Registered number: 00362699
BROWNING'S ELECTRIC COMPANY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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BROWNING'S ELECTRIC COMPANY LIMITED
REGISTERED NUMBER: 00362699
BALANCE SHEET
AS AT 31 DECEMBER 2021
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Net assets excluding pension liability
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BROWNING'S ELECTRIC COMPANY LIMITED
REGISTERED NUMBER: 00362699
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2021
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 1 July 2022.
The notes on pages 3 to 17 form part of these financial statements.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Browning's Electric Company Limited ("the Company") is a Company limited by shares, incorporated in England and Wales. Its registered office is 11 Thames Road, Barking, Essex IG11 0HG.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of BEC (London) Limited as at 31 December 2021 and these financial statements may be obtained from the company's registered office.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Revenue is recognised on delivery.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis:.
Depreciation is provided on the following annual basis:
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Freehold land and buildings
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20% and 25% straight line
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15% - 20% reducing balance
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over the period of the lease
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Revaluation of tangible fixed assets
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Individual freehold land and buildings are carried at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Balance Sheet date.
Fair values are determined from market based evidence, undertaken by directors in the current year.
Revaluation gains and losses are recognised in the Statement of Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
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Leased assets: the Company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
Defined benefit pension plan
The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The liability recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.
The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the profit or loss account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
Revaluation of tangible fixed assets
The directors have assessed the market value of the property. The valuation was based upon market values as at the balance sheet date on an 'open market value' basis. See note 6 for further information.
Defined benefit pension scheme
The company has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends. See note 13 for further information.
Work in progress
Work in progress consists of labour, materials and overhead costs of ongoing projects at the balance sheet date. Management estimate the value of materials and overheads based upon a percentage of the value of labour work at that time. The percentages used are based upon the managements knowledge and experience of the industry taking into account current pricing factors. The value of work in progress is £288,412 (2020 - £157,040) and is included within note 7.
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The average monthly number of employees, including directors, during the year was 4 (2020 - 5).
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Freehold land and buildings
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Fixtures, fittings and motor vehicles
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Charge for the year on owned assets
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
5.Tangible fixed assets (continued)
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Cost or valuation at 31 December 2021 is as follows:
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31 December 2021 based on open market value
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If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:
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The valuation was undertaken by an independent professional surveyor.
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Raw materials and consumables
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Work in progress (goods to be sold)
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Stock recognised in cost of sales during the year as an expense was £2,038,190 (2020 - £1,761,020).
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Amounts owed by group undertakings
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Obligations falling due under hire purchase contracts amounting to £3,174 (2020 - £28,248) are secured upon the assets to which they relate.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Charged to profit or loss
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Charged to other comprehensive income
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Accelerated capital allowances
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Defined benefit scheme liability
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Revalued tangible fixed assets
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Asset - due within one year
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The Company operates a Defined Benefit Pension Scheme.
Defined Benefit
The amounts in the financial statements for the year ended 31 December 2021, relating to defined benefit pensions, are based on a full actuarial valuation.
The most recent full actuarial valuation was at 5 April 2019, which has been updated to 31 December 2021 by a qualified independent actuary.
The defined benefit scheme became a closed scheme on 5 April 2005 and an alternative money purchase scheme was operated for new members and to provide benefits in respect of future service for the current members of the defined benefit scheme. The company continues to fund the defined benefit scheme to meet the minimum funding requirements (currently 6.7% of pensionable salary) in respect of obligations to members for past service benefits earned to the date of closure. Company contributions to the money purchase scheme were 5% of pensionable salaries.
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Reconciliation of present value of plan liabilities:
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At the beginning of the year
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
12.Pension commitments (continued)
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Reconciliation of present value of plan assets:
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At the beginning of the year
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Composition of plan assets:
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None of the fair value of the assets shown above include any direct investments in the group's own financial instruments or any property occupied by, or used by, the group.
Amounts recognised in the balance sheet as a Defined Benefit Liability:
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Net pension scheme liability
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The amounts recognised in profit or loss are as follows:
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
12.Pension commitments (continued)
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No amounts (2020 -£NIL) were included in the cost of assets.
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The Company expects to contribute £240,000 to its Defined Benefit Pension Scheme in 2022.
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Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
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- at 65 for a male aged 45 now
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BROWNING'S ELECTRIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Commitments under operating leases
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At 31 December 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Later than 1 year and not later than 5 years
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14.Guarantees
Brownings Electic Company Limited has joint and several liability for the bank borrowings of BEC (London) Limited, the parent company. At 31 December 2021 the amounts guaranteed amounted to £Nil (2020 - £Nil).
The auditor's report on the financial statements for the year ended 31 December 2021 was unqualified.
The audit report was signed on 1 July 2022 by Stuart Moon (Senior Statutory Auditor) on behalf of Barnes Roffe LLP.
The ultimate parent undertaking is BEC (London) Limited, a company incorporated in England and Wales.
The consolidated financial statements of BEC (London) Limited, the largest group of undertakings for which accounts are drawn up, are available to the public at the company's registered office.
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