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REGISTERED NUMBER: 03880838 (England and Wales)


















EDWARD DAVIES COMMERCIALS LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022






EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022










Page

Company Information 1

Strategic Report 2 to 3

Report of the Directors 4 to 5

Report of the Independent Auditors 6 to 9

Income Statement 10

Other Comprehensive Income 11

Balance Sheet 12

Statement of Changes in Equity 13

Notes to the Financial Statements 14 to 24


EDWARD DAVIES COMMERCIALS LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2022







DIRECTORS: R H T Davies
J L Davies
E T Davies
J B Pace



SECRETARY: R H T Davies



REGISTERED OFFICE: Wentwood House
Langstone Business Park
Langstone
Newport
NP18 2JD



REGISTERED NUMBER: 03880838 (England and Wales)



AUDITORS: MHA
Chartered Accountants and Statutory Auditor
Swansea, United Kingdom



AUDITORS OFFICE: 3 New Mill Court
Swansea Enterprise Park
Swansea
SA7 9FG

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022


The directors present their strategic report for the year ended 31 December 2022.

REVIEW OF BUSINESS
The Income Statement and Balance Sheet for the year, which includes all relevant key performance indicators, are set out the annexed financial statements.

The principal activity of the company in the year was that of bespoke vehicle design and modification.

The strategy of the business is to increase its market share by focussing on new product design and strong customer service.

The company enjoys a number of competitive advantages including strong brand recognition, where it consistently achieves a strong market share; a well-established reputation for price competitiveness; a knowledgeable and enthusiastic workforce and a strong customer focus throughout the business.

Whilst trading conditions are expected to remain competitive throughout FY' 23, the board considers the company to be well positioned to manage and take on this challenge.

Key performance indicators

The company's key performance indicators (KPI's) are summarised below :

KPI's - Year ended 31 December 2022 31 December 2021
Turnover £25,805k £20,240k
Cash at bank £2,515k £1,186k
Net current assets £2,845k £1,381k
Net assets £4,485k £2,278k


EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the company's strategy are subject to a number of risks.

The key business risks affecting the company are considered to relate to competitor activity and employee retention and are summarised as follows :

Risk Potential impact Mitigation





Competition






The market in which the company
operates is subject to intense
competition. The impact of such
competition could impact on
margins.





The company continues to invest
heavily in new product design,
providing customers with a choice of
options. This coupled with a strong
focus on customer service, results in
a high level of repeat business.






People









The business could be impacted by
the loss of key individuals.





The business looks to increase staff
engagement through (1)
opportunities to give feedback and to
influence future business
developments and (2) training and
progression opportunities.


Price risk
The company is not exposed to significant commodity price risk as a result of its operations.

Credit risk
The company's financial assets are cash and trade debtors. The company's credit risk is primarily attributable to its trade debtors which are presented in the balance sheet net of allowances for doubtful debts. The company has implemented policies that require appropriate credit checks on potential customers before sales are made.

Liquidity risk
The company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure that the company has sufficient funds for operations and planned expansions.

Interest rate cash flow risk
The company has both interest-bearing assets and interest-bearing liabilities. Interest bearing assets comprise only cash balances, which earn interest at floating rates. The company has a policy of maintaining debt at floating rates. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

ON BEHALF OF THE BOARD:





J B Pace - Director


28 September 2023

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022


The directors present their report with the financial statements of the company for the year ended 31 December 2022.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of bespoke vehicle design and modification.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2022.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

R H T Davies
J L Davies
E T Davies
J B Pace

GOING CONCERN
The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. In making their assessment the directors have reviewed the balance sheet, the likely future cash flows of the business and have considered the facilities that are in place at the date of signing the report.

The company meets its day to day working capital requirements from its cash reserves. At the date of signing the report, sales to all key markets have continued to meet budgeted levels. With no indication that at the current time this position will change, the company's forecast and projections show that the company will be able to operate sufficiently.

At the time of approving the financial statements, the directors have reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue adopt the going concern basis of accounting in preparing the financial statements.

DISCLOSURE IN THE STRATEGIC REPORT
Included in the company's strategic report is a review of the business and description of the principal risks and uncertainties facing the company.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.


EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

AUDITORS
MHA were appointed as the company's auditors for the year ended 31 December 2022.

The auditors, MHA, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





J B Pace - Director


28 September 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
EDWARD DAVIES COMMERCIALS LIMITED


Opinion
We have audited the financial statements of Edward Davies Commercials Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in 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 United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
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 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.

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

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
EDWARD DAVIES COMMERCIALS LIMITED


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on pages four and five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
EDWARD DAVIES COMMERCIALS LIMITED


Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Detecting Irregularities
Irregularities, including fraud, are instances of non-compliance with laws and regulations.

The objectives of our audit in relation to fraud are as follows :
- to identify and assess the risks of material mis-statement of the financial statements due to fraud ;
- to obtain sufficient appropriate audit evidence regarding the assessed risks of material mis-statement due to fraud, through designing and implementing appropriate responses ;
- and to respond appropriately to fraud or suspected fraud identified during the audit.

However, the primary responsibility for the prevention and detection of fraud rests with both Those Charged With Governance of the entity and management.

Auditor's approach to assessing the risks of material mis-statement due to irregularities, including fraud
We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework (FRS 102 and Companies Act 2006) and the relevant tax compliance regulations in the UK. We assessed the risks of material misstatement in respect of fraud and considered the extent to which non-compliance with laws and regulations might have a material effect on the financial statements.

Audit procedures designed to respond to the risks of non-compliance with laws and regulations
Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations identified above. We made enquiries of management to understand how the company is complying with those frameworks. Audit procedures performed by the engagement team also included a review of the financial statements disclosures to underlying supporting documentation.

Audit procedures designed to respond to the risks of fraud
We assessed the susceptibility of the company's financial statements to material mis-statement, including how fraud might occur by meeting with management to understand where they considered there was susceptibility to fraud. Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud.

As well as adopting an attitude of professional scepticism, we have obtained information for use in identifying the risk of fraud when performing risk assessment procedures and performed the following procedures in light of the risk of fraud:

- Discussion amongst the engagement team regarding the susceptibility of the company to fraud;
- Consideration of the risk of fraud when documenting and testing internal controls;
- Enquiring of management how they: assess the risk of fraud; identify and respond to the risks of fraud;
- Enquiring of management and directors whether they have any knowledge of actual or suspected fraud;
- Enquiring of management and those charged with governance around actual and potential litigation and claims;
- Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
- Reviewing financial statements or the operations of the company through enquiry and inspection;
- Reviewing financial statements disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Remaining alert to inconsistent or contradictory information and obtaining evidence to support information provided.


REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
EDWARD DAVIES COMMERCIALS LIMITED



Management override of controls
We considered the risk of fraud through management override and, in response, we incorporated testing of manual journal entries into our audit approach. The audit engagement team performed journal entry testing using a risk-based approach and evaluating whether there was evidence of bias, with a focus on any journals indicating large or unusual transactions based on our understanding of the company.

Considerations around likelihood of detection
However owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material mis-statements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Brian Garland BA ACA (Senior Statutory Auditor)
for and on behalf of MHA
Chartered Accountants and Statutory Auditor
Swansea, United Kingdom

28 September 2023

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

2022 2021
Notes £    £   

TURNOVER 3 25,804,788 20,239,946

Cost of sales 14,701,392 11,160,611
GROSS PROFIT 11,103,396 9,079,335

Administrative expenses 8,195,262 6,509,914
2,908,134 2,569,421

Other operating income 218,412 6,368
OPERATING PROFIT 5 3,126,546 2,575,789


Interest payable and similar expenses 6 357,310 376,936
PROFIT BEFORE TAXATION 2,769,236 2,198,853

Tax on profit 7 562,093 381,421
PROFIT FOR THE FINANCIAL YEAR 2,207,143 1,817,432

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022 2021
Notes £    £   

PROFIT FOR THE YEAR 2,207,143 1,817,432


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

2,207,143

1,817,432

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

BALANCE SHEET
31 DECEMBER 2022

2022 2021
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 8 86,606 73,593
Tangible assets 9 5,459,269 4,577,263
5,545,875 4,650,856

CURRENT ASSETS
Stocks 10 2,468,836 1,834,229
Debtors 11 2,900,162 5,167,808
Cash at bank and in hand 2,514,956 1,185,535
7,883,954 8,187,572
CREDITORS
Amounts falling due within one year 12 5,038,493 6,806,926
NET CURRENT ASSETS 2,845,461 1,380,646
TOTAL ASSETS LESS CURRENT
LIABILITIES

8,391,336

6,031,502

CREDITORS
Amounts falling due after more than one
year

13

(3,103,678

)

(3,462,197

)

PROVISIONS FOR LIABILITIES 17 (802,827 ) (291,617 )
NET ASSETS 4,484,831 2,277,688

CAPITAL AND RESERVES
Called up share capital 18 20,000 20,000
Share premium 19 1,317,040 1,317,040
Retained earnings 19 3,147,791 940,648
SHAREHOLDERS' FUNDS 4,484,831 2,277,688

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2023 and were signed on its behalf by:





J B Pace - Director


EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   

Balance at 1 January 2021 20,000 (876,784 ) 1,317,040 460,256

Changes in equity
Total comprehensive income - 1,817,432 - 1,817,432
Balance at 31 December 2021 20,000 940,648 1,317,040 2,277,688

Changes in equity
Total comprehensive income - 2,207,143 - 2,207,143
Balance at 31 December 2022 20,000 3,147,791 1,317,040 4,484,831

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022


1. STATUTORY INFORMATION

Edward Davies Commercials Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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


Monetary amounts in these financial statements are rounded to the nearest £.

2. ACCOUNTING POLICIES

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

The principal accounting policies adopted are set out below.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows.

The financial statements of the company are consolidated in the financial statements of EDI Holdings Limited.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors which are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only effects that period or in the period of the revision and future periods if the revision affects both current and future periods.

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


2. ACCOUNTING POLICIES - continued

Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes . The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue recognition
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably.The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered .

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of four years.

Computer software is being amortised evenly over its estimated useful life of four years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Land and buildings - in accordance with the property
Plant and machinery - at varying rates on cost
Fixtures and fittings - 25% on cost
Motor vehicles - 25% on cost
Computer equipment - 20% on cost

Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance obligations are met. Where a grant date does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


2. ACCOUNTING POLICIES - continued

Stocks
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due
allowance for obsolete and slow moving items. Net Realisable Value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

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

Financial instruments
Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Basic financial liabilities, including trade and other creditors and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

Current or deferred taxation assets and liabilities are not discounted.

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

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

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

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

Research and development
Expenditure on research and development is written off in the year in which it is incurred.


Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


2. ACCOUNTING POLICIES - continued

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

Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of the asset have passed to the company, and hire purchase contracts are capitalised in the statement of financial position and are depreciated over the shorter of the lease term and the assets' useful lives. A corresponding liability is recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest on the remaining balance of the liability.

Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Going concern
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. The directors are confident in the company's ability to continue to trade for the foreseeable future and are prepared to provide the necessary financial support to enable it to do so. The financial statements have been prepared on a going concern basis on the assumption that the directors, the parent company and associated parties will continue to support the company to meet its working capital requirements as necessary.

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

4. EMPLOYEES AND DIRECTORS


20222021
££
Wages and salaries, Social security and Other pension costs5,586,3673,918,940

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

20222021
££

Production, sales and operations 12076
Administration1614
Directors 44

14094

2022 2021
£    £   
Directors' remuneration 552,793 630,112

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


4. EMPLOYEES AND DIRECTORS - continued

Information regarding the highest paid director is as follows:
2022 2021
£    £   
Emoluments etc 236,925 336,978

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

20222021
££
Hire of plant and machinery33,42423,507
Other operating leases 346,279284,613
Depreciation - owned and leased assets 1,649,7721,319,601
Profit on disposal of fixed assets (81,096)(14,996)
Development costs amortisation 2,0491,791
Computer software amortisation17,0078,250
Auditors' remuneration17,500-
Foreign exchange differences (3,930)(122,995)

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2022 2021
£    £   
Bank interest 42,755 16,105
Bank loan interest 284,328 345,140
Hire purchase 30,227 15,691
357,310 376,936

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2022 2021
£    £   
Current tax:
UK corporation tax 50,883 -

Deferred tax 511,210 381,421
Tax on profit 562,093 381,421

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


7. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2022 2021
£    £   
Profit before tax 2,769,236 2,198,853
Profit multiplied by the standard rate of corporation tax in the UK of
19% (2021 - 19%)

526,155

417,782

Effects of:
Expenses not deductible for tax purposes 13,815 10,516
Depreciation in excess of capital allowances 373,245 236,990
Utilisation of tax losses (351,122 ) (283,641 )
Adjustments to tax charge in respect of previous periods - (226 )
Total tax charge 562,093 381,421

8. INTANGIBLE FIXED ASSETS
Development Computer
costs software Totals
£    £    £   
COST
At 1 January 2022 162,437 85,000 247,437
Additions - 32,069 32,069
At 31 December 2022 162,437 117,069 279,506
AMORTISATION
At 1 January 2022 158,719 15,125 173,844
Amortisation for year 2,049 17,007 19,056
At 31 December 2022 160,768 32,132 192,900
NET BOOK VALUE
At 31 December 2022 1,669 84,937 86,606
At 31 December 2021 3,718 69,875 73,593

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


9. TANGIBLE FIXED ASSETS
Fixtures
Short Plant and and
leasehold machinery fittings
£    £    £   
COST
At 1 January 2022 736,040 5,429,779 102,778
Additions 1,615,161 562,799 129,815
Disposals - (8,642 ) -
Reclassification/transfer 721,900 (721,900 ) -
At 31 December 2022 3,073,101 5,262,036 232,593
DEPRECIATION
At 1 January 2022 326,019 1,782,062 78,164
Charge for year 138,738 1,345,155 14,522
Eliminated on disposal - (8,640 ) -
Reclassification/transfer 6,832 (6,832 ) -
At 31 December 2022 471,589 3,111,745 92,686
NET BOOK VALUE
At 31 December 2022 2,601,512 2,150,291 139,907
At 31 December 2021 410,021 3,647,717 24,614

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 January 2022 332,836 436,662 7,038,095
Additions 312,094 87,725 2,707,594
Disposals (300,136 ) - (308,778 )
Reclassification/transfer - - -
At 31 December 2022 344,794 524,387 9,436,911
DEPRECIATION
At 1 January 2022 87,135 187,452 2,460,832
Charge for year 76,389 74,968 1,649,772
Eliminated on disposal (124,322 ) - (132,962 )
Reclassification/transfer - - -
At 31 December 2022 39,202 262,420 3,977,642
NET BOOK VALUE
At 31 December 2022 305,592 261,967 5,459,269
At 31 December 2021 245,701 249,210 4,577,263

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


10. STOCKS
2022 2021
£    £   
Stocks 2,323,880 1,658,245
Work-in-progress 144,956 175,984
2,468,836 1,834,229

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
£    £   
Trade debtors 1,856,329 3,835,998
Directors' current accounts - 70,421
Corporation tax recoverable 21,728 21,165
Prepayments 1,022,105 1,240,224
2,900,162 5,167,808

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
£    £   
Bank loans and overdrafts (see note 14) 303,651 1,098,204
Hire purchase contracts (see note 15) 111,685 112,299
Trade creditors 2,549,573 2,810,194
Corporation tax 50,883 -
Social security and other taxes 135,725 261,251
VAT 1,035,797 598,566
Other creditors 37,172 1,084,550
Accruals and deferred income 814,007 841,862
5,038,493 6,806,926

13. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2022 2021
£    £   
Bank loans (see note 14) 1,382,033 3,299,517
Hire purchase contracts (see note 15) 324,298 162,680
Directors' loan accounts 1,397,347 -
3,103,678 3,462,197

Directors' loan accounts are unsecured. Interest is payable at a rate of 10%.

14. LOANS

An analysis of the maturity of loans is given below:

2022 2021
£    £   
Amounts falling due within one year or on demand:
Bank loans 303,651 1,098,204

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


14. LOANS - continued
2022 2021
£    £   
Amounts falling due between two and five years:
Bank loans - 2-5 years 1,382,033 3,299,517

15. LEASING AGREEMENTS

Minimum lease payments under hire purchase fall due as follows:

2022 2021
£    £   
Net obligations repayable:
Within one year 111,685 112,299
Between one and five years 324,298 162,680
435,983 274,979

16. SECURED DEBTS

The following secured debts are included within creditors:

2022 2021
£    £   
Bank loans 1,685,684 4,397,721
Hire purchase contracts 435,983 274,979
2,121,667 4,672,700

Bank loans and overdrafts are secured by way of a fixed and floating charge over the assets of the company.

Obligations under hire purchase contracts are secured on the assets to which they relate.

17. PROVISIONS FOR LIABILITIES
2022 2021
£    £   
Deferred tax 802,827 291,617

Deferred
tax
£   
Balance at 1 January 2022 291,617
Charge to Income Statement during year 511,210
Balance at 31 December 2022 802,827

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number: Class: Nominal 2022 2021
value £ £
50 A Ordinary £1 50 50
50 B Ordinary £1 50 50
14,900 C Ordinary £1 14,900 14,900
5,000 D Ordinary £1 5,000 5,000
20,000 20,000

19. RESERVES
Retained Share
earnings premium Totals
£    £    £   

At 1 January 2022 940,648 1,317,040 2,257,688
Profit for the year 2,207,143 2,207,143
At 31 December 2022 3,147,791 1,317,040 4,464,831

20. PENSION COMMITMENTS

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. £38,278 (2021 - £24,190) contributions were outstanding at the balance sheet date.

21. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

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

2022 2021
£    £   
E T Davies
Balance outstanding at start of year 70,421 68,684
Amounts advanced 1,676 1,737
Amounts repaid (72,097 ) -
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year - 70,421

£Nil dividends were paid in the year in respect of shares held by the company's directors.

At the balance sheet date, the amount owed by a director to the company was £0, (2021 - £70,421).
Interest was charged at a rate of 2.5%.

EDWARD DAVIES COMMERCIALS LIMITED (REGISTERED NUMBER: 03880838)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022


22. ULTIMATE CONTROLLING PARTY

The parent company is EDI Holdings Limited, a company registered in England and Wales. The registered office is Wentwood House, Langstone Business Park, Newport, NP18 2HJ.

The ultimate controlling party is the director, Mr E Davies.