Company registration number 02218034 (England and Wales)
R & M ELECTRICAL GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
R & M ELECTRICAL GROUP LIMITED
COMPANY INFORMATION
Directors
Mr T Coomer
Mr W Crook
Mr B Reufels
Mr D A Robinson
Mr P Stiehl
(Appointed 1 January 2023)
Mr N Robinson
(Appointed 9 April 2024)
Secretary
Mr W Crook
Company number
02218034
Registered office
Units 1 & 2
362a Spring Road
Sholing
Southampton
Hampshire
SO19 2PB
Auditor
Fiander Tovell Limited
Stag Gates House
63/64 The Avenue
Southampton
Hampshire
SO17 1XS
R & M ELECTRICAL GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditor's report
8 - 10
Group profit and loss account
11
Group statement of comprehensive income
12
Group balance sheet
13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the financial statements
18 - 42
R & M ELECTRICAL GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Business review and future developments

The Directors are delighted to report another record year in both Turnover and Profitability.

 

Sales were £147.710m, a 9.26% increase when compared with the previous year whilst the Gross Profit margin improved to 20.83% (2022: 19.49%). Total gross profit was £30.564m.

 

Across all of our core market sectors we experienced good growth and major project wins. We also continued our expansion into the Caribbean and South America.

 

We took the opportunity to close the Electrical Showroom (B2C online business) and dispose of our Oxford branch with both being non-core and loss making.

 

Our Fixings division continued its success particularly in the data centre and offsite fabrication sector. Their wholly owned subsidiary in the Netherlands, R & M Europe BV, maintained its growth and expanded its product range within its market.

R & M Lumen Electrical Inc carried on thriving in the US cruise sector market.

 

Our Joint Ventures in Dubai and Iraq made another record return.

 

To facilitate this growth Distribution and Administrative expenses were £21.994m which represents a 20.00% increase with the corresponding twelve months. This is also a reflection of the inflationary times the whole worldwide economy has suffered.

 

Whilst the Group maintains a tight control over its Overheads it recognises the need to make investment to maintain the service levels that our customers deserve and to grow the business in the future. This strategy has been well rewarded with our growth in recent years.

 

The Net Profit after tax for the Financial Year was £6.446m (2022 - £6.277m).

 

Our Balance Sheet strength has been consolidated with Net Assets of £21.197m (2022 - £18.006m).

 

Net Current Assets have increased by £2.988m (from £16.714m to £19.702m) whilst Creditors falling Due in Over One Year have increased by £82k (from £84k to £166k).

 

Stock and Trade Creditors have increased in tandem whilst it is pleasing to note the fall in Trade Debtors.

R & M ELECTRICAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Cash remains tightly controlled and it is pleasing to see the positive balance improving at £15.571m (2022- £6.761m) which enables the Group to honour its commitments and reinvest in the business. This is despite making Dividend payments of £3.690m (2022 - £1.399m).

 

We continue to enjoy considerable headroom in borrowing facilities. We are therefore well positioned to maintain excellent supplier relationships and capitalise on any opportunities that may arise.

 

Whilst 2023 was an excellent year the Company now has the momentum to surpass these results and is trading in markets where demand is going to be strong irrespective of the wider economic picture. 2024 promises to be an exciting year where we will prosper owing to our increasing diversification and foothold in new markets.

 

This will be achieved because of our.

 

    - 37 Year Track Record

    - We are independent and privately owned

    - We are fully accredited and compliant

    - In-house specialist divisions

    - Industry specialists

    - Outstanding staff retention

    - Global footprint and global buying power

    - Innovative and “Can Do" attitude

    - Long term trading partnerships with our suppliers who are all market leaders

    - Continued investment in the latest IT products to support the business

    - Financial strength and headroom in facilities

    - Credit worthiness

Key performance indicators

The key financial performance indicators that management and directors use to monitor the performance of the Group are turnover and profitability, which are commented on above. The key non-financial performance indicators used to monitor the Group's performance are.

 

    - Customer deliveries (99% to be delivered with no issues)

    - Supplier deliveries (95% to be delivered within expected deadlines)

    - Carbon footprint (5% reduction in gas and electricity every year)

    - Paper usage (reduce by 5% per year)

    - IT WEEE recycled (80% to be reused/recycled)

    - COZ emissions (reduce Company fleet omissions by 5% per annum)

    - General waste (prevent 90% from being disposed on landfill)

- Zero environmental incidents regarding contamination of land and water by controlled waste

    - Staff turnover

    - Sickness

    - External training and skilled internal staff training

    - Accidents at work

 

Management and directors have monitored the above during the year and are satisfied with the performance against these.

R & M ELECTRICAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Other performance indicators

The Group's principal financial instruments are cash, trade debtors and trade creditors.

The Group continues to manage its cash and borrowing requirements centrally to minimise interest expenses whilst ensuring that the Group has sufficient liquid resources to meet the operational needs of the business.

 

This includes the use of invoice discounting as detailed in Note 19.

 

The Group controls its exposure to credit risks by regularly reviewing customers' accounts and limits and by only granting terms to those whom are credit worthy. Credit reference agencies are used, and credit insurance is used to insure debts.

 

The Group's foreign currency exposure arises from the export of goods. The Group is not that dependent on sales from Europe. The Group counter currency fluctuations by naturally hedging by buying and selling in the same currency and will look to take forward option contracts when this is not possible.

 

The market is very competitive, and the group is committed to maintaining its competitive pricing position and keeping the very high standards of customer service. The Group also continues to build upon its strong relationships with its suppliers.

 

The Group has continued to ensure that our operational costs remain at a sustainable level whilst not affecting our ability to service our customers. We believe that by taking these measures we are in a lean position to be able to react to any additional changes in the marketplace.

Employee involvement

We continue to invest in human resources, health and safety and our quality departments to satisfy legislation and protect our employees. The Group has good employee retention and the risk of losing key employees is reduced by offering good remuneration, training and a pleasant working environment.

 

The Board appreciates that the staff are key to the continued success of the Group. It is the policy of the Group to encourage and develop all members of staff to realise their maximum potential. Wherever possible, vacancies are filled from within the Group and adequate opportunities for internal promotion are created.

 

The Group supports the principle of equal opportunities in employment and opposes all forms of unlawful or unfair discrimination on the grounds of race, age, nationality, religion, ethnic or national origin, sexual orientation, gender, or gender reassignment, marital status or disability. It is also the policy of the Group, where possible, to consider disabled persons in their application for employment with the Group and to protect the interests of existing members of the staff who are disabled.

Environmental matters

The Group is committed to the care of the environment and the prevention of pollution. The group has an ISO 14001:2015 accreditation as further evidence of its focus on environmental matters.

 

The organisation is cognisant of the effect of business decisions on the environment and, where possible, optimises environmentally friendly decisions, making sure that all activities are carried out in confidence with the relevant environmental legislation.

 

The organisation seeks to minimise waste generation, promote recycling, reduce energy consumption, reduce harmful emissions and, where possible, to work with suppliers who themselves have sound environmental policies. The Group is committed to improving environmental performance by setting annual environmental improvement objectives and targets these are regularly monitored, reviewed, and audited against the ISO 14001:2015 standard. Our Environmental Policy, Waste Management Policy and Quality & Environmental Manual are publicised for employees as controlled documents. All employees are also actively encouraged to identify any issues in areas immediately and proffer continual improvement ideas.

 

Further details of the new reporting for this period on emissions and energy consumption is given in the directors' report.

R & M ELECTRICAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

Section 172 Statement

Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters in their decision making.

 

The Directors continue to have regard to the interests of the Groups employees and other stakeholders, the impact of its activities on the community, the environment, and the Groups reputation for good business conduct, when making decisions.

 

The Directors are fully aware of their responsibilities to promote the success of the Group in accordance with section 172 of the Companies Act 2006, and to act in good faith and fairly.

 

The Board regularly reviews the Group’s principal stakeholders and how it engages with them. This is achieved through information provided by management and by direct engagement with stakeholders themselves.

We aim to work responsibly with our stakeholders, including suppliers. The Board has recently reviewed its anti-corruption and anti-bribery, equal opportunities, and whistleblowing policies.

On behalf of the board

Mr T Coomer
Director
18 April 2024
R & M ELECTRICAL GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Results and dividends

The Profit for the period, after Taxation, amounted to £6,446,713 (2022 - £6,277,094)

 

Total Dividends of £3,690,450 (2022 - £1,399,467) were paid in the year.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr T Coomer
Mr W Crook
Mr B Reufels
Mr D A Robinson
Mr P Stiehl
(Appointed 1 January 2023)
Mr N Robinson
(Appointed 9 April 2024)
Qualifying third party indemnity provisions

Qualifying third party indemnity provisions (as defined in section 234(2) of the Companies Act 2006) are in force for the benefit of the directors and former directors who held office during the year ended 31 December 2023.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Post reporting date events

On 29th February 2024 the Company completed a long-term Lease for a New Corporate HQ in Chandlers Ford which they will occupy in June 2024 once it has had a bespoke refurbishment. There are also plans to boost our Senior Management Team with some internal promotions. This demonstrates our commitment to further business growth and our confidence in the business.

Auditor

The auditor, Fiander Tovell, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

R & M ELECTRICAL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Energy and carbon report

As required by The Companies (Directors’ Report) and Limited Liability Partnership (Energy and Carbon Report) Regulations 2018, the directors have collated the required disclosure information below. This includes information related only to the members of the group which are both defined as large companies and consume more than 40,000 kWh of energy annually. The only member of the group which meets this criteria is R & M Electrical Group Limited who have prepared financial statements for the year ended 31 December 2023.

 

However, exemption has been taken from disclosing this information in their financial statements as this is included in these consolidated Group accounts instead.

 

In the period, the group implemented several energy efficiency measures including changing our head office lighting to LED, installation of light reactive lighting and changing a significant proportion of our fleet to hybrid motor vehicles.

 

In the year to 31 December 2023, the Group’s UK Energy use was 1,520,222 kWh (2022 - 1,561,431 kWh) and its associated greenhouse gas emissions was 353 Tonnes CO2 equivalent (2022: 358 Tonnes CO2 equivalent). Intensity metrics for emissions for the period were 4.42 (2022 - 4.49) Tonnes per total £m turnover and 1.81 (2022 - 1.84) Tonnes per employee. The figures were calculated from usage data for electricity, gas and fuel with use of government fuel conversion factors where required.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

 

 

Matters covered in the strategic report

Key performance indicators and a business review for the year ending 31 December 2022 are disclosed in the Strategic Report as required by s414C(11) of Companies Act 2006.

R & M ELECTRICAL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
On behalf of the board
Mr T Coomer
Director
18 April 2024
R & M ELECTRICAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF R & M ELECTRICAL GROUP LIMITED
- 8 -
Opinion

We have audited the financial statements of R & M Electrical Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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, 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 group's and 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

R & M ELECTRICAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF R & M ELECTRICAL GROUP LIMITED
- 9 -
Matters on which we are required to report by exception

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.

 

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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 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.

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

R & M ELECTRICAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF R & M ELECTRICAL GROUP LIMITED
- 10 -

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.

Andrew Jay ACA FCCA (Senior Statutory Auditor)
For and on behalf of Fiander Tovell Limited
19 April 2024
Chartered Accountants
Statutory Auditor
Stag Gates House
63/64 The Avenue
Southampton
Hampshire
SO17 1XS
R & M ELECTRICAL GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
146,710,448
134,277,644
Cost of sales
(116,146,126)
(108,103,592)
Gross profit
30,564,322
26,174,052
Distribution costs
(1,240,709)
(1,134,607)
Administrative expenses
(20,753,352)
(17,193,316)
Other operating income
62,527
-
Operating profit
4
8,632,788
7,846,129
Share of profits of joint ventures
271,776
227,977
Interest receivable and similar income
8
48,412
28
Interest payable and similar expenses
9
(620,180)
(358,100)
Profit before taxation
8,332,796
7,716,034
Tax on profit
10
(1,886,083)
(1,438,940)
Profit for the financial year
29
6,446,713
6,277,094
Profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

R & M ELECTRICAL GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
£
£
Profit for the year
6,446,713
6,277,094
Other comprehensive income
Currency translation loss taken to retained earnings
(93,356)
(100,190)
Cash flow hedges gain/(loss) arising in the year
704,839
(459,751)
Tax relating to other comprehensive income
(176,210)
114,938
Other comprehensive income for the year
435,273
(445,003)
Total comprehensive income for the year
6,881,986
5,832,091
Total comprehensive income for the year is all attributable to the owners of the parent company.
R & M ELECTRICAL GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
-
0
9,325
Tangible assets
13
958,862
704,683
Investments
14
934,057
662,281
1,892,919
1,376,289
Current assets
Stocks
18
18,689,457
15,475,370
Debtors - deferred tax
23
-
35,458
Debtors - other
19
22,894,208
28,033,237
Cash at bank and in hand
15,571,341
6,760,829
57,155,006
50,304,894
Creditors: amounts falling due within one year
20
(37,453,309)
(33,590,981)
Net current assets
19,701,697
16,713,913
Total assets less current liabilities
21,594,616
18,090,202
Creditors: amounts falling due after more than one year
21
(165,996)
(84,341)
Provisions for liabilities
Deferred tax liability
23
231,223
-
0
(231,223)
-
Net assets
21,197,397
18,005,861
Capital and reserves
Called up share capital
25
8,201
8,201
Share premium account
26
198,528
198,528
Hedging reserve
27
183,816
(344,813)
Capital redemption reserve
28
5,439
5,439
Profit and loss reserves
29
20,801,413
18,138,506
Total equity
21,197,397
18,005,861
The financial statements were approved by the board of directors and authorised for issue on 18 April 2024 and are signed on its behalf by:
18 April 2024
Mr T Coomer
Director
Company registration number 02218034 (England and Wales)
R & M ELECTRICAL GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 14 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
-
0
9,325
Tangible assets
13
611,446
446,517
Investments
14
1,891,947
1,891,864
2,503,393
2,347,706
Current assets
Stocks
18
14,560,507
10,045,807
Debtors
19
19,663,564
24,306,645
Cash at bank and in hand
9,932,339
2,864,088
44,156,410
37,216,540
Creditors: amounts falling due within one year
20
(31,107,482)
(25,499,373)
Net current assets
13,048,928
11,717,167
Total assets less current liabilities
15,552,321
14,064,873
Creditors: amounts falling due after more than one year
21
(128,772)
(59,531)
Provisions for liabilities
Deferred tax liability
23
176,453
(62,075)
(176,453)
62,075
Net assets
15,247,096
14,067,417
Capital and reserves
Called up share capital
25
8,201
8,201
Share premium account
26
198,528
198,528
Hedging reserve
27
183,816
(344,813)
Capital redemption reserve
28
5,439
5,439
Profit and loss reserves
29
14,851,112
14,200,062
Total equity
15,247,096
14,067,417

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £4,341,500 (2022 - £3,946,370 profit).

The financial statements were approved by the board of directors and authorised for issue on 18 April 2024 and are signed on its behalf by:
18 April 2024
Mr T Coomer
Director
Company registration number 02218034 (England and Wales)
R & M ELECTRICAL GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Share premium account
Hedging reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2022
8,201
198,528
-
0
5,439
13,410,982
13,623,150
Year ended 31 December 2022:
Profit for the year
-
-
-
-
6,277,094
6,277,094
Other comprehensive income:
Currency translation differences
-
-
-
-
(100,190)
(100,190)
Cash flow hedges gains
-
-
(459,751)
-
-
(459,751)
Tax relating to other comprehensive income
-
-
114,938
-
-
0
114,938
Total comprehensive income
-
-
(344,813)
-
6,176,904
5,832,091
Dividends
11
-
-
-
-
(1,399,467)
(1,399,467)
Transfers
-
-
-
-
(49,913)
(49,913)
Balance at 31 December 2022
8,201
198,528
(344,813)
5,439
18,138,506
18,005,861
Year ended 31 December 2023:
Profit for the year
-
-
-
-
6,446,713
6,446,713
Other comprehensive income:
Currency translation differences
-
-
-
-
(93,356)
(93,356)
Cash flow hedges gains
-
-
704,839
-
-
704,839
Tax relating to other comprehensive income
-
-
(176,210)
-
-
0
(176,210)
Total comprehensive income
-
-
528,629
-
6,353,357
6,881,986
Dividends
11
-
-
-
-
(3,690,450)
(3,690,450)
Balance at 31 December 2023
8,201
198,528
183,816
5,439
20,801,413
21,197,397
R & M ELECTRICAL GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Share premium account
Hedging reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2022
8,201
198,528
-
0
5,439
11,653,159
11,865,327
Year ended 31 December 2022:
Profit for the year
-
-
-
-
3,946,370
3,946,370
Other comprehensive income:
Cash flow hedges gains
-
-
(459,751)
-
-
(459,751)
Tax relating to other comprehensive income
-
-
114,938
-
-
0
114,938
Total comprehensive income
-
-
(344,813)
-
3,946,370
3,601,557
Dividends
11
-
-
-
-
(1,399,467)
(1,399,467)
Balance at 31 December 2022
8,201
198,528
(344,813)
5,439
14,200,062
14,067,417
Year ended 31 December 2023:
Profit for the year
-
-
-
-
4,341,500
4,341,500
Other comprehensive income:
Cash flow hedges gains
-
-
704,839
-
-
704,839
Tax relating to other comprehensive income
-
-
(176,210)
-
-
0
(176,210)
Total comprehensive income
-
-
528,629
-
4,341,500
4,870,129
Dividends
11
-
-
-
-
(3,690,450)
(3,690,450)
Balance at 31 December 2023
8,201
198,528
183,816
5,439
14,851,112
15,247,096
R & M ELECTRICAL GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
35
14,920,623
6,785,587
Interest paid
(620,180)
(358,100)
Income taxes paid
(2,152,850)
(694,939)
Net cash inflow from operating activities
12,147,593
5,732,548
Investing activities
Purchase of tangible fixed assets
(269,342)
(284,535)
Proceeds from disposal of tangible fixed assets
42,686
51,547
Proceeds from disposal of associates
-
(525)
Interest received
48,412
28
Net cash used in investing activities
(178,244)
(233,485)
Financing activities
Reduction of subscribed capital
-
(49,913)
Repayment of borrowings
4,471
5,888
Payment of finance leases obligations
(84,341)
28,179
Dividends paid to equity shareholders
(3,690,450)
(1,399,467)
Net cash used in financing activities
(3,770,320)
(1,415,313)
Net increase in cash and cash equivalents
8,199,029
4,083,750
Cash and cash equivalents at beginning of year
6,760,829
3,237,020
Effect of foreign exchange rates
611,483
(559,941)
Cash and cash equivalents at end of year
15,571,341
6,760,829
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
1
Accounting policies
Company information

R & M Electrical Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Units 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB.

 

The group consists of R & M Electrical Group Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company R & M Electrical Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. In addition, the Strategic Report includes the Group's objectives, policies, and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to the credit risk and liquidity risk.

 

The Group has considerable financial resources together with long term relationships with customers and suppliers across different geographic areas and industries. As a consequence, the directors believe that the Group is well placed and diversified to manage its business risks.

 

The Group and its parent company (International Electrical Investments Limited) has the financial support of its Shareholders who have injected a substantial working Capital Loan. They also enjoy the support of its Bankers with various facilities in place and invoice discounting arrangements in subsidiary companies.

 

Since the year end the Group has remained extremely profitable and has continued to operate comfortably within its current bank facilities with plenty of headroom.

 

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -

In addition, the Directors have produced detailed going concern Forecasts for the Group covering the period to 30 June 2025. These models show continued strong Turnover which can be justified by actual trading to date in 2024 and a back-order book at record levels compared with historical trends.

 

These Forecasts indicate that the facilities in place provide sufficient headroom when compared to the cash requirements of the Group for the period twelve months from approval of the financial statements.

 

Therefore, the Directors have concluded it is appropriate for the Financial Statements to be prepared on a Going Concern basis as they remain confident that the Group will continue to trade successfully. Whilst the World economy is entering a very uncertain period it is reassuring to know that R & M Electrical Group Ltd operates in markets that are buoyant because of the world’s problems and no downturn in demand is foreseen. They also have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

1.5
Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sales of goods

Turnover from the sale of goods is recognised when all the of the following conditions are satisfied:

Interest income

Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.

1.6
Intangible fixed assets - goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and acquirer's interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
Straight line over 3 years
Customer relationships
Straight line over 5 years
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.8
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
Over the length of the lease
Plant and equipment
12.5% straight line
Fixtures and fittings
12.5% straight line
Computers
33% straight line
Motor vehicles
20% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.10
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
Cash and cash equivalents

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.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.13
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 24 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

Hedge accounting

The group designates certain hedging instruments to mitigate their exposure to movements in foreign exchange rates. These include forward contracts and time options which are designated and qualify as cash flow hedges.

 

At the inception of the hedge relationship, the company documents the relationship between the hedging instrument and the hedged item along with risk management objectives and strategy for undertaking various hedge transactions. At the inception of the hedge and on an ongoing basis, the company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income.

 

The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the 'other gains and losses' line in this item.

 

Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognised in the profit or loss in the same line as of the income statement as the recognised hedged item. However when the forecast transaction that is hedged results in the recognition of a non-financial asset or liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability concerned.

1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 25 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.18
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 26 -
1.19
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 

On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at the opening rate and the results of overseas operations at the actual rate are recognised in other comprehensive income.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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 that 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Operating and finance lease determination

Management determine whether leases entered into by the Group either as a lessor or lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on the lease by lease basis.

Fixed asset impairment

Management determine whether there are indicators of impairment of the Group's tangible and intangible assets, including goodwill and the Company's investments. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

Stock provisioning

Management have considered whether there are any indications that stock may have suffered an impairment at the reporting date as required by FRS102. Management review the ageing of individual stock items held at the year end and assign a proportionate level of provision against those stock lines that are considered aged.

Bad debt provisioning

Management have considered whether there are any indications that trade debtors have suffered an impairment at the reporting date as required by FRS102. Management regularly review those balances that are overdue based upon the credit terms in place and provide against those where a material uncertainty exists that the amounts may not be recovered.

Impairment of loan due from associate

Management have considered whether there are any indications that loans due from associates (included in other debtors) may have suffered an impairment at the reporting date as required by FRS102. Management review the recoverability of loans receivable on a regular basis taking into account the expected future performance of the associate and the likelihood of repayment in the next 12 months. Provisions are made where material uncertainty exists that amounts may not be recovered.

 

Property dilapidations and onerous leases

Under certain operating leases for land and buildings, the group is obligated to make repairs of dilapidations to the leased property upon the expiry of the lease. The group charges amounts to profit and loss so that, by the end of the lease, a total provision is accrued that is estimated to be equal to the future costs of those dilapidations obligations.

 

Where repairs are made part way through the lease that will reduce the estimated costs of dilapidation obligations at the expiry of the lease, the costs of those reports are charged against the dilapidations provision.

 

Where leased properties are committed to be vacated, the group provides for the best estimate of the future unreconcilable costs of its obligations under those leases.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 28 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Intangible fixed assets

Determining whether the acquired intangible fixed assets are identifiable in terms of being separable and arise from contractual or legal rights has limited judgement as the intangibles concerned mainly relate to separate customer contacts/ relationships. Customer relationships are amortised over the expected life of the underlying contract.

Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Investments

Impairment reviews have been undertaken in the current year to assess the carrying value of the investments in subsidiaries and joint ventures. Judgement which was limited given the prudent discount factor, growth rate and sensitivity analysis used in the review showed there was significant headroom before an impairment was necessary.

3
Turnover and other revenue

The whole of the turnover is attributable to the principal activity of the group.

2023
2022
£
£
Other revenue
Interest income
48,412
28

In the opinion of the directors, the disclosure of separate segmental information in accordance with FRS 102 would be prejudicial to the interests of the group.

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
413,918
(352,172)
Depreciation of owned tangible fixed assets
247,117
183,456
Profit on disposal of tangible fixed assets
(6,035)
(12,993)
Amortisation of intangible assets
9,325
29,388
Stocks impairment losses recognised or reversed
658,663
845,635
Operating lease charges
1,841,367
1,636,658
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
54,554
48,318
Audit of the financial statements of the company's subsidiaries
19,996
19,250
74,550
67,568
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Administration
87
62
-
-
Distribution
186
174
186
174
Total
273
236
186
174

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
12,381,410
10,815,440
9,004,570
7,970,472
Social security costs
1,219,241
1,046,769
757,354
665,539
Pension costs
348,121
316,591
286,143
253,851
13,948,772
12,178,800
10,048,067
8,889,862
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
929,475
1,056,533
Company pension contributions to defined contribution schemes
25,856
29,230
955,331
1,085,763

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 30 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
430,931
469,916
Company pension contributions to defined contribution schemes
10,776
12,600
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
48,412
2
Other interest income
-
26
Total income
48,412
28
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
488
538
Interest on invoice finance arrangements
383,683
222,750
Interest on finance leases and hire purchase contracts
18,612
8,097
Other interest
217,397
126,715
Total finance costs
620,180
358,100
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,820,691
1,431,152
Adjustments in respect of prior periods
(25,083)
-
0
Other taxes
2
4
Total current tax
1,795,610
1,431,156
Deferred tax
Origination and reversal of timing differences
90,473
7,205
Previously unrecognised tax loss, tax credit or timing difference
-
0
579
Total deferred tax
90,473
7,784
Total tax charge
1,886,083
1,438,940
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 31 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
8,332,796
7,716,034
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,959,874
1,466,046
Tax effect of expenses that are not deductible in determining taxable profit
139,262
30,583
Tax effect of income not taxable in determining taxable profit
(102,400)
(45,397)
Adjustments in respect of prior years
(25,083)
(579)
Effect of change in corporation tax rate
-
3,879
Group relief
(83,038)
-
0
Permanent capital allowances in excess of depreciation
(2,532)
(4,484)
Foreign tax
-
0
(11,108)
Taxation charge
1,886,083
1,438,940

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Revaluation of financial instruments treated as cash flow hedges
176,210
(114,938)
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
3,690,450
1,399,467
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
12
Intangible fixed assets
Group
Goodwill
Software
Customer relationships
Total
£
£
£
£
Cost
At 1 January 2023 and 31 December 2023
74,125
88,158
559,909
722,192
Amortisation and impairment
At 1 January 2023
74,125
78,833
559,909
712,867
Amortisation charged for the year
-
0
9,325
-
0
9,325
At 31 December 2023
74,125
88,158
559,909
722,192
Carrying amount
At 31 December 2023
-
0
-
0
-
0
-
0
At 31 December 2022
-
0
9,325
-
0
9,325
Company
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
74,125
88,158
162,283
Amortisation and impairment
At 1 January 2023
74,125
78,833
152,958
Amortisation charged for the year
-
0
9,325
9,325
At 31 December 2023
74,125
88,158
162,283
Carrying amount
At 31 December 2023
-
0
-
0
-
0
At 31 December 2022
-
0
9,325
9,325
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
13
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
141,317
299,575
690,075
520,798
461,740
2,113,505
Additions
5,400
68,268
-
0
108,947
355,332
537,947
Disposals
-
0
-
0
(179,302)
(10,561)
(111,772)
(301,635)
At 31 December 2023
146,717
367,843
510,773
619,184
705,300
2,349,817
Depreciation and impairment
At 1 January 2023
47,356
152,855
552,929
483,725
171,957
1,408,822
Depreciation charged in the year
21,138
48,199
70,044
2,361
105,375
247,117
Eliminated in respect of disposals
-
0
-
0
(175,615)
(10,561)
(78,808)
(264,984)
At 31 December 2023
68,494
201,054
447,358
475,525
198,524
1,390,955
Carrying amount
At 31 December 2023
78,223
166,789
63,415
143,659
506,776
958,862
At 31 December 2022
93,961
146,720
137,146
37,073
289,783
704,683
Company
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
93,527
216,593
669,417
422,053
242,131
1,643,721
Additions
5,400
46,302
-
0
106,238
176,210
334,150
Disposals
-
0
-
0
(179,302)
(10,561)
(53,591)
(243,454)
At 31 December 2023
98,927
262,895
490,115
517,730
364,750
1,734,417
Depreciation and impairment
At 1 January 2023
30,124
94,410
542,891
422,053
107,726
1,197,204
Depreciation charged in the year
16,914
29,099
67,685
1,348
47,559
162,605
Eliminated in respect of disposals
-
0
-
0
(175,615)
(10,561)
(50,662)
(236,838)
At 31 December 2023
47,038
123,509
434,961
412,840
104,623
1,122,971
Carrying amount
At 31 December 2023
51,889
139,386
55,154
104,890
260,127
611,446
At 31 December 2022
63,403
122,183
126,526
-
0
134,405
446,517
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Tangible fixed assets
(Continued)
- 34 -

The net carrying value of Vehicles for the group includes an amount of £406,559 (2022 - £225,340) in respect of assets held under finance leases or hire purchase contracts.

 

The net carrying value of Plant and Equipment for the group includes an amount of £42,920 (2022 - £4,959) in respect of assets held under finance leases or hire purchase contracts.

14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
1,891,947
1,891,864
Investments in associates
16
782
782
-
0
-
0
Investments in joint ventures
17
933,275
661,499
-
0
-
0
934,057
662,281
1,891,947
1,891,864
Movements in fixed asset investments
Group
Shares in associates and joint ventures
£
Cost or valuation
At 1 January 2023
662,281
Share of profits
271,776
At 31 December 2023
934,057
Carrying amount
At 31 December 2023
934,057
At 31 December 2022
662,281
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
1,891,864
Additions
83
At 31 December 2023
1,891,947
Carrying amount
At 31 December 2023
1,891,947
At 31 December 2022
1,891,864
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
R&M (Fixings & Support) Limited
Units 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB, UK
Ordinary
100.00
-
R&M Electrical Investments Limited
Units 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB, UK
Ordinary
100.00
-
R&M Electrical LLP
123 B M.Utemsiov Street, Atyrou, 06005, Kazakhstan
Ordinary
100.00
-
R&M Lumen Electrical Inc
12099 NW 98th Avenue, Hialeah Gardens, FL 33018, USA
Ordinary
100.00
-
R&M Electrical (Exports) Limited
Units 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB, UK
Ordinary
100.00
-
R&M Electrical LLC
5th Floor, Hagani Business Centre, 1 Hagani Street, Baku, AZE 1010, Azerbaijan
Ordinary
100.00
-
R&M Cables Limited
Units 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB, UK
Ordinary
100.00
-
R&M Electrical (Oxford) Limited
Units 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB, UK
Ordinary
100.00
-
R&M Europe B.V.
Industrieweg 69, Middenmeer, The Netherlands 1775 PV
Ordinary
-
100.00
R&M Electrical Group (Trinidad) Ltd
5-7 Sweet Briar Road, St Clair, Newtown, 19013, Trinidad
Ordinary
100.00
-
R&M Electrical India PVT Ltd
5th Floor, A-501L, Jaswanti Allied Business Centre, Mumbai-400064, India
Ordinary
0.01
99.99
16
Associates

Details of associates at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
R&M SN Electric FZCO
TPOFCBOO12, Jebel Ali, Dubai, Dubai, United Arab Emerates, PO Box 282144
Ordinary
50
Siraj Naybur
Abbasiya, Basrah, Iraq
Ordinary
50
17
Joint ventures

Details of joint ventures at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
R&M Wholesale Electric LLC
PO Box 282566, m-03, AI Joud Centre, Al Quoz 1, Dubai, UAE
Ordinary
50.00
18
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
18,689,457
15,475,370
14,560,507
10,045,807
R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Stocks
(Continued)
- 36 -

In the Group, an impairment charge of £658,663 (2022: £845,635) was recognised in cost of sales during the year.

 

In the Company, an impairment charge of £646,335 (2022: £545,153) was recognised in cost of sales during the year.

19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
20,195,867
25,252,913
14,801,087
17,436,191
Amounts owed by group undertakings
304,541
494,233
2,587,451
5,137,718
Other debtors
1,591,832
1,540,512
1,770,376
1,293,162
Prepayments and accrued income
801,968
745,579
504,650
439,574
22,894,208
28,033,237
19,663,564
24,306,645
Deferred tax asset (note 23)
-
0
35,458
-
0
-
0
22,894,208
28,068,695
19,663,564
24,306,645

Amounts owed by Group companies are unsecured, interest free and repayable on demand.

The Group operates an invoice discounting arrangement. The main terms of the agreement are as follows:

 

The Group acting as trustees for the invoice discounter, collects the remittances and banks them in a separate bank account which is maintained by the invoice discounter. All amounts held in this account are shown as a liability within creditors: amounts falling due within one year.

 

Invoice discounting charges recognised during the year were:

 

Administration charges: £25,008 (2022 - £25,008).

 

Discounting charges: £346,403 (2022 - £178,740).

 

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases and hire purchase contracts
22
182,051
79,442
133,387
45,716
Other borrowings
60,920
56,449
60,920
56,449
Trade creditors
22,400,726
21,738,667
18,727,517
16,293,846
Amounts owed to group undertakings
1,200,344
1,195,756
1,274,181
1,628,841
Corporation tax payable
918,409
1,275,647
667,480
932,207
Other taxation and social security
370,310
489,846
208,414
173,080
Other creditors
7,517,453
3,976,336
6,037,243
3,108,055
Accruals and deferred income
4,803,096
4,778,838
3,998,340
3,261,179
37,453,309
33,590,981
31,107,482
25,499,373

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

21
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance lease and hire purchase contracts
22
165,996
84,341
128,772
59,531
22
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
182,051
79,442
133,387
45,716
In two to five years
165,996
84,341
128,772
59,531
348,047
163,783
262,159
105,247

Obligations under hire purchase and finance leases are secured on the assets concerned.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
23
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
168,011
119,709
-
-
Investments
(183,816)
(114,937)
-
-
Other short term timing differences
247,028
(4,772)
-
35,458
231,223
-
-
35,458
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
Accelerated capital allowances
113,241
93,092
-
-
Investments
(183,816)
(114,937)
-
-
Other short term timing differences
247,028
(40,230)
-
-
176,453
(62,075)
-
-
Group
Company
2023
2023
Movements in the year:
£
£
Asset at 1 January 2023
(35,458)
(62,075)
Charge to profit or loss
90,472
62,319
Charge to other comprehensive income
176,209
176,209
Liability at 31 December 2023
231,223
176,453
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
348,121
316,591

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Contributions totalling £60,920 (2022 - £57,069) were payable to the fund at the reporting date and are included in creditors.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 39 -
25
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
5,200
5,200
5,200
5,200
Ordinary B of £1 each
613
613
613
613
Ordinary C of £1 each
2,388
2,388
2,388
2,388
8,201
8,201
8,201
8,201

The share classes rank pari passu.

26
Share premium account
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning and end of the year
198,528
198,528
198,528
198,528

The share premium reserve represents the amounts received upon the issue of share capital over the nominal value of the shares.

27
Hedging reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
(344,813)
-
0
(344,813)
-
0
Gains and losses on cash flow hedges
704,839
(459,751)
704,839
(459,751)
Tax on gains and losses on cash flow hedges
(176,210)
114,938
(176,210)
114,938
At the end of the year
183,816
(344,813)
183,816
(344,813)

The Group have purchased forward foreign currency contracts to hedge against unfavourable movements in foreign exchange rates. The hedging reserve shows the fair value of the future at the year end date. Movements in the reserve are recognised via the other comprehensive income statement.

28
Capital redemption reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning and end of the year
5,439
5,439
5,439
5,439

The capital redemption reserve arose from the repurchase of the company's own shares.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 40 -
29
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
18,138,506
13,410,982
14,200,062
11,653,159
Profit for the year
6,446,713
6,277,094
4,341,500
3,946,370
Dividends
(3,690,450)
(1,399,467)
(3,690,450)
(1,399,467)
Transfer to reserves
-
(49,913)
-
-
Currency translation differences
(93,356)
(100,190)
-
0
-
0
At the end of the year
20,801,413
18,138,506
14,851,112
14,200,062

Profit and loss reserves represents the cumulative profits and losses made by the Group since its inception.

30
Financial commitments, guarantees and contingent liabilities

The ultimate controlling party, Niedax Galvanik GmbH and International Electrical Investments Limited entered into a Composite Group Guarantee and Debenture on 23 December 2021. The assets of the Group are secured by fixed and floating charges.

 

The company has set up a number of bonds via their bank, at 31 December 2023 the potential liability in relation to these bonds totalled £545,800 (2022 - £1,078,333), the likelihood of these bonds becoming payable is extremely low.

31
Operating lease commitments
Lessee

At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
977,824
894,075
688,334
601,192
Between two and five years
1,514,310
1,674,462
1,329,007
1,248,286
In over five years
425,513
219,058
425,513
219,058
2,917,647
2,787,595
2,442,854
2,068,536
32
Events after the reporting date

On 29 February 2024 the company entered into an operating lease agreement. The lease spans 10 years to 28 February 2034 with lease payments totalling £1,812,672.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 41 -
33
Related party transactions

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Entities with control, joint control or significant influence over the Group
-
55,199
Other information

The Group has taken advantage of the provision of FRS102 section 33 to not disclose transactions with other wholly owned members of the Group.

 

The Group transacted with the following related parties in the year:

 

Siraj Naybur

During the year, the Group traded with Siraj Naybur, a company in which the Group owns a 45% shareholding but with which the group controls 50%.

 

The Group made sales of £250,442 (2022: £318,789) to Siraj Naybur. At the balance sheet date, the Group was owed £161,420 (2022: £292,291) in respect of these transactions.

 

The Group made purchases of £nil (2022: £133,642) from Siraj Naybur. At the balance sheet date, the Group owed £nil (2022: £1,493) in respect of these transactions.

 

The Group was owed a loan balance of £nil (2022: £190,742). The loan was repayable on demand and interest free.

 

R&M SN Electrical FZCO

During the year, the Group traded with R&M SN Electrical FZCO, a company that is 50% owned within the Group.

 

The Group made sales of £126,953 (2022: £15,545) to R&M SN Electrical FZCO. At the balance sheet date, the Group was owed £114,794 (2022: £11,200) in respect of these sales.

 

The Group made purchases of £269,210 (2022: £nil) from R&M SN Electrical FZCO. At the balance sheet date, the Group owed £nil (2022: £nil) in respect of these transactions.

 

Robinson Family Holdings Limited

The Group was charged rent from Robinson Family Holdings Limited, a company connected by the directors of R & M Electrical Group Limited.

 

The Group was charged rent of £192,000 (2022: £129,989) from Robinson Family Holdings Limited. At the balance sheet date, the Group owed £nil (2022: £nil) in respect of these transactions.

34
Controlling party

The immediate parent company is International Electrical Investments Limited, a company incorporated in the United Kingdom.

The directors consider the ultimate controlling party to be Niedax Galvanik GmbH, a company incorporated in Germany. This is the largest group which the results of the company are consolidated in.

 

Copies of both the consolidated financial statements noted above may be obtained from the registered office, Unit 1 & 2, 362a Spring Road, Sholing, Southampton, Hampshire, SO19 2PB.

R & M ELECTRICAL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 42 -
35
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
6,446,713
6,277,094
Adjustments for:
Share of results of associates and joint ventures
(271,776)
(227,977)
Taxation charged
1,886,083
1,438,940
Finance costs
620,180
358,100
Investment income
(48,412)
(28)
Gain on disposal of tangible fixed assets
(6,035)
(12,993)
Amortisation and impairment of intangible assets
9,325
29,388
Depreciation and impairment of tangible fixed assets
247,117
183,456
Movements in working capital:
Increase in stocks
(3,214,087)
(4,294,291)
Decrease/(increase) in debtors
5,139,029
(9,515,461)
Increase in creditors
4,112,486
12,549,359
Cash generated from operations
14,920,623
6,785,587
36
Analysis of changes in net funds - group
1 January 2023
Cash flows
New finance leases
Exchange rate movements
31 December 2023
£
£
£
£
£
Cash at bank and in hand
6,760,829
8,199,029
-
611,483
15,571,341
Borrowings excluding overdrafts
(56,449)
(4,471)
-
-
(60,920)
Obligations under finance leases
(163,783)
84,341
(268,605)
-
(348,047)
6,540,597
8,278,899
(268,605)
611,483
15,162,374
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