiaries are prepared for the same reporting period as the Parent
Company. The accounting policies of subsidiaries have been changed when necessary, to align them with the policies
adopted by the Group.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from
the date on which control is transferred out of the Group.
All intra-company balances and transactions, including unrealised profits arising from intra-group transactions, are eliminated
in full in preparing the consolidated financial statements. Investments in subsidiaries within the Company balance sheet are
stated at impaired cost.
Presentation of income statement
Due to the non-prescriptive nature under IFRS as to the format of the income statement, the format used by the Group is
explained below.
Operating profit is the pre-finance profit of continuing activities and acquisitions the Group, and in order to achieve
consistency and comparability, is analysed to show separately the results of normal trading performance (“underlying
profit”), individually significant charges and credits, changes in the fair value of financial instruments and non-trading items.
Such items arise because of their size or nature.
ANNUAL REPORT 2023 51
Notes to the Financial Statements
CONTINUED
In the year ended 31 March 2023, non-trading items were made up of £79,000 redundancy costs. In the year ended
31 March 2022, non-trading items were made up of £300,000 of people-related restructuring costs including employee
redundancies and compensation payable to the former Chief Executive. Fair value movements on hedging items are
included as a non-trading finance income/cost.
Foreign currencies
Transactions in foreign currencies are translated to the functional currencies of Group entities at exchange rates ruling
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the
functional currency using the relevant rates of exchange ruling at the balance sheet date and the gains or losses thereon
are included in the income statement.
Non-monetary assets and liabilities are translated using the exchange rate at the date of the initial transaction.
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost comprises
purchase price and directly attributable expenses. Depreciation is charged to the income statement on a straight-line basis
over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are
as follows:
Right to use assets
Freehold buildings
Long leasehold land and buildings
Vehicles, plant and equipment
Ships
5 – 50 years
20 – 50 years
50 years
4 – 10 years
15 – 30 years
The carrying value of assets and their useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
If an indication of impairment exists, the assets are written down to their recoverable amount and the impairment is charged
to the income statement in the period in which it arises. Freehold land and assets under construction are not depreciated.
Investment properties - Group
Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment
properties are measured at cost less accumulated depreciation and impairment losses. Cost comprises purchase price and
directly attributable expenses. Depreciation is charged to the income statement on a straight-line basis over the estimated
useful lives of each property. The investment property portfolio in the Falkland Islands consists mainly of properties built by
FIC, and these and the properties purchased are depreciated over an estimated useful life of 50 years.
Investment properties - Company
The investment property in the Company consists of the Leyton site purchased in December 2018, with five warehouses
which are rented to Momart. The purchase price allocated to land has not been depreciated, and the purchase price
allocated to each property has been depreciated on a straight-line basis over the expected useful life, after consideration
of the age and condition of each property, down to an estimated residual value of nil.
The carrying value of assets and their useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
If an indication of impairment exists, the assets are written down to their recoverable amount and the impairment is charged
to the income statement in the period in which it arises. Freehold land is not depreciated.
Joint Ventures
Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual
agreement and requiring the joint venture partners’ unanimous consent for strategic financial and operating decisions. FIH
group plc has joint control over an investee when it has exposure or rights to variable returns from its involvement with the
joint venture and has the ability to affect those returns through its joint power over the entity.
ANNUAL REPORT 2023
52
Jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised
at cost. The consolidated financial statements include the Group’s share of the total comprehensive income and equity
movements of equity accounted investees, from the date that significant influence or joint control commences until the
date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in an equity
accounted investee, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except
to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an investee.
Intangible assets
Goodwill
Goodwill arises on the acquisition of subsidiaries and businesses.
Acquisitions prior to 1 April 2006
In respect of acquisitions prior to transition to IFRS, goodwill is recorded on the basis of deemed cost, which represents the
amount recorded under previous Generally Accepted Accounting Principles (“GAAP”) as at the date of transition. Goodwill
is not amortised but reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate
that the carrying value may be impaired. At 31 March 2023, all goodwill arising on acquisitions prior to 1 April 2006 has
either been offset against other reserves on acquisition, or written off through the income statement as an impairment in
prior years.
Acquisitions on or after 1 April 2006
Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the
acquirer’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the acquired business.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised
but reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value
may be impaired. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of
intangible assets unless such lives are indefinite. Other intangible assets are amortised from the date they are available for
use. In the year ended 31 March 2014, the directors reviewed the life of the brand name at Momart and after considerations
of its strong reputation in a niche market and its history of stable earnings and cash flow, which is expected to continue into
the foreseeable future, determined that its useful life is indefinite, and amortisation ceased from 1 October 2013.
Computer software
Acquired computer software is capitalised as an intangible asset on the basis of the cost incurred to acquire and bring
the specific software into use. Amortisation is charged to the income statement on a straight-line basis over the estimated
useful lives of intangible assets from the date that they are available for use. The estimated useful life of computer software
is seven years.
Impairment of non-financial assets
At each reporting date the Group assesses whether there is any indication that an asset may be impaired. Goodwill and
intangible assets with indefinite lives are tested for impairment, at least annually. Where an indicator of impairment exists
or the asset requires annual impairment testing, the Group makes a formal estimate of the recoverable amount. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. Impairment losses are recognised in the income statement.
Recoverable amount is the greater of an asset’s or cash-generating unit’s fair value, less cost to sell or value in use. It is
determined for an individual asset, unless the asset’s value in use cannot be estimated and it does not generate cash
inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount
is determined for the cash-generating unit to which the asset belongs. In assessing value in use, the estimated future cash
flows are discounted to their present value using a discount rate that reflects current market assessments of the time value
of money and risks specific to the asset.
ANNUAL REPORT 2023 53
Notes to the Financial Statements
CONTINUED
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses are reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
Finance income and expense
Net financing costs comprise interest payable and interest receivable which are recognised in the income statement.
Interest income and interest payable are recognised as a profit or loss as they accrue, using the effective interest method.
Employee share awards
The Group provides benefits to certain employees (including directors) in the form of share-based payment transactions,
whereby the recipient renders service in return for shares or rights over future shares (“equity settled transactions”). The
cost of these equity settled transactions with employees is measured by reference to an estimate of their fair value at
the date on which they were granted using an option input pricing model taking into account the terms and conditions
upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of
share options for which the related service and non-market performance conditions are expected to be met, such that
the amount ultimately recognised as an expense is based on the number of share options that meet the related service
and non-market performance conditions at the vesting date. For share-based payment awards with market performance
vesting conditions, the grant date fair value of the share-based payments is measured to reflect such conditions and there
is no true up for differences between expected and actual outcomes.
The cost of equity settled transactions is recognised, together with a corresponding increase in reserves, over the period in
which the performance conditions are fulfilled, ending on the date that the option vests. Where the Company grants options
over its own shares to the employees of subsidiaries, it recognises, in its individual financial statements, an increase in the
cost of investment in its subsidiaries equal to the equity settled share-based payment charge recognised in its consolidated
financial statements with the corresponding credit being recognised directly in equity.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product
to its present location and condition. The cost of raw materials, consumables and goods for resale comprises purchase
cost, on a weighted average basis and where applicable includes expenditure incurred in transportation to the Falkland
Islands. Work-in-progress and finished goods cost includes direct materials and labour plus attributable overheads based
on a normal level of activity. Construction-in-progress is stated at the lower of cost and net realisable value. Net realisable
value is estimated at selling price in the ordinary course of business less costs of disposal.
Pensions
Defined contribution pension schemes
The Group operates defined contribution schemes at PHFC and Momart, and at FIC employees are enrolled in the
Falkland Islands Pension Scheme (“FIPS”). The assets of all these schemes are held separately from those of the Group in
independently administered funds. The amount charged to the income statement represents the contributions payable to
the schemes in respect to the accounting period.
Defined benefit pension schemes
The Group has one pension scheme providing benefits based on final pensionable pay, which is unfunded and closed to
further accrual. The Group’s net obligation in respect of the defined benefit pension plan is calculated by estimating the
amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit
is discounted to its present value. The liability discount rate is the yield at the balance sheet date on AA credit-rated bonds
that have maturity dates approximating the terms of the Group’s obligations. The calculation is performed by a qualified
actuary using the projected unit credit method.
ANNUAL REPORT 2023 54
The current service cost and costs from settlements and curtailments are charged against operating profit. Past service
costs are recognised immediately within profit and loss. The net interest cost on the defined benefit liability for the period is
determined by applying the discount rate used to measure the defined benefit obligation at the end of the period to the net
defined benefit liability at the beginning of the period. It takes into account any changes in the net defined benefit liability
during the period. Re-measurements of the defined benefit pension liability are recognised in full in the period in which they
arise in the statement of comprehensive income.
Trade and other receivables
Trade receivables are initially recorded at transaction price and are subsequently carried at amortised cost, less provision for
impairment. Any change in their value through impairment or reversal of impairment is recognised in the income statement.
Trade and other payables
Trade and other payables are stated at their cost less payments made.
Dividends
Dividends unpaid at the balance sheet date are only recognised as liabilities at that date to the extent that they are
appropriately authorised and are no longer at the discretion of the Company.
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash balances and call deposits with an original maturity of three
months or less.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.
Taxation
Taxation on the profit or loss for the year comprises current and deferred tax. Current tax is recognised in the income
statement, except to the extent that it relates to items recognised directly in equity, in which case it is recognised directly
in equity or in other comprehensive income. Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted, or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect
of previous years.
Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following
temporary timing differences are not recognised:
• Goodwill not deductible for tax purposes; and
•
Initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profits.
Temporary differences related to investments in subsidiaries, to the extent that it is probable that they will not reverse
in the foreseeable future.
•
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised. Deferred tax is recognised at the tax rates
that are expected to be applied to the temporary differences when they reverse, based on rates that have been enacted or
substantially enacted by the reporting date.
ANNUAL REPORT 2023 55
Notes to the Financial Statements
CONTINUED
Cash-flow hedges
The effective portions of changes in the fair values of derivatives that are designated and qualify as cash-flow hedges
are recognised in equity. The gain or loss to any ineffective portion is recognised immediately in the income statement.
Amounts accumulated in the hedging reserve are recycled to the income statement in the periods when the hedged items
will affect profit or loss.
Revenue recognition
IFRS 15 Revenue, requires revenue to be recognised under a ‘five-step’ approach when a customer obtains control of
goods or services in line with the performance obligations identified on the contract. Under IFRS 15, revenue recognition
must reflect the standard’s five-step approach which requires the following:
Identification of the contract with the customer;
Identification of the performance obligations in the contract;
•
•
• Determination of the transaction price;
• Allocation of the transaction price to the performance obligations;
• Recognition of the revenue when (or as) each performance obligation is satisfied.
In accordance with the standard, revenue is recognised, net of discounts, VAT, Insurance Premium Tax and other sales
related taxes, either at the point in time a performance obligation has been satisfied or over time as control of the asset
associated with the performance obligation is transferred to the customer.
For all contracts identified, the Group determines if the arrangement with the customer creates enforceable rights and
obligations. For contracts with multiple components to be delivered, such as the inbound and outbound leg of moving art
exhibitions as well as delivering, handling and administration services, management applies judgement to consider whether
those promised goods and services are:
•
•
•
distinct – to be accounted for as separate performance obligations;
not distinct – to be combined with other promised goods or services until a bundle is identified that is distinct; or
part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to
the customer.
At contract inception the total transaction price is identified, being the amount to which the Group expects to be entitled
and to which it has present enforceable rights under the contract. Once the total transaction price is determined, the Group
allocates this to the identified performance obligations in proportion to their relative standalone selling prices and revenue
is then recognised when (or as) those performance obligations are satisfied.
Discounts are allocated proportionally across all performance obligations in the contract unless directly observable evidence
exists that the discount relates to one or more, but not all, performance obligations.
For each performance obligation, the Group determines if revenue will be recognised over time or at a point in time. For
each performance obligation to be recognised over time, the Group applies a revenue recognition method that faithfully
depicts the Group’s performance in transferring control of the goods or services to the customer. This decision requires
assessment of the nature of the goods or services that the Group has promised to transfer to the customer.
Revenue streams of the Group
The revenues streams of the Group have been analysed and considered in turn.
Retail revenues arising from the sale of goods and recognised at the point of sale
The retail revenues in the Falkland Islands arise from the sale of goods in the retail outlets and the sale of vehicles and parts
at Falklands 4x4, are recognised at the point of sale, which is usually at the till, when the goods are paid for by cash or credit
or debit card. A finance lease receivable arises on the sale of goods when the Group provides finance for the purchases as
the Group is considered under IFRS 16, to be a dealer lessor.
Housing revenue is generally recognised on completion of the single performance obligation of supplying a house, once
the keys are handed over on legal completion. However, larger contracts such as the construction of houses for FIG are
treated as long term construction contracts as detailed below.
ANNUAL REPORT 2023 56
Transportation of art
In the UK, Momart earns revenue from fine art logistical services (transport, installations or de-installations) and storage
services. Revenue is recognised for logistical services completed. Momart classifies this income into either Museum
Exhibitions revenue, which includes the income from UK and International museums, or Gallery Services revenue, which
includes revenue earned from art galleries and auction houses. Inbound and outbound installations are treated as separate
obligations. Revenue is recognised when the service is completed.
Revenues arising from the rendering of services and recognised over a period of time
Storage of art
Storage revenue is recognised according to the time in storage, as reflected in storage agreements.
Long term construction contracts
Revenue from long term construction contracts is recognised under IFRS 15 by the application of the input method on
the basis that the nature of the construction contracts which the Group typically enters into is such that work performed
creates or enhances an asset which the customer controls. Construction contract revenue is measured using the direct
measurement of the goods or services provided to date, including materials and labour. Un-invoiced amounts are presented
as contract assets and amounts invoiced in advance of delivery are presented as contract liabilities.
Where a modification is required, the Group assesses the nature of the modification and whether it represents a
separate performance obligation required to be satisfied by the Group or whether it is a modification to the existing
performance obligation.
Other revenues recognised over time
Other revenues recognised over time, include rental income from the rental property portfolio at FIC, which is recognised
monthly as the properties are occupied, and car hire income which is recognised over the hire period.
The majority of revenues recognised immediately from the rendering of services arise from the PHFC fare income, which
is taken on a daily basis for daily tickets. Season tickets are available, however the revenue earned from these is negligible
as most passengers purchase daily tickets. Quarterly and monthly season tickets are recognised over the life of the ticket
with a balance held in deferred income.
Other revenues arising from the rendering of services and recognised immediately include:
• Agency services provided to cruise or fishing vessels for supplying provisions, trips to and from the airport and medical
evacuations;
Third party port services;
•
• Car maintenance revenue, which generally arises on short term jobs;
• Penguin travel income earned from tourist tours and airport trips, which is recognised on the day of the tour or
•
•
airport trip;
Third party freight revenue, which is recognised when the ship arrives in the Falkland Islands;
Insurance commission earned by FIC for providing insurance services in the Falkland Islands under the terms of an
agency agreement with Caribbean Alliance. The insurance commission is recognised in full on inception of each policy,
offset by a refund liability held within accruals, for the expected refunds over the next year calculated from a review of
the historic refunded premiums.
IFRS 9 Financial instruments
Impairment
Financial assets, which include trade debtors and finance lease receivables, are held initially at cost. IFRS 9 mandates the
use of an expected credit loss model to calculate impairment losses rather than an incurred loss model, and therefore it is
not necessary for a credit event to have occurred before credit losses are recognised.
The Group has elected to measure loss allowances utilising probability-weighted estimates of credit losses for trade
receivables at an amount equal to lifetime expected credit losses.
ANNUAL REPORT 2023
57
Notes to the Financial Statements
CONTINUED
IFRS 9 Financial instruments
Hedging
The Group has one open hedging relationship at 31 March 2023, which has two elements; an interest rate swap and an
embedded 0% interest rate floor. This contract commenced on 9th December 2021, as a result of the banking industry
moving from LIBOR to SONIA as the basis for determining interest rates. This contract replaced the previous interest swap
taken out in July 2019 to hedge the £13,875,000 mortgage. This swap had an initial notional value of £13,875,000, with
interest payable at the difference between 1.1766% and the LIBOR rate up until December 2021 when the LIBOR reference
rate was replaced with a SONIA based equivalent. This interest rate swap notional value decreases at £125,000 per quarter
over ten years until June 2029 when it will expire. The notional value of the swap at 31 March 2023 was £12,000,000
(2022: £12,500,000). The asset held in respect of this swap at the year-end was £1,559,000 (2022: £644,000). The
movement in the year reflects anticipated interest rate rises over the remaining period of the swap.
IFRS 9 introduces three hedge effectiveness requirements:
IFRS 9 requires the existence of an economic relationship between the hedged item and the hedging instrument. There
must be an expectation that the value of the hedging instrument and the value of the hedged item would move in the
opposite direction as a result of the common underlying or hedged risk. As the LIBOR, SONIA and base rates increase, the
interest payable on the loans will increase, and the interest payable on the swaps will fall.
The hedge accounting model is based on a general notion of there being an offset between the changes of the swap
as the hedging instrument and those of the hedged bank loan, both of these balances will be affected by the base rate
movements, so it has been concluded the offset is justifiable. The size of the hedging instrument and the hedged items
must be similar for the hedge to be effective.
IFRS 16 Leases
The Group has applied IFRS 16 in accounting for leases as follows.
At inception of a contract, the Group assesses whether it is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To
assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a
lease in IFRS 16.
IFRS 16 determines whether a contract contains a lease on the basis of whether the customer has the right to control the
use of an identified asset for a period of time in exchange for consideration. This is in contrast to the focus on ‘risks and
rewards’ in IAS 17. The Group applies the definition of a lease and related guidance set out in IFRS 16 to all lease contracts
entered into or changed on or after 1 January 2019 (whether it is a lessor or a lessee in the lease contract).
(a)
As a lessee
The Group:
a) Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position, initially
measured at the present value of the future lease payments;
b) Recognises depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of
profit or loss;
c) Separates the total amount of cash paid into a principal portion (presented within financing activities) and
interest (presented within financing activities) in the consolidated statement of cash flows.
Lease incentives (e.g. rent-free periods) are recognised as part of the measurement of the right-of-use assets and
lease liabilities.
ANNUAL REPORT 2023
58
For short-term leases (lease term of 12 months or less) and leases of low-value assets (which includes tablets and personal
computers, small items of office furniture and telephones), the Group has opted to recognise a lease expense on a straight-
line basis as permitted by IFRS 16. This expense is presented within ‘other expenses’ in profit or loss.
Right-of-use assets are tested for impairment in accordance with IAS 36 as specified by IFRS16.
(b)
As a lessor
In accordance with IFRS 16, leases where the Group is a lessor continue to be classified as either finance leases or
operating leases and are accounted for differently.
When goods are purchased on finance, a finance lease receivable is recorded in FIC and the goods are removed from the
balance sheet when the finance lease agreements are signed and instead, a receivable due from the customer is recorded,
as the title of the vehicle, or other goods, such as furniture, white goods or other electrical items, are deemed to have
passed to the customer at that point.
Finance lease receivables are shown in the balance sheet under current assets to the extent they are due within one year,
and under non-current assets to the extent that they are due after more than one year, and are stated at the value of the net
investment in the agreements. Finance lease income is allocated to accounting periods so as to reflect a constant periodic
rate of return on the Group’s net investment outstanding in respect of the leases.
The FIC rental property agreements which are only ever for a maximum of 12 months, and with titles that will never pass
to the customer, continue to be classified as operating leases. Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. The
rental property portfolio, which is held for leasing out under operating leases is included in investment property at cost less
accumulated depreciation and impairment losses.
Standards and revisions not yet adopted in the year to 31 March 2023
No standards not yet adopted are expected to have any significant impact on the financial statements of the Group
or Company.
2. Segmental Information Analysis
The Group is organised into three operating segments, and information on these segments is reported to the chief operating
decision maker (‘CODM’) for the purposes of resource allocation and assessment of performance. The CODM has been
identified as the executive directors.
The operating segments offer different products and services and are determined by business type: goods and essential
services in the Falkland Islands, the provision of ferry services and art logistics and storage. Segment results, assets and
liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and
intangible assets other than goodwill and any other assets purchased through the acquisition of a business.
ANNUAL REPORT 2023
59
Notes to the Financial Statements
CONTINUED
2. Segmental information analysis CONTINUED
2023
Revenue
Segment operating profit before
non-trading items
Non-trading items
Profit before net financing costs
Finance income
Finance expense
Segment profit before tax
Assets and liabilities
Segment assets
Segment liabilities
Segment net assets
Other segment information
Capital expenditure:
Investment properties
Computer software
Total Capital expenditure
Depreciation and amortisation:
Property, plant and equipment
Investment properties
Computer software
Right of use assets
Total Depreciation and Amortisation
Underlying profit
Segment operating profit before
non-trading items
Interest income
Interest expense
Underlying profit before tax
Ferry
Services
(Portsmouth)
£’000
Art Logistics
and Storage
(UK)
£’000
Unallocated
£’000
General
Trading
(Falkland
Islands)
£’000
29,383
1,955
-
1,955
-
(70)
1,885
3,817
608
-
608
-
(287)
321
19,512
1,450
(79)
1,371
3
(441)
933
35,933
9,519
33,889
(12,954)
(7,341)
(19,364)
22,979
2,178
14,525
10
81
1,206
1,192
210
-
39
1,441
-
-
205
317
-
-
101
418
539
-
34
573
256
-
10
515
781
1,955
608
1,450
-
(70)
1,885
-
(287)
321
3
(441)
1,012
Total
£’000
52,712
4,013
(79)
3,934
910
(798)
4,046
84,218
(40,244)
43,974
1,859
10
115
1,984
1,765
210
10
655
2,640
4,013
3
(798)
3,218
-
-
-
-
907
-
907
4,877
(585)
4,292
-
-
-
-
-
-
-
-
-
-
-
-
-
Property, plant and equipment
1,115
205
ANNUAL REPORT 2023 Ferry
Services
(Portsmouth)
£’000
Art Logistics
and Storage
(UK)
£’000
Unallocated
£’000
2022
Revenue
Segment operating profit before
non-trading items
Non-trading items
Profit / (loss) before net financing costs
Finance expense
Segment profit / (loss) before tax
Assets and liabilities
Segment assets
Segment liabilities
Segment net assets
Other segment information
Capital expenditure:
Property, plant and equipment
Investment properties
Computer software
Total Capital expenditure
Capital expenditure: cash
Capital expenditure: non-cash
Total Capital expenditure
Depreciation and amortisation:
Property, plant and equipment
Investment properties
Computer software
Right of use assets
General
Trading
(Falkland
Islands)
£’000
21,655
1,835
-
1,835
(56)
1,779
31,401
(9,582)
21,819
1,129
1,238
67
2,434
2,434
-
2,434
834
197
-
8
Total Depreciation and Amortisa-tion
1,039
3,066
155
-
155
(276)
(121)
15,598
1,090
(41)
1,049
(464)
585
9,478
32,275
(7,788)
(19,045)
1,690
13,230
52
-
-
52
52
-
52
316
-
-
256
572
258
-
-
258
152
106
258
423
-
21
505
949
Underlying profit / (loss)
Segment operating profit before
non-trading items
Interest expense
Underlying profit / (loss) before tax
1,835
(56)
1,779
155
1,090
(276)
(121)
(464)
626
-
-
(259)
(259)
704
445
5,065
(979)
4,086
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60
Total
£’000
40,319
3,080
(300)
2,780
(92)
1,984
78,219
(37,394)
40,825
1,439
1,238
67
2,744
2,638
106
2,744
1,573
197
21
769
2,560
3,080
(796)
2,284
ANNUAL REPORT 2023 61
Notes to the Financial Statements
CONTINUED
2. Segmental information analysis CONTINUED
The £4,877,000 (2022: £5,065,000) unallocated assets above include £3,307,000 (2022: £4,376,000) of cash and
£1,559,000 (2022: £644,000) of derivative financial instruments and £11,000 (2022: £45,000) of trade and other receivables
held in FIH group plc. (Note 19)
The £585,000 (2022: £979,000) unallocated liabilities above consist of accruals and tax balances held within FIH group plc.
3. Geographical analysis
The tables below analyse revenue and other information by geography:
2023
Revenue (by source)
Assets and Liabilities:
United
Kingdom
£’000
Falkland
Islands
£’000
Total
£’000
23,329
29,383
52,712
Non-current segment assets, excluding deferred tax
36,518
16,956
53,474
Capital expenditure: cash
778
1,206
1,984
2022
Revenue (by source)
Assets and Liabilities:
United
Kingdom
£’000
Falkland
Islands
£’000
Total
£’000
18,664
21,655
40,319
Non-current segment assets, excluding deferred tax*
35,709
17,074
52,783
Capital expenditure: cash
204
2,434
2,638
* The amounts disclosed in relation to segment assets have been restated as detailed in note 1 to the financial statements,
resulting in a reduction of £0.4 million in carrying values.
ANNUAL REPORT 2023 62
Sale of goods
recognised at
a point in time
£’000
Rendering
of services
recognised at
a point in time
£’000
Rendering
of services
provided over
a period
of time
£’000
Total
Revenue
£’000
9,937
2,275
1,943
-
-
14,155
-
-
14,155
-
294
-
2,423
-
2,717
3,817
16,794
23,328
-
485
9,937
3,054
10,204
12,147
827
995
3,250
995
12,511
29,383
-
3,817
2,718
15,229
19,512
52,712
Sale of goods
recognised at
a point in time
£’000
Rendering
of services
recognised at
a point in time
£’000
Rendering
of services
provided over
a period
of time
£’000
Total
Revenue
£’000
9,666
2,770
5,797
2,545
877
-
364
4,298
868
877
6,407
21,655
-
2,373
8,780
3,066
15,598
40,319
9,666
2,034
1,499
-
-
13,199
-
-
13,199
-
372
-
1,677
-
2,049
3,066
13,225
18,340
4. Revenue
2023
Falkland Islands
Retail sales
Falklands 4x4 sales
FBS (housing and construction)
Support Services
Rental property income
FIC (Falkland Islands)
PHFC (Portsmouth)
Art logistics and storage
Total Revenue
2022
Falkland Islands
Retail sales
Falklands 4x4 sales
FBS (housing and construction)
Support Services
Rental property income
FIC (Falkland Islands)
PHFC (Portsmouth)
Art logistics and storage*
Total Revenue
* The amount disclosed for rendering of services recognised over a period of time relating to the prior year for the Art
and Logistics Business has been restated to exclude £13.2 million which should have been included within rendering of
services recognised at a point in time. The total recognised for the year has not changed.
ANNUAL REPORT 2023 63
Notes to the Financial Statements
CONTINUED
5. Non-trading items
Profit before tax as reported
Non-trading items:
Restructuring costs
Movement in fair value of non-effective portion of derivative financial instruments
Underlying profit before tax
2023
£’000
4,046
79
(907)
3,218
2022
£’000
2,688
300
(704)
2,284
Restructuring costs comprise employee redundancy costs in the current year and people-related costs, including employee
redundancies and compensation payable to the former Chief Executive, in the prior year.
6. Expenses and auditor’s remuneration
The following expenses / (income) have been included in the profit and loss:
Direct operating expenses of rental properties
Depreciation
Amortisation of computer software
Foreign currency loss
Expected credit loss on trade and other receiva-bles
Cost of inventories recognised as an expense
COVID-19 and other government funding
Auditor’s remuneration
Audit of these financial statements
Audit of subsidiaries' financial statements pursuant to legislation
Other assurance services
Total auditor's remuneration
2023
£’000
463
2,627
10
26
13
14,392
-
2023
£’000
195
102
-
297
2022
£’000
465
2,413
21
13
114
9,868
(500)
2022
£’000
66
179
5
250
Additional items of expenditure not covered above or within staff costs (note 7) which are recognised within operating profit
for the year include legal and professional fees, insurance and recruitment costs.
ANNUAL REPORT 2023
64
7. Staff numbers and cost
The average number of persons employed by the Group (including directors) during the year, analysed by category,
was as follows:
PHFC
Falkland Islands:
in Stanley
in UK
Art logistics & storage
Head office
Total average staff numbers
Number of employees
Group
Number of employees
Company
2023
2022
2023
2022
27
227
6
114
6
380
27
208
6
102
7
350
-
-
-
8
8
-
-
-
-
7
7
The aggregate payroll cost of these persons was as follows:
Wages and salaries
Share-based payments (see note 24)
Social security costs
Contributions to defined contribution plans (see note 23)
Furlough income
Total employment costs
Group
Company
2023
£’000
2022
£’000
13,929
12,682
2023
£’000
780
2022
£’000
769
41
986
535
-
45
821
505
(210)
46
86
14
-
45
90
5
-
15,491
13,843
926
909
In the previous year, the Group made use of support schemes from the UK Government to partially mitigate the loss of profit
caused by the impact of COVID-19. The Coronavirus Job Retention Scheme (“CJRS”), the UK Government’s support
measure relating to employment, provided grants to cover the cost of employees who were furloughed. Amounts received
under this scheme are classified as government grants and are accounted for in accordance with IAS 20 Government
Grants. There were no grants in the year ended 31 March 2023. Such grants totalling £210,000 for the year ended 31
March 2022 were recognised in the Income Statement in the period in which the associated costs for which the grants are
intended to compensate were incurred, and are presented as an offset against those associated costs.
Details of audited directors’ remuneration are provided in the Directors’ Report, which forms part of these audited financial
statements, under the heading ‘Details of Directors’ Remuneration and Emoluments’.
ANNUAL REPORT 2023
65
Notes to the Financial Statements
CONTINUED
8. Finance income and expense
Movement in non-effective portion of fair value of derivative financial instruments
Bank interest receivable
Total finance income
Interest payable on bank loans
Net interest cost on the FIC defined benefit pension scheme liability
Lease liabilities finance charge
Total finance expense
Net finance income / (expense)
9. Taxation
Recognised in the income statement
Current tax expense
Current year
Adjustments for prior years
Current tax expense*
Deferred tax expense
Origination and reversal of temporary differences*
Change in UK tax rate to 25%
Adjustments for prior years
Deferred tax expense (see note 17)*
Total tax expense*
Reconciliation of the effective tax rate
Profit on ordinary activities before tax
Tax using the UK corporation tax rate of 19% (2021: 19%)
Expenses not deductible for tax purposes
Additional capital allowances – super deduction
Effect of increase in rate of deferred tax
Effect of higher tax rate overseas
Adjustments to tax charge in respect of previous periods
Total tax expense*
2023
£’000
907
3
910
(424)
(70)
(304)
(798)
112
2022
£’000
704
-
704
(436)
(56)
(304)
(796)
(92)
2023
£’000
2022
£’000
579
(99)
480
413
-
31
444
924
2023
£’000
4,046
769
85
(37)
155
20
(68)
924
532
(25)
507
123
523
50
696
1,203
2022
£’000
2,688
511
84
(7)
555
35
25
1,203
* Prior year amounts relating to deferred tax have been restated to align the tax impact with the changes made to fair value
movements of the derivative financial instrument as detailed in note 1 to the financial statements.
ANNUAL REPORT 2023 66
Tax recognised directly and other comprehensive income
Deferred tax on effective portion of changes in fair value
Movement on deferred tax asset relating to the pension scheme
Deferred tax on share options and other financial liabilities
Deferred tax expense recognised directly in other comprehensive income
In the UK, deferred tax has been calculated at 25% (2022: 25%).
2023
£’000
-
176
3
179
2022
£’000
40
62
(58)
44
The deferred tax assets and liabilities in FIC have been calculated at the Falkland Islands’ tax rate of 26% (2022: 26%).
10. Earnings per share
The calculation of basic earnings per share is based on profits on ordinary activities after taxation, and the weighted
average number of shares in issue in the period.
The calculation of diluted earnings per share is based on profits on ordinary activities after taxation and the weighted
average number of shares in issue in the period, adjusted to assume the full issue of share options outstanding, to the
extent that they are dilutive.
Profit on ordinary activities after taxation
Average number of shares in issue
Effect of share options
Diluted weighted average number of shares
Basic earnings per share
Diluted earnings per share
2023
£’000
3,122
2022
£’000
1,485
2023
Number
2022
Number
12,519,900
12,519,900
-
-
12,519,900
12,519,900
2023
24.9p
24.9p
2022
11.9p
11.9p
To provide a comparison of earnings per share on underlying performance, the calculation below sets out basic and diluted
earnings per share based on underlying profits.
ANNUAL REPORT 2023 67
Notes to the Financial Statements
CONTINUED
10. Earnings per share CONTINUED
Earnings per share on underlying profit
Underlying profit before tax (see note 5)
Underlying taxation
Underlying profit
Effective tax rate
Weighted average number of shares in issue (from above)
Diluted weighted average number of shares (from above)
Basic earnings per share on underlying profit
Diluted earnings per share on underlying profit
11. Intangible assets
Cost:
At 1 Apr 2021 and 31 March 2022
Additions
Transfer from investment property
At 31 March 2022
Accumulated amortisation and impairment:
At 1 Apr 2021
Amortisation
At 31 March 2022
Amortisation
At 31 March 2023
Net book value:
At 1 April 2021
At 31 March 2022
At 31 March 2023
2023
£’000
3,218
(705)
2,513
21.9%
2022
£’000
2,284
(1,094)
1,190
47.9%
12,519,900
12,519,900
12,519,900
12,519,900
20.1p
20.1p
9.5p
9.5p
Computer
Software
£’000
Brand name
£’000
Goodwill
£’000
Total
£’000
631
115
42
788
533
21
554
10
564
31
77
224
2,823
11,576
15,030
-
-
-
-
115
42
2,823
11,576
15,187
785
-
785
-
785
2,038
2,038
2,038
9,462
10,780
-
21
9,462
10,801
-
10
9,462
10,811
2,114
2,114
2,114
4,183
4,229
4,376
Amortisation and impairment charges are recognised in operating expenses in the income statement. The Momart brand
name has a carrying value of £2,038,000 and is considered to be of future economic value to the Group with an estimated
indefinite useful economic life. It is reviewed annually for impairment as part of the Art Logistics and Storage review.
ANNUAL REPORT 2023 68
Goodwill
Goodwill is allocated to the Group’s Cash Generating Units (CGUs) which principally comprise its business segments.
A segment level summary of goodwill for each cash-generating-unit is shown below:
Goodwill at 1 April 2021
Goodwill at 31 March 2022
Goodwill at 31 March 2023
Impairment
Art Logistics and
Storage
£’000
2,077
2,077
2,077
Falkland
Islands
£’000
37
37
37
Total
£’000
2,114
2,114
2,114
The Group tests material goodwill and indefinite lived intangible assets annually for impairment or more frequently if there
are indications that goodwill and/or indefinite life assets might be impaired. An impairment test is a comparison of the
carrying value of the assets of a CGU to their recoverable amounts based on the higher of a value-in-use calculation and
fair value less costs to sell. Goodwill is impaired when the recoverable amount is less than the carrying value.
The Art Logistics and Storage CGU is tested for impairment annually because the only material goodwill and indefinite life
assets relate to this CGU. An impairment review of the Art Logistics and Storage CGU was performed and no impairment
charge was deemed necessary. The recoverable amount for this assessment was determined using the fair value less
costs to sell for the Art Logistics and Storage CGU. This was underpinned by an independent valuation of the art storage
warehouses in East London, which indicates a fair value well in excess of the £24.7 million carrying value of the Art Logistics
and Storage CGU.
ANNUAL REPORT 2023 69
Notes to the Financial Statements
CONTINUED
12. Property, plant and equipment
Right
to use
assets
£’000
Freehold
land &
buildings
£’000
Group
Long
leasehold
land and
buildings
£’000
Vehicles,
plant and
equipment
£’000
Ships
£’000
9,633
29,554
1,009
6,877
232
(82)
109
-
53
(3)
3
-
9,586
1,168
(396)
Total
£’000
56,659
1,565
(481)
9,783
29,663
1,059
6,880
10,358
57,743
-
561
-
(120)
113
-
(54)
-
57
-
(49)
-
150
1,539
1,859
-
-
-
-
(585)
-
561
(688)
(120)
Cost:
At 1 April 2021
Additions in year
Disposals
At 31 March 2022*
Additions in year
Additions (non-cash)
Disposals
Disposals (non-cash)
At 31 March 2023
10,224
29,722
1,067
7,030
11,312
59,355
Accumulated depreciation:
At 1 April 2021
Charge for the year
Disposals
At 31 March 2022
Charge for the year
Disposals
Disposals (non-cash)
At 31 March 2023
Net book value:
At 1 April 2021
At 31 March 2022*
At 31 March 2023
3,084
4,403
769
(75)
371
-
3,778
4,774
655
-
(105)
4,328
6,549
6,005
5,896
512
(43)
-
5,243
23,928
24,889
24,479
370
160
(3)
527
24
(49)
-
502
1,862
532
565
2,790
6,450
17,097
243
-
3,033
246
-
799
(336)
2,342
(414)
6,913
19,025
983
(570)
-
2,420
(662)
(105)
3,279
7,326
20,678
4,087
3,847
3,751
3,136
3,445
3,986
39,562
38,718
38,677
* As detailed in note 1 to the financial statements, comparative numbers for right of use assets have been restated,
resulting in a reduction in net book value of £0.4 million at 31 March 2022. Certain assets previously disclosed within long
leasehold land and buildings have been reclassified to freehold land and buildings to more accurately reflect the nature of
the assets. As a result, the cost and accumulated depreciation of freehold land and buildings at 31 March 2022 increased
by 1.9 million and £0.7 million respectively, with a corresponding reduction in long leasehold land and buildings. There was
no impact on total cost, cumulative depreciation or net book value.
ANNUAL REPORT 2023 12. Property, plant and equipment CONTINUED
Right to use assets
Group
Short leasehold
lease
£’000
Long leasehold
Pontoon lease
£’000
Momart Trucks
£’000
Office
Equipment
£’000
Cost:
At 1 April 2021*
Additions in year
Disposals
At 31 March 2022*
Additions in year
Disposals (non-cash)
At 31 March 2023
Accumulated depreciation:
At 1 April 2021
Charge for the year
Disposals
At 31 March 2022*
Charge for the year
Disposals (non-cash)
At 31 March 2023
Net book value:
At 1 April 2021
At 31 March 2022*
At 31 March 2023
3,136
5,090
1,389
105
-
126
-
1
(82)
3,241
5,216
1,308
13
-
548
-
3,789
1,669
303
-
(120)
5,109
971
256
-
1,972
1,227
60
(40)
75
(65)
1,992
1,237
1,467
1,269
1,797
4,119
3,989
3,872
-
1,308
429
209
(75)
563
519
-
519
960
745
226
18
-
-
18
-
-
18
15
1
-
16
1
-
17
3
2
1
70
Total
£’000
9,633
232
(82)
9,783
561
(120)
10,224
3,084
769
(75)
3,778
655
(105)
4,328
6,549
6,005
5,896
* As detailed in note 1 to the financial statements, comparative numbers for right of use assets have been restated,
resulting in a reduction in net book value of £0.4 million at 31 March 2022.
No property, plant or equipment was financed by hire purchase loans in the year to 31 March 2023.
The Company has no tangible fixed assets, other than the investment property purchased in December 2018, which is
included within Investment Property (note 13).
ANNUAL REPORT 2023 71
Notes to the Financial Statements
CONTINUED
13. Investment properties
Residential and
commercial
property
£’000
Group
Freehold land
£’000
Cost:
At 1 April 2021
Additions in year
At 31 March 2022
Additions in year
Transfer to intangibles
At 31 March 2023
Accumulated depreciation:
At 1 April 2021
Charge for the year
At 31 March 2022
Charge for the year
At 31 March 2023
Net book value:
At 1 April 2021
At 31 March 2022
At 31 March 2023
7,328
1,238
8,566
10
(42)
8,534
1,036
197
1,233
210
1,443
6,292
7,333
7,091
Total
£’000
8,159
1,238
9,397
10
(42)
831
-
831
-
-
831
9,365
-
-
-
-
-
831
831
831
1,036
197
1,233
210
1,443
7,123
8,164
7,922
The investment properties, held at cost, comprise land, plus residential and commercial property held for rental in the
Falkland Islands.
ANNUAL REPORT 2023 13. Investment properties CONTINUED
Estimated Fair Value
Estimated fair value:
Freehold land
Properties available for rent
Properties under construction
At 31 March
Uplift on net book value:
Freehold land
Properties available for rent
At 31 March
Number of rental properties
Available for rent
Under construction
72
Group
2023
£’000
2,177
10,420
43
12,640
1,346
3,286
4,632
85
-
2022
£’000
2,177
10,139
173
12,489
1,346
2,979
4,325
83
2
A level 3 valuation technique has been applied, using a market approach to value these properties; the properties have
been valued based on their expected market value by the directors.
Assets under construction
At 31 March 2023, improvements to the FIC jetty in Stanley were included in investment property assets under construction
(2022: 2 housing units) with a total cost to date of £43,000 (2022: £173,000).
Company
Cost:
31 March 2021, 31 March 2022 and 1 April 2023
Accumulated depreciation:
At 31 March 2021
Charge for the year
At 31 March 2022
Charge for the year
At 31 March 2023
Net book value:
At 1 April 2021
At 31 March 2022
At 31 March 2023
Commercial property
£’000
19,642
478
208
686
205
891
19,164
18,956
18,751
The investment property in the Company consists of the five warehouses leased to Momart, the Group’s art handling
subsidiary, which were purchased in December 2018.
The directors have reviewed the market value of the Leyton warehouses and have used valuation reports prepared
by Colliers International Property Consultants Limited. The directors consider that the market value of the property is
significantly higher than book value. Further detail is given in note 11.
ANNUAL REPORT 2023 73
Notes to the Financial Statements
CONTINUED
14. Investment in subsidiaries
Country of
incorporation
Class of shares held
Ownership at
31 March 2023
Ownership at
31 March 2022
The Falkland Islands Company Limited (1)
UK
Ordinary shares of £1
The Falkland Islands Trading Company Limited (1)
UK
Ordinary shares of £1
Falkland Islands Shipping Limited (2) (6)
Falkland Islands
Ordinary shares of £1
Erebus Limited (2) (6) (7)
Falkland Islands
Ordinary shares of £1
Preference shares of £10
South Atlantic Support Services Limited (3) (6) (7)
Falkland Islands
Ordinary shares of £1
Paget Limited (2) (6) (7)
Falkland Islands
Ordinary shares of £1
Preference shares of £1
The Portsmouth Harbour Ferry Company Limited (4)
Portsea Harbour Company Limited (4) (6)
Clarence Marine Engineering Limited (4) (6)
Gosport Ferry Limited (4) (6)
Portsmouth Harbour Waterbus Company Limited (4) (6) (7)
Momart International Limited (5) (7)
Momart Limited (5) (6)
Dadart Limited (5) (6) (7)
UK
UK
UK
UK
UK
UK
UK
UK
Ordinary shares of £1
Ordinary shares of £1
Ordinary shares of £1
Ordinary shares of £1
Ordinary shares of £1
Ordinary shares of £1
Ordinary shares of £1
Ordinary shares of £1
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(1) The registered office for these companies is Kenburgh Court, 133-137 South Street, Bishop’s Stortford, Hertfordshire
CM23 3HX.
(2) The registered office for these companies is 5 Crozier Place, Stanley, Falkland Islands FIQQ 1ZZ.
(3) South Atlantic Support Services Limited’s registered office is 56 John Street, Stanley, Falkland Islands FIQQ 1ZZ.
(4) The registered office for these companies is South Street, Gosport, Hampshire, PO12 1EP.
(5) The registered office for these companies is Exchange Tower, 6th Floor, 2 Harbour Exchange Square, London E14 9GE.
(6) These investments are not held by the Company but are indirect investments held through a subsidiary of the Company.
(7) These investments have all been dormant for the current and prior year.
At 1 April
Share based payments charge capitalised into subsidiaries
At 31 March*
Company
2023
£’000
26,762
(5)
26,757
2022
£’000
26,737
25
26,762
* As detailed in note 1 to the financial statements, the carrying value of investments have been restated, resulting in an
increase of £2.7 million at 31 March 2022.
The amounts disclosed are net of a provision for impairment of £18 million (2022: £18 million).
ANNUAL REPORT 2023 74
15. Investment in Joint Ventures
The Group has one joint venture (South Atlantic Construction Company Limited, “SAtCO”), which was set up in June
2012 in the Falkland Islands, with Trant Construction to bid for the larger infrastructure contracts which were expected to
be generated by oil activity. Both Trant Construction and the FIC contributed £50,000 of ordinary share capital. SAtCO is
registered and operates in the Falkland Islands. The net assets of SAtCO are shown below:
Joint Venture’s balance sheet
Current assets
Liabilities due in less than one year
Net assets of SAtCO
Group share of net assets
2023
£’000
519
(1)
518
259
2022
£’000
519
(1)
518
259
There were no recognised gains or losses for the years ended 31 March 2023 (2022: none).
The current assets balances above include £16,000 of cash (2022: £16,000), £5,000 of other debtors (2022: £5,000) and
£498,000 (2022: £498,000) of loans due from SAtCO’s parent companies.
SAtCO had no contingent liabilities or capital commitments as at 31 March 2023 or 31 March 2022 and the Group had no
contingent liabilities or commitments in respect of its joint venture at 31 March 2023 or 31 March 2022.
SATCO’s registered office is 56 John Street, Stanley, Falkland Islands FIQQ 1ZZ
16. Finance leases receivable
As lessor, FIC has sold assets to customers on finance lease agreements. The present value of the lease payments,
together with any unguaranteed residual value, is recognised as a receivable, net of allowances for expected bad debt
losses.
The difference between the gross receivable and the present value of future lease payments, is recognised as unearned
lease income. Lease income is recognised in revenue over the term of the lease using the sum of digits method so as to
give a constant rate of return on the net investment in the leases. Lease receivables are reviewed regularly to identify any
impairment.
Lease receivables arise on the sale of vehicles and consumer goods, such as furniture and electrical items, by FIC.
No contingent rents have been recognised as income in the period. No residual values accrue to the benefit of the lessor.
Non-Current: Lease debtors due after more than one year
Current: Lease debtors due within one year
Total lease debtors
Group
2023
£’000
681
397
1,078
2022
£’000
725
511
1,236
ANNUAL REPORT 2023 75
Notes to the Financial Statements
CONTINUED
The difference between the gross investment in the finance lease receivables and the present value of future lease payments
due represents unearned lease income of £375,000 (2022: £310,000). The cost of assets acquired for the purpose of
renting out under hire purchase agreements by the Group during the year amounted to £629,000 (2022: £960,000).
The total cash received during the year in respect of hire purchase agreements was £923,000 (2022: £985,000).
Gross investment in finance lease receivables
Unearned lease income
Bad debt provision against hire purchase leases
Present value of future lease receipts
17. Deferred tax assets and liabilities
Recognised deferred tax assets and (liabilities)
Property, plant & equipment
Intangible assets
Inventories (unrealised intragroup profits)
Other financial liabilities
Derivative financial instruments
Share-based payments
Total net deferred tax liabilities
Deferred tax asset arising on the defined benefit pension liabili-ties
Net tax liabilities
Group
2023
£’000
1,484
(375)
(31)
1,078
Group
2023
£’000
(3,874)
(509)
90
54
(44)
68
(4,215)
482
(3,733)
2022
£’000
1,571
(310)
(25)
1,236
2022
£’000
(3,537)
(509)
81
104
(27)
108
(3,780)
666
(3,114)
ANNUAL REPORT 2023 76
17. Deferred tax assets and liabilities CONTINUED
The deferred tax asset on the defined benefit pension scheme (see note 23) arises under the Falkland Islands tax regime
and has been presented on the face of the consolidated balance sheet as a non-current asset as it is expected to be
realised over a relatively long period of time. All other deferred tax assets are shown net against the non-current deferred
tax liability shown in the balance sheet.
Derivative financial liabilities
Other temporary differences
Net tax asset / (liability)
Movement in deferred tax assets / (liabilities) in the year:
Property, plant & equipment
Intangible assets
Inventories (unrealised intragroup profits)
Other financial liabilities
Derivative financial instruments
Share-based payments
Pension
Deferred tax movements
Unrecognised deferred tax assets
Company
2023
£’000
(44)
(41)
(85)
2022
£’000
(27)
15
(12)
Group
Recognised in
income
£’000
Recognised in
equity
£’000
31 March 2023
£’000
(337)
9
(47)
(61)
-
(8)
-
-
-
(3)
44
(40)
(176)
(175)
(3,874)
(509)
90
54
(44)
68
482
(3,733)
1 April 2022
£’000
(3,537)
(509)
81
104
(27)
108
666
(3,114)
(444)
Deferred tax assets of £141,000 (2022: £44,000) in respect of capital losses have not been recognised as it is not
considered probable that there will be suitable chargeable gains in the foreseeable future from which the underlying capital
losses will reverse.
Movement in deferred tax assets / (liabilities) in the year:
Derivative financial liabilities instruments
Other temporary differences
Deferred tax asset movements
Company
1 April 2022
£’000
Recognised in
income
£’000
Recognised in
equity
£’000
31 March 2023
£’000
(27)
15
(12)
(61)
(16)
(77)
44
(40)
(4)
(44)
(41)
(85)
ANNUAL REPORT 2023 77
Notes to the Financial Statements
CONTINUED
Movement in deferred tax assets / (liabilities) in the prior year:
Property, plant & equipment
Intangible assets
Inventories
Other financial liabilities
Derivative financial instruments
Share-based payments
Pension
Deferred tax movements
Group
Recognised in
income
£’000
Recognised in
equity
£’000
31 March 2022
£’000
1 April 2021
£’000
(2,938)
(387)
62
66
44
40
739
(599)
(122)
19
31
(31)
17
(11)
(2,374)
(696)
-
-
-
7
(40)
51
(62)
(44)
(3,537)
(509)
81
104
(27)
108
666
(3,114)
Movement in deferred tax asset in the prior year:
Derivative financial instruments
Other temporary differences
Deferred tax asset movements
Company
1 April 2021
£’000
Recognised in
income
£’000
Recognised in
equity
£’000
31 March 2022
£’000
44
-
44
(31)
15
(16)
(40)
-
(40)
(27)
15
(12)
An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May
2021. It has been assumed that all material UK deferred tax elements will reverse in 2023 or later and hence all elements
are calculated at 25%. Deferred tax assets and liabilities relating to the Falkland Islands have been recognised at a
rate of 26%.
18. Inventories
Work in progress
Goods in transit
Goods held for resale and raw materials
Total Inventories
The Company has no inventories.
Group
2023
£’000
225
605
6,046
6,876
2022
£’000
1,033
284
5,423
6,740
ANNUAL REPORT 2023 19. Trade and other receivables
Non-Current
Rental deposits
Amount owed by subsidiary undertakings
Total trade and other receivables
Current
Trade and other receivables
Rental deposits
Prepayments
Accrued income
Contract asset
78
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
-
-
-
44
-
44
-
10,257
10,257
-
10,057
10,057
Group
Company
2023
£’000
7,203
116
1,533
433
904
2022
£’000
5,362
88
1,515
982
-
2023
£’000
2022
£’000
-
-
11
-
-
11
-
-
45
-
-
45
Total trade and other receivables
10,189
7,947
Amounts owed by subsidiary undertakings to the Company are not secured and interest free with no fixed repayment date.
The accrued income relates to contracts where the work has been completed but had not been billed at the balance sheet
date. No allowance for expected credit losses was recognised in respect of accrued income as the impact was assessed
as being immaterial. The only significant changes in the accrued income balance during the year related to the recognition
of revenue for work performed and the transfer of billed amounts to trade receivables.
20. Cash and cash equivalents
Cash and cash equivalents
Bank loans
Net debt
Interest rate swap
Lease liabilities*
Derivatives and lease liabilities
2022
£’000
9,572
(14,183)
(4,611)
644
(6,536)
(5,892)
Net debt after derivatives and lease liabilities
at 31 March
(10,503)
5,528
Movement in financial liabilities* above
Group
Cash Flows
Interest
Other non-
cash Changes
3,254
1,352
4,606
-
922
922
-
(424)
(424)
(304)
(304)
(728)
(26)
-
(26)
915
(561)
354
328
2023
£’000
12,800
(13,255)
(455)
1,559
(6,479)
(4,920)
(5,375)
Financing liabilities**
(20,075)
2,274
(728)
354
(18,175)
ANNUAL REPORT 2023 79
Notes to the Financial Statements
CONTINUED
Cash and cash equivalents
Bank loans
Net debt
Interest rate swap
Net debt after derivatives at 31 March
Movement in financial liabilities above
Company
Cash Flows
Interest
Other non-
cash Changes
(1,069)
890
(179)
-
(179)
(368)
(368)
-
(368)
-
-
-
915
915
2022
£’000
4,376
(12,668)
(8,292)
644
(7,648)
2023
£’000
3,307
(12,146)
(8,839)
1,559
(7,280)
Financing liabilities**
(12,024)
890
(368)
915
(10,587)
* As detailed in note 1 to the financial statements, lease liabilities have been restated, resulting in a reduction of £0.6 million
at 31 March 2022.
**The total for financing liabilities was not presented in the 2022 annual report and accounts as required by IAS 7 and the
derivative instrument was also omitted from the disclosure. This has been corrected by disclosing the total for financing
liabilities and including the opening balance of the derivative of £644,000, being the interest rate swap as at 31 March
2022. Other non-cash changes comprise, foreign exchange movements, fair value movements and new lease liabilities.
21. Interest-bearing loans and borrowings
This note provides information about the contractual terms of the interest-bearing loans and borrowings owed by the
Group, which are stated at amortised cost. Information on the maturity of interest-bearing loans and lease liabilities and
exposure to interest rate and foreign currency risk is disclosed in note 26.
Non-current liabilities
Secured bank loans
Lease liabilities*
Total non-current interest-bearing loans and lease liabilities
Current liabilities
Secured bank loans
Lease liabilities*
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
12,316
13,235
11,617
12,139
5,898
18,214
5,948
19,183
-
-
11,617
12,139
939
581
948
588
529
-
529
529
-
529
Total current interest-bearing loans and lease liabilities
1,520
1,536
Total liabilities
Secured bank loans
Lease liabilities*
Total interest-bearing loans and lease liabilities
13,255
14,183
12,146
12,668
6,479
19,734
6,536
20,719
-
-
12,146
12,668
ANNUAL REPORT 2023 80
21. Interest-bearing loans and borrowings CONTINUED
Lease liabilities
Less than one year
Between one and two years
Between two and five years
More than five years
Total*
Future minimum lease
payments
Interest
Present value of minimum
lease payments
2023
£’000
868
779
1,689
9,053
2022
£’000
874
709
1,616
9,564
2023
£’000
(287)
(269)
(725)
2022
£’000
(287)
(269)
(733)
(4,629)
(4,938)
12,389
12,763
(5,910)
(6,227)
2023
£’000
581
510
964
4,424
6,479
2022
£’000
587
440
883
4,626
6,536
* As detailed in note 1 to the financial statements, lease liabilities have been restated, resulting in a reduction of £0.6 million
at 31 March 2022.
22. Trade and other payables
Current:
Trade payables
Contract liability
Amounts owed to subsidiary undertakings
Loan from joint venture
Other creditors, including taxation and social secu-rity
Accruals
Deferred income
Total trade and other payables
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
6,322
4,111
-
-
249
2,835
3,950
362
13,718
254
-
249
2,080
2,962
314
9,970
6
-
29
-
5,269
5,085
-
116
548
-
-
120
615
-
5,939
5,849
Amounts owed to subsidiary undertakings by the company are not secured, interest free and repayable on demand.
23. Employee benefits: pension plans
Defined contribution schemes
The Group operates defined contribution schemes at PHFC and Momart and current FIC employees are enrolled in the
Falkland Islands Pension Scheme (“FIPS”). The assets of all these schemes are held separately from those of the Group in
independently administered funds.
The pension cost charge for the year represents contributions payable by the Group to the schemes and amounted
to £535,000 (2022: £505,000). The Group anticipates paying contributions amounting to £567,000 during the year
ending 31 March 2024. There were outstanding contributions of £44,000 (2022: £11,000) due to pension schemes at 31
March 2023.
ANNUAL REPORT 2023 81
Notes to the Financial Statements
CONTINUED
The Falkland Islands Company Limited Scheme
FIC operates a defined benefit pension scheme for certain former employees. This scheme was closed to new members in
1988 and to further accrual on 31 March 2007. The scheme has no assets and payments to pensioners are made out of
operating cash flows. The expected contributions for the year ended 31 March 2024 are £102,010. During the year ended
31 March 2023, 10 pensioners (2022: 11) received benefits from this scheme, and there are three deferred members at 31
March 2023 (2022: three). Benefits are payable on retirement at the normal retirement age. The weighted average duration
of the expected benefit payments from the Scheme is around 12 years (2022: 14 years).
An actuarial report for IAS 19 purposes as at 31 March 2023 was prepared by a qualified independent actuary, Lane Clark
and Peacock LLP. The major assumptions used in the valuation were:
Rate of increase in pensions in payment and deferred pensions
Discount rate applied to scheme liabilities
Inflation assumption
Average longevity at age 65 for male current and deferred pensioners
(years) at accounting date
Average longevity at age 65 for male current and deferred pensioners
(years) 20 years after accounting date
2023
2.5%
4.8%
22.0
24.4
2022
2.7%
2.8%
3.9%
22.0
23.4
The assumptions used by the actuary are chosen from a range of possible actuarial assumptions which, due to the
timescale covered, may not necessarily be borne out in practice. Assumptions relating to life expectancy have been based
on UK mortality data on the basis that this is the best available data for the Falkland Islands.
Sensitivity Analysis
The calculation of the defined benefit liability is sensitive to the assumptions set out above. The following table summarises
how the impact of the defined benefit liability at 31 March 2023 would have increased / (decreased) as a result of a change
in the respective assumptions by 1.0%.
Discount rate
Inflation assumption
Life expectancy
Effect on obligation 2023
-1% pa
£’000
240
(10)
+1% pa
£’000
(200)
10
Effect on obligation 2023
-1 year
£’000
(80)
+1 year
£’000
80
These sensitivities have been calculated to show the movement in the defined benefit obligation in isolation, and assume
no other changes in market conditions at the accounting date.
ANNUAL REPORT 2023 82
23. Employee benefits: pension plans CONTINUED
Scheme liabilities
The present values of the scheme’s liabilities, which are derived from cash flow projections over long periods and thus
inherently uncertain, were:
Value at
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
Present value of scheme liabilities
(2,772)
(2,604)
(2,842)
(2,562)
(1,978)
Related deferred tax assets
721
677
677
666
482
Net pension liability
(2,051)
(1,927)
(2,165)
(1,896)
(1,496)
Movement in deficit during the year:
Deficit in scheme at beginning of the year
Pensions paid
Other finance cost
Re-measurement of the defined benefit pension liability
2023
£’000
(2,562)
101
(70)
553
2022
£’000
(2,842)
99
(56)
237
Deficit in scheme at the end of the year
(1,978)
(2,562)
Analysis of amounts included in other finance costs:
Interest on pension scheme liabilities
Analysis of amounts recognised in statement of comprehensive income:
Experience gains arising on scheme liabilities
Changes in assumptions underlying the present value of scheme liabilities
Re-measurement of the defined benefit pension liability
24. Employee benefits: share based payments
2023
£’000
70
2023
£’000
(1)
554
553
2022
£’000
56
2022
£’000
(43)
280
237
The total number of options outstanding at 31 March 2023 is 310,654 comprising (i) 3,591 nil cost options (2022: 3,591),
(ii) 302,063 options (2022: 431,243) granted under the Long-Term Incentive Plan and (iii) 5,000 (2022: 5,000) share options
granted with an exercise price equal to the market price on the date of grant.
ANNUAL REPORT 2023 83
Notes to the Financial Statements
CONTINUED
(i)
Nil cost options granted to John Foster:
Date of
Issue
17 Jun 19
Total
Number
3,591
3,591
Share price at
grant date
pence
Fair value
per share
pence
Total fair
value
£
Earliest Exercise
Date
Latest Exercise
Date
316.0
301.0
10,809
17 Jun 22
17 Jun 23
10,809
Reconciliation of nil cost options:
Outstanding at the beginning of the year
Options exercised during the year
Outstanding at the year end
Number of options
2023
Number of options
2022
3,591
-
3,591
12,864
(9,273)
3,591
(ii)
Incentive Plan grants at an exercise price of ten pence to directors of subsidiaries
and executives:
255,304 Long-term Incentive Plan grants were issued on 3 December 2021 at an exercise price of ten pence to directors
of subsidiaries and executives, and expire in five years on 3 December 2026. During the year, 52,953 of these options
were forfeited (2022: 34,535) and 167,816 of these options remain outstanding at 31 March 2023. None of these grants
are exercisable at 31 March 2023.
133,052 Long-term Incentive Plan grants were issued on 14 July 2020 at an exercise price of ten pence to directors of
subsidiaries and executives, and expire in five years on 14 July 2025. During the year, 51,434 of these options were forfeited
(2022: nil) and 71,618 of these options remain outstanding at 31 March 2023. None of these grants are exercisable at 31
March 2023.
135,535 Long-term Incentive Plan grants were issued on 4 July 2019 at an exercise price of ten pence to directors
of subsidiaries and executives, and expire in five years on 4 July 2024. During the year, 24,793 of these options were
forfeited (2022: nil) and 62,629 options remain outstanding at 31 March 2023. None of these grants are exercisable at
31 March 2023.
There are various performance conditions attached to the Long-term Incentive Plan grants. All have a primary performance
condition of the Group share price exceeding a target threshold at the vesting date, and secondary financial performance
conditions specific to the relevant operating segment. All the options have a three-year vesting period.
Date of
Issue
4 Jul 19
14 Jul 20
Number
62,629
71,618
3 Dec 21
167,816
Total
302,063
Exercise Price
pence
Share price at
grant date
pence
Fair value
per share
pence
Total fair value
£
Earliest
Exercise
Date
Latest
Exercise
Date
10.0
10.0
10.0
314.0
315.0
215.0
96.8
75.0
88.0
60,616
4 Jul 22
3 Jul 24
53,714
15 Jul 23
13 Jul 25
147,678
3 Dec 24
2 Dec 26
262,008
ANNUAL REPORT 2023 84
24. Employee benefits: share based payments CONTINUED
Reconciliation of LTIPs:
Outstanding at the beginning of the year
Options granted during the year
Options forfeited during the year
Outstanding at the year end
Vested options exercisable at the year end
Weighted average life of outstanding options (years)
Number of options
Number of options
2023
431,243
-
(129,180)
302,063
-
3.4
2022
210,474
255,304
(34,535)
431,243
-
4.4
(iii)
Share options with an exercise price equal to the market price on the date of grant
Date of
Issue
19 Jan 15
Total
Number
5,000
5,000
Exercise
Share price at
Price
pence
272.5
grant date
pence
272.5
Fair value
per share
pence
63.0
Total fair
Earliest
Exercise
Latest Exercise
Date
Date
19 Jan 18
18 Jan 25
value
£
3,150
3,150
The exercise price of outstanding options at 31 March 2023 is £2.725.
Reconciliation of options with an exercise price equal to the market price on the date of grant,
including the number and weighted average exercise price:
Outstanding at the beginning of the year
Lapsed during the year
Outstanding at the year end
Vested options exercisable at the year end
Weighted average life of outstanding options (years)
Weighted average
Weighted average
exercise price (£)
Number of options
exercise price (£)
Number of options
2023
2.73
-
2.73
2.73
1.8
2023
5,000
-
5,000
5,000
2022
2.68
2.68
2.73
2.73
2.8
2022
58,152
(53,152)
5,000
5,000
The fair values of the options are estimated at the date of grant using appropriate option pricing models and are charged
to the profit and loss account over the vesting period of the options. All options, other than certain nil cost options, are
granted with the condition that the employee remains in employment for three years.
All share options are equity settled. Share options issued without share price conditions attached have been valued using the
Black-Scholes model. Share price options issued with share price conditions attached have been valued using a Monte Carlo
simulation model making explicit allowance for share price targets. Inputs into the valuation models include the estimated
time to maturity, the risk-free rate, expected volatility, and dividend yield. During the year ending 31 March 2023 no nil cost
options were exercised over ordinary shares (2022: 9,273 at a gain of £23,183).
ANNUAL REPORT 2023 85
Notes to the Financial Statements
CONTINUED
Total share-based payment expense recognised in the year
25. Capital and reserves
Share capital
In issue at the start of the year
Share capital issued during the year
In issue at the end of the year
Allotted, called up and fully paid Ordinary shares of 10p each
2023
£’000
41
2022
£’000
45
Ordinary Shares
2022
2021
12,519,900
12,514,985
-
4,915
12,519,900
12,519,900
2023
£’000
1,251
2022
£’000
1,251
By special resolution at an Annual General Meeting on 9 September 2010 the Company adopted new articles of
association, principally to take account of the various changes in company law brought in by the Companies Act 2006.
As a consequence, the Company no longer has an authorised share capital. The holders of ordinary shares are entitled to
receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
During the year no shares (2022: 4,915) were issued following the exercise of share options.
Other reserves
The other reserves in the Group of £703,000 at 31 March 2023 comprise £5,389,000 of merger relief which arose on the
1998 Scheme of Arrangement, when the Company issued 1 share for every 300 shares that shareholders had previously
held in Anglo United plc. Immediately following this Scheme of Arrangement, the Company acquired the Falkland Islands’
businesses for £8.0 million and the £4,686,000 of goodwill on this acquisition was written off against the merger relief.
ANNUAL REPORT 2023 86
2022
£’000
-
251
150
401
2021
£’000
125
-
-
125
25. Capital and reserves CONTINUED
Dividends
The following dividends were recognised and paid in the period:
Interim 2022: 1.0 pence per qualifying ordinary share
Final 2022: 2.0 pence per qualifying ordinary share
Interim 2023: 1.2 pence per qualifying ordinary share
Total dividends recognised in the period
26. Financial instruments
(i)
Fair values of financial instruments
Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market
rate of interest at the balance sheet date if the effect is material.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market
rate of interest at the balance sheet date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand.
Where it is not repayable on demand then the fair value is estimated at the present value of future cash flows, discounted
at the market rate of interest at the balance sheet date.
Interest-bearing borrowings
The fair value of interest-bearing borrowings, which after initial recognition is determined for disclosure purposes only, is
calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest
at the balance sheet date.
Financial Instruments categories and fair values
The fair values of financial assets and financial liabilities are not materially different to the carrying values shown in the
consolidated balance sheet and Company balance sheet.
ANNUAL REPORT 2023 87
Notes to the Financial Statements
CONTINUED
The following table shows the carrying value, which management consider to be materially equal to
fair value for each category of financial instrument:
Cash and cash equivalents
Finance lease debtors
Interest rate swap asset
Trade and other receivables
Rental deposits
Group
Company
2023
£’000
12,800
1,078
1,559
7,203
116
2022
£’000
9,572
1,236
2023
£’000
3,307
-
644
1,559
5,362
132
-
-
2022
£’000
4,376
-
644
-
-
Total assets exposed to credit risk
22,756
16,946
4,866
5,020
Interest rate swap liability
Total trade and other payables
-
-
-
-
(12,508)
(9,119)
(5,939)
(5,849)
Interest-bearing borrowings at amortised cost
(19,734)
(20,719)
(12,146)
(12,668)
The interest rate swaps have been valued using a level 2 methodology.
(ii)
Credit Risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers.
Group
The Group’s credit risk is primarily attributable to its trade receivables. The maximum credit exposure of the Group comprises
the amounts presented in the balance sheet, which are stated net of provisions for expected credit losses. Expected
credit loss provisions are based on previous experience and other evidence, including forward-looking macroeconomic
information, indicative of the recoverability of future cash flows. There have been no significant changes in the estimation
techniques or significant assumptions made during the reporting period. Management has credit policies in place to
manage risk on an on-going basis. These include the use of customer specific credit limits.
Company
The majority of the Company’s receivables are with subsidiaries. The Company does not consider these counter-parties to
be a significant credit risk.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. Therefore, the maximum exposure to
credit risk at the balance sheet date was £22,085,000 (2022: £16,946,000) being the total trade receivables, finance
lease debtors, interest swap, rental deposits and cash and cash equivalents in the balance sheet. The credit risk on cash
balances and the interest rate swap is limited because the counterparties are banks with high credit ratings assigned by
international credit-rating agencies.
ANNUAL REPORT 2023 26. Financial instruments CONTINUED
The maximum exposure to credit risk for trade receivables at the balance sheet date by geographic region was:
Group
Falkland Islands
Europe
North America
United Kingdom
Other
Total trade receivables
2023
£’000
3,167
617
526
2,492
401
7,203
The Company has no trade debtors.
Credit quality of financial assets and expected credit losses
Group
Not past due
Past due 0-30 days
Past due 31-120 days
More than 120 days
Total trade receivables
Finance lease debtors
Gross
2023
£’000
5,722
1,013
204
429
7,368
1,078
Impairment
2023
£’000
-
(7)
(10)
(148)
(165)
(31)
Net
2023
£’000
5,747
1,006
194
281
7,203
1,047
Gross
2022
£’000
3,736
1,020
491
328
5,575
1,261
Impairment
2022
£’000
-
(2)
(58)
(153)
(213)
(25)
88
2022
£’000
1,773
775
254
2,365
195
5,362
Net
2022
£’000
3,736
1,018
433
175
5,362
1,236
The amount of finance lease receivable that is past due is immaterial and secured on asset financed.
The movement in the allowances for impairment in respect of trade receivables and finance lease
receivables during the year was:
Group
Balance at 1 April
Impairment loss recognised
Utilisation of provision (debts written off)
Balance at 31 March
Provided against finance lease receivables
Provided against trade and other receivables
Balance at 31 March
2023
£’000
238
27
(69)
196
31
165
196
2022
£’000
127
114
(3)
238
25
213
238
The allowance account for trade receivables is used to record impairment losses unless the Group is satisfied that no
recovery of the amount owing is possible. At that point, the amounts considered irrecoverable are written off against the
trade receivables directly.
No further analysis has been provided for cash and cash equivalents, trade receivables from Group companies, other
receivables and other financial assets, as there is limited exposure to credit risk and expected credit losses are assessed
as immaterial.
ANNUAL REPORT 2023 89
Notes to the Financial Statements
CONTINUED
(iii)
Liquidity risk
Financial risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. At the beginning of
the year the Group had outstanding bank loans of £14.2 million (2022 £20.1 million). All payments due during the year with
respect to these agreements were met as they fell due.
At the start of the year, the Company had one bank loan of £12.7 million (2022 £13.2 million). All payments due during the
year with respect to these agreements were met as they fell due.
The Group manages its cash balances centrally at head office and prepares rolling cash flow forecasts to ensure availability
of funds.
Liquidity risk – Group
The following are the contractual maturities of financial liabilities, including estimated interest:
2023
Financial liabilities
Secured bank loans
Lease liabilities
Trade payables
Other creditors
Loan from Joint Venture
Contractual cash flows
Carrying
amount
£’000
Total
£’000
1 year or
less
£’000
1 to 2
years
£’000
2 to 5
years
£’000
5 years
and over
£’000
13,255
15,274
1,348
1,404
6,479
6,322
1,696
249
12,977
6,322
1,696
249
839
6,322
1,696
249
3,047
1,688
9,475
9,671
-
-
-
-
-
-
-
-
779
-
-
-
-
Accruals
3,950
3,950
3,950
Total financial liabilities
31,951
40,468
14,404
2,183
4,735
19,146
2022
Financial liabilities
Secured bank loans
Lease liabilities
Trade payables
Other creditors
Loan from joint venture
Accruals
Contractual cash flows
Carrying
amount
£’000
Total
£’000
1 year or
less
£’000
14,183
16,410
7,066
4,111
1,797
249
2,962
13,293
4,111
1,797
249
2,962
1,346
874
4,111
1,797
249
2,962
1 to 2
years
£’000
1,332
709
-
-
-
-
2 to 5
years
£’000
5 years
and over
£’000
3,486
1,616
10,246
10,094
-
-
-
-
-
-
-
-
Total financial liabilities
30,368
38,822
11,339
2,041
5,102
20,340
ANNUAL REPORT 2023 90
26. Financial instruments CONTINUED
Liquidity risk – Company
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
effects of netting agreements:
2023
Financial liabilities
Secured bank loans
Trade payables
2022
Financial liabilities
Secured bank loans
Contractual cash flows
Carrying
amount
£’000
Total
£’000
1 year or
less
£’000
1 to 2
years
£’000
2 to 5
years
£’000
5 years
and over
£’000
12,146
14,098
6
6
891
6
Amounts owed to subsidiary undertakings
5,269
5,269
5,269
Other creditors
Accruals
89
548
89
548
89
548
947
2,785
9,475
-
-
-
-
-
-
-
-
-
-
-
-
Total financial liabilities
18,058
20,010
6,803
947
2,785
9,475
Contractual cash flows
Carrying
amount
£’000
Total
£’000
1 year or
less
£’000
1 to 2
years
£’000
2 to 5
years
£’000
5 years
and over
£’000
Amounts owed to subsidiary undertakings
29
29
12,668
14,825
893
29
Interest rate swap liability
5,085
5,085
5,085
Other creditors
Accruals
89
615
89
615
89
615
879
2,807
10,246
-
-
-
-
-
-
-
-
-
-
-
-
Total financial liabilities
18,486
20,643
6,711
879
2,807
10,246
(iv) Market Risk
Financial risk management
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments.
Market risk – Foreign currency risk
The Group has exposure to foreign currency risk arising from trade and other payables which are denominated in foreign
currencies. The Group is not, however, exposed to any significant transactional foreign currency risk. The Group’s exposure
to foreign currency risk is as follows and is based on carrying amounts for monetary financial instruments.
ANNUAL REPORT 2023 91
Notes to the Financial Statements
CONTINUED
Group
2023
Cash and cash equivalents
Trade payables and other payables
Balance sheet exposure
Group
2022
Cash and cash equivalents
Trade payables and other payables
Balance sheet exposure
Total
Balance
sheet
exposure
£’000
GBP
£’000
Total
£’000
341
12,459
12,800
(1,791)
(11,927)
(13,718)
(1,450)
532
(918)
Total
Balance
sheet
exposure
£’000
283
GBP
£’000
9,289
Total
£’000
9,572
(1,426)
(8,544)
(9,970)
(1,143)
745
(398)
Other
£’000
15
(661)
(646)
Other
£’000
40
(312)
(272)
EUR
£’000
107
(485)
(378)
EUR
£’000
126
(635)
(509)
USD
£’000
219
(645)
(426)
USD
£’000
117
(479)
(362)
The Company has no exposure to foreign currency risk.
Sensitivity analysis
Group
A 10% weakening of the following currencies against pound sterling at 31 March 2023 would have increased/(decreased)
equity and profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance
sheet date and had been applied to risk exposures existing at that date. This analysis assumes that all other variables,
in particular other exchange rates and interest rates remain constant and is performed on the same basis for year ended
31 March 2022.
EUR
USD
Equity
Profit or Loss
2023
£’000
38
43
2022
£’000
51
36
2023
£’000
38
43
2022
£’000
51
36
A 10% strengthening of the above currencies against pound sterling at 31 March 2023 would have the equal but opposite
effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
ANNUAL REPORT 2023 92
26. Financial instruments CONTINUED
Market risk – interest rate risk
At the balance sheet date, the interest rate profile for the Group’s interest-bearing financial instruments was:
Fixed rate financial instruments
Leases receivable
Bank loans
Lease liabilities
Total fixed rate financial instruments
Variable rate financial instruments
Effect of Interest rate swap
Bank loans
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
1,078
(407)
(6,479)
(5,808)
1,236
(508)
(6,536)
(5,808)
1,559
-
-
-
-
-
-
-
-
-
-
-
(12,848)
(13,675)
(12,146)
(12,668)
Total Variable rate financial instruments
(11,289)
(13,675)
(12,146)
(12,668)
At 31 March 2023, the Group had four bank loans:
(i)
£12.1 million (2022: £12.7 million) ten-year loan, which was drawn down on 28 June 2019, with interest charged at
the compounded daily SONIA rate plus 1.8693%;
(ii) £0.6 million (2022: £0.8 million) repayable over ten years until May 2025, secured against the newest vessel in
PHFC, with interest charged at 2.6% above the bank of England base rate;;
(iii) £0.1 million (2022: £0.2 million) repayable over ten years until May 2025, secured against freehold property held in
PHFC, with interest charged at 1.75% above the Bank of England base rate;
(iv) £0.4 million (2022: £0.5 million) drawn down by Momart, interest has been fixed on this loan at 2.73% for the full ten
years until December 2026.
The interest payable on the £12.1 million ten-year loan has been hedged by one interest swap, taken out on 30 December
2021 with an initial notional value of £12.625 million, with interest payable at the difference between 1.1766% and the
compounded daily SONIA rate plus 0.1193%. This interest rate swap notional value decreases at £125,000 per quarter
over five years until June 2024, and then at £150,000 per quarter for a further five years until June 2029 when the
outstanding bullet payment of £8,525,000 is likely to be refinanced. The notional value of the swap at 31 March 2023 is
£12.0 million (2022: £12.5 million).
Lease liabilities
At 31 March 2023, the Group had the following lease liabilities:
(i)
£5.1 million lease liabilities payable to Gosport Borough Council; £4.5 million for the Gosport pontoon and £0.6
million for the ground rent on the pontoon. Both of these leases run until June 2061 and finance charges accrue on
these liabilities at a weighted average rate of 4.51%.
(ii) £1.4 million of property rental leases, including two warehouses rented by Momart and the Momart and Bishops
Stortford head offices, which run for between 3 to 6 years as at 31 March 2023. The weighted average interest rate
of these rental liabilities is 3.25%.
(iii) £0.5 million of lease liabilities taken out to finance trucks by hire purchase leases at Momart. The weighted average
interest rate of these truck liabilities is 3.08%.
The total blended average interest rate on the Group’s lease liabilities is 4.2 % per annum.
ANNUAL REPORT 2023
93
Notes to the Financial Statements
CONTINUED
Interest rate sensitivity analysis
An increase of 100 basis points in interest rates at the balance sheet date would have increased / (decreased) equity and
profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance sheet date
and has been applied to risk exposures existing at that date.
This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the
effect of financial instruments with variable interest rates and financial instruments at fair value through profit or loss or
available-for-sale with fixed interest rates. The analysis is performed on the same basis for 31 March 2022.
Equity
Interest rate swap liability
Variable rate financial liabilities
Profit or Loss
Interest rate swap liability
Variable rate financial liabilities
(v) Capital Management
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
121
(128)
121
(128)
127
(137)
127
(137)
121
(121)
121
(121)
127
(127)
127
(127)
The Group’s objectives when managing capital, which comprises equity and reserves at 31 March 2023 of £43,806,000
(2022: £40,657,000) are to safeguard its ability to continue as a going concern, so that it can continue to provide returns
to shareholders and benefits to our other stakeholders.
27. Operating leases
Leases as lessor
The Group leases out its investment properties, which consist of 75 houses and flats and ten mobile homes in the Falkland
Islands, these are leased to staff, fishing agency representatives and other short-term visitors to the Islands. These lease
agreements generally have an initial notice period of six months, and beyond the six months initial tenancy, one month’s
notice can be given by either party, therefore future minimum lease payments under non-cancellable leases receivable are
not material.
The Company had no operating lease commitments. However, as a result of the purchase of the five warehouses at Leyton,
the Company had the following non-cancellable operating lease rentals receivable:
Company
Less than one year
Between one and five years
More than five years
2023
£’000
1,097
4,389
17,831
23,317
2022
£’000
974
3,897
16,805
21,676
ANNUAL REPORT 2023 94
28. Capital commitments
At 31 March 2023, the Group had entered into the following contractual commitments:
•
•
•
£427,000 in Momart comprising £292,000 for enhancements to existing vehicles, £111,000 for two new vehicles, and
£23,000 for IT upgrades.
£92,000 in PHFC for infrastructure replacement.
£42,000 in FIC for the new retail sales system.
At 31 March 2022, the Group had entered into the following contractual commitments:
•
•
£385,000 at Momart comprising £272,000 for two new vehicles, £79,000 for an HGV trailer and other enhancements
to existing vehicles and £34,000 for climate control systems.
£270,000 in FIC comprising £190,000 for a new retail sales system and £80,000 for a warehouse office.
29. Related parties
The Group has a related party relationship with its subsidiaries (see note 14) and with its directors and executive officers.
Directors of the Company and their immediate relatives controlled 30.3% (2022: 30.3%) of the voting shares of the
Company at 31 March 2023.
The compensation of key management personnel, which includes the FIH group plc directors and the managing directors
of the subsidiaries, is as follows:
Group
Company
Key management emoluments including social security costs
Company contributions to defined contribution pension plans
Share-related awards
2023
£’000
1,010
47
41
2022
£’000
1,317
41
45
Total key management personnel compensation
1,098
1,403
2023
£’000
600
9
46
655
2022
£’000
943
-
20
963
At 31 March 2023, the Group’s joint venture, SAtCO, has debtors of £498,000 due from its parent companies.
ANNUAL REPORT 2023 95
Notes to the Financial Statements
CONTINUED
On 2 May 2017, KJ Ironside, the Managing Director of FIC, purchased a property which had been built on approximately
510 square metres of land owned by FIC. FIC provided a loan of £65,000 to Mr Ironside to purchase the freehold of this
land. The loan is to be repaid in full in the event of the sale of the property, Mr Ironside ceasing to hold any permits or
licenses required by law in respect of his ownership or occupation of the property, him ceasing to be employed by FIC at
any time before his 65th birthday (unless due to ill health) or his death. £650 of interest is payable each year by Mr Ironside
to FIC in respect of this loan.
FIH group plc key transactions with subsidiary entities:
Group
FIC
Loan from subsidiary
Management fees charged annually
Momart
Loan to subsidiary
Management fees charged annually
PHFC
Loan to subsidiary
Management fees charged annually
2023
£’000
10,257
635
(1,815)
120
(2,555)
240
2022
£’000
10,057
635
(1,630)
120
(2,555)
240
ANNUAL REPORT 2023 96
30. Accounting estimates
The preparation of financial statements in conformity with adopted IFRS requires management to make judgements,
estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based upon historical experience and various other factors
that are believed to be reasonable under the circumstances, the results of which form the basis of the judgements as to
asset and liability carrying values which are not readily apparent from other sources. Actual results may vary from these
estimates, and are taken into account in periodic reviews of the application of such estimates and assumptions. Revisions
to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of revision and future periods if the revision affects both current and future periods.
Defined benefit pension liabilities
At 31 March 2023, 11 pensioners were receiving payments from the FIC defined benefit pension scheme, and there are
three deferred members. A significant degree of estimation is involved in predicting the ultimate benefits payment to these
pensioners using actuarial assumptions to value the defined benefit pension liability (see note 23). Management have
selected these assumptions from a range of possible options following consultations with independent actuarial advisers.
There is a range of assumptions that may be appropriate, particularly when considering the projection of life expectancy
post-retirement, which is a key demographic assumption, and has been based on UK mortality data, if the life expectancy
assumption was one more year than the assumptions used, this would result in an increase of £80,000 in the liability.
Selecting a different assumption could significantly increase or decrease the IAS19 value of the Scheme’s liabilities. The
projections of life expectancy make no explicit allowance for specific individual risks, such as the possible impact of climate
change or a major medical breakthrough, the projections used reflect the aggregate impact of the many possible factors
driving changes in future mortality rates.
The figures are prepared on the basis that both the FIC pension scheme and FIC are ongoing. If the scheme were to be
wound up, the position would differ, and would almost certainly indicate a much larger deficit.
Inventory provisions
The Group makes provisions in relation to inventory value, where the net realisable value of an item is expected to be lower
than its cost, due to obsolescence. Historically, the calculation of inventory provisions has entailed the use of estimates and
judgements combined with mechanistic calculations and extrapolations reflecting inventory ageing and stock turn. During
the year ended 31 March 2023, inventory provisions increased to £1,100,000 (2022: £1,089,000). Inventory greater than
12 months old and with no sales in the twelve months before 31 March 2023 is provided against in full. If this provision
was reduced to 50% of the gross inventory value, the provision would reduce by circa £174,000 2022: £169,000). If this
provision was extended to cover all inventory greater than six months old with no sales in the twelve months before 31
March 2023, the provision would increase by £117,000 (2022: £94,000).
Long term construction contracts
Significant estimation is involved in determining the revenue and profit to be recognised on long term contracts. This
includes determining percentage of completion at the balance sheet date by estimating the total expected costs to
complete each contract along with their future profitability. These estimates directly influence the revenue and profit that
can be recognised on such contracts.
ANNUAL REPORT 2023 97
Stuart Munro
Chief Executive Officer
Reuben Shamu
Chief Financial Officer
Robert Johnston
Non-executive Director
Dominic Lavelle
Non-executive Director
Holger Schröder
Non-executive Director
Company Secretary
AMBA Secretaries Limited
Directors and Company Information
Directors
Robin Williams,
Non-executive Chairman
Stockbroker and
Nominated Adviser
W.H. Ireland Limited
24 Martin Lane,
London EC4R 0DR
Registrar
Link Group
10th Floor Central Square,
29 Wellington Street,
Leeds LS1 4DL
Solicitors
Shoosmiths LLP
1 Bow Churchyard
London EC4M 9DQ
Auditor
Grant Thornton UK LLP
103 Colmore Row,
Birmingham B3 3AG
Financial PR
Novella Communications,
South Wing, Somerset House,
London WC2R 1LA
Registered Office
Kenburgh Court
133-137 South Street
Bishop’s Stortford
Hertfordshire CM23 3HX
T: 01279 461630
E: admin@fihplc.com
W: www.fihplc.com
Registered number 03416346
The Falkland Islands
Company
Kevin Ironside, Director
T: 00 500 27600
E: info@fic.co.fk
W:www.falklandislandscompany.com
The Portsmouth Harbour
Ferry Company
Adam Brown, Director
T: 02392 524551
E: admin@gosportferry.co.uk
W: www.gosportferry.co.uk
Momart Limited
Alison Jordan, Director
T: 020 7426 3000
E: enquiries@momart.com
W: www.momart.com
www.fihplc.com
ANNUAL REPORT 2023