Company registration number 10551715 (England and Wales)
BRITDEALS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BRITDEALS LIMITED
COMPANY INFORMATION
Directors
Mr C Harrison
Mr S Wegbriet
(Appointed 7 May 2023)
Secretary
Abogado Nominees Limited
Company number
10551715
Registered office
280 Bishopsgate
London
United Kingdom
EC2M 4RB
Auditor
Lopian Gross Barnett & Co
1st Floor, Cloister House
Riverside
New Bailey Street
Manchester
M3 5FS
Business address
100 New Bridge Street
London
EC4V 6JA
BRITDEALS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 29
BRITDEALS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Fair review of the business

The directors are satisfied with the performance of all the group’s activities during the year.

 

The results for the year show a slight decrease in turnover to £20.76m from £20.79m. Gross profit over the year has increased to £3.1m from £2.1m.

Performance from Britdeals Ltd, the parent of the group, assisted by dividends received by subsidiary company Eurotronics EOOD, enabled Britdeals Ltd to pay dividends in 2023 to the parent company.

Principal risks and uncertainties

The Group's principal risk is considered to be the impairment of stock and exposure to fluctuating currency exchange rates.

 

The operations of the holding company are based in the UK. The Group's two subsidiaries have major operations which are located in Bulgaria and Panama respectively, with trade being conducted in their functional currency.

 

The operations in Panama are currently dormant while management determines the next course of action in the region.

 

At each reporting date, the results of these overseas entities are translated into sterling, being the presentation and functional currency for Britdeals Ltd.

 

Any fluctuations in currency exchange rates increase the risk of the Group incurring significant foreign exchange losses which risk eroding the Group's overall profitability and ability to pay dividends.

 

Development and performance

Britdeals Limited is relatively a new operation within the UK that has accumulated losses since incorporation.

 

Our key operation in the UK involves significant trading with Amazon which matches our worldwide operations. The Group as a whole is involved with acquiring excess inventory from Amazon at discounted prices and then reselling it to wholesalers and retailers at a premium or mark up. The balance of the Group's business consists of the wholesaling of brand name consumer goods purchased from various general merchandise vendors when they are in an overstocked position, hence our ability to acquire such products for a discounted price.

 

Instinctively, the ability to become well established in any market takes time and patience, mainly because the manufacturers and distributors at first are unaware of our presence as we enter a new market. Typically, it takes a few years to acquire sufficient products and to develop markets for our products. In addition, the uncertainties created by Brexit also contributed to the slower than expected growth in the business.

 

The company had refrained from making long-term business commitments to vendors even though these opportunities presented significant value to the company in terms of sales and profits. The company continued operation as much as possible throughout the Covid-19 pandemic, with no employees furloughed. Sales slowed, but the company survived the pandemic without significant impairment to the business.

 

In our opinion, these are the reasons why UK operations have accumulated losses since incorporation. However, the post year-end performance is strong and management is confident that the company will continue to build on the profitable performance achieved in 2023.

 

BRITDEALS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Other information and explanations

From a group wide perspective, we are now at a point where our core suppliers can adequately supply us with sufficient product bases that are for the most part well known branded items which we will be selling to our developing customer base.

 

Our employee base is sufficient in number and adequately trained such that as we increase our business, they will be able to cope with the increased demand. Our warehouse and office staff levels are sufficient for the foreseeable future.

 

Knight Rock Holdings Corp (the US parent company) has assigned its most experienced senior executive to directly oversee the day to day operation of the business.

 

Knight Rock Holdings Corp has sufficient assets and strong cash reserves to sustain this operation for the foreseeable future and, if necessary, provide adequate resources to fund the Group. We anticipate developing operations in the UK and Bulgaria such that the Group will be sufficiently profitable in 2024 .

 

On behalf of the board

Mr C Harrison
Director
22 July 2024
BRITDEALS LIMITED
GROUP DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Principal activities

The principal activity of the company and group continued to be that of online wholesalers and retailers.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £728,472. The directors do not recommend payment of a further dividend.

Directors

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

Mr H Gunasekera
(Resigned 7 May 2023)
Mr C Harrison
Mr S Wegbriet
(Appointed 7 May 2023)
Auditor

Lopian Gross Barnett & Co were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
Mr C Harrison
Director
22 July 2024
BRITDEALS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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.

BRITDEALS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BRITDEALS LIMITED
- 5 -
Opinion

We have audited the financial statements of Britdeals 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, the company 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:

BRITDEALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BRITDEALS LIMITED
- 6 -
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.

BRITDEALS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BRITDEALS LIMITED
- 7 -

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

 

 

 

 

 

 

 

 

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, 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 fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

 

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.

Jonathan Brodie FCA (Senior Statutory Auditor)
For and on behalf of Lopian Gross Barnett & Co
22 July 2024
Chartered Accountants
Statutory Auditor
1st Floor, Cloister House
Riverside
New Bailey Street
Manchester
M3 5FS
BRITDEALS LIMITED
GROUP PROFIT AND LOSS ACCOUNT true
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
4
20,762,674
20,791,494
Cost of sales
(17,620,012)
(18,730,568)
Gross profit
3,142,662
2,060,926
Administrative expenses
(1,960,769)
(1,805,607)
Other operating income
3,304
36,858
Operating profit
5
1,185,197
292,177
Interest payable and similar expenses
8
(102)
(67,555)
Profit before taxation
1,185,095
224,622
Tax on profit
9
(130,221)
60,993
Profit for the financial year
22
1,054,874
285,615
Profit for the financial year is all attributable to the owners of the parent company.
BRITDEALS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
1,054,874
285,615
Other comprehensive income
Currency translation differences
(29,596)
64,415
Total comprehensive income for the year
1,025,278
350,030
Total comprehensive income for the year is all attributable to the parent company.
BRITDEALS LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
101,147
129,627
Tangible assets
13
26,617
35,067
127,764
164,694
Current assets
Stocks
17
703,816
1,706,688
Debtors
18
701,095
867,107
Cash at bank and in hand
2,097,388
1,652,553
3,502,299
4,226,348
Creditors: amounts falling due within one year
19
(1,022,456)
(2,080,241)
Net current assets
2,479,843
2,146,107
Net assets
2,607,607
2,310,801
Capital and reserves
Called up share capital
21
11,000
11,000
Merger relief reserve
22
22,075,978
22,075,978
Profit and loss reserves
22
(19,479,371)
(19,776,177)
Total equity
2,607,607
2,310,801

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 22 July 2024 and are signed on its behalf by:
22 July 2024
Mr C Harrison
Director
Company registration number 10551715 (England and Wales)
BRITDEALS LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
23
529
Investments
14
10,000
10,000
10,023
10,529
Current assets
Stocks
17
329,789
539,006
Debtors
18
526,894
696,637
Cash at bank and in hand
494,687
548,998
1,351,370
1,784,641
Creditors: amounts falling due within one year
19
(266,794)
(929,221)
Net current assets
1,084,576
855,420
Net assets
1,094,599
865,949
Capital and reserves
Called up share capital
21
11,000
11,000
Profit and loss reserves
22
1,083,599
854,949
Total equity
1,094,599
865,949

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 £957,123 (2022 - £280,174 profit).

The financial statements were approved by the board of directors and authorised for issue on 22 July 2024 and are signed on its behalf by:
22 July 2024
Mr C Harrison
Director
Company registration number 10551715 (England and Wales)
BRITDEALS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Merger relief reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
11,000
22,075,978
(19,931,403)
2,155,575
Year ended 31 December 2022:
Profit for the year
-
-
285,615
285,615
Other comprehensive income:
Currency translation differences
-
-
64,415
64,415
Total comprehensive income for the year
-
-
350,030
350,030
Dividends
10
-
-
(194,804)
(194,804)
Balance at 31 December 2022
11,000
22,075,978
(19,776,177)
2,310,801
Year ended 31 December 2023:
Profit for the year
-
-
1,054,874
1,054,874
Other comprehensive income:
Currency translation differences
-
-
(29,596)
(29,596)
Total comprehensive income for the year
-
-
1,025,278
1,025,278
Dividends
10
-
-
(728,472)
(728,472)
Balance at 31 December 2023
11,000
22,075,978
(19,479,371)
2,607,607
BRITDEALS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
11,000
769,579
780,579
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
280,174
280,174
Dividends
10
-
(194,804)
(194,804)
Balance at 31 December 2022
11,000
854,949
865,949
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
957,122
957,122
Dividends
10
-
(728,472)
(728,472)
Balance at 31 December 2023
11,000
1,083,599
1,094,599
BRITDEALS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,310,924
588,211
Interest paid
(102)
(67,555)
Income taxes paid
(106,919)
(66,276)
Net cash inflow from operating activities
1,203,903
454,380
Investing activities
Purchase of tangible fixed assets
(1,000)
(25,345)
Net cash used in investing activities
(1,000)
(25,345)
Financing activities
Dividends paid to equity shareholders
(728,472)
(194,804)
Net cash used in financing activities
(728,472)
(194,804)
Net increase in cash and cash equivalents
474,431
234,231
Cash and cash equivalents at beginning of year
1,652,553
1,353,907
Effect of foreign exchange rates
(29,596)
64,415
Cash and cash equivalents at end of year
2,097,388
1,652,553
BRITDEALS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
27
(15,279)
46,792
Investing activities
Dividends received
689,440
374,269
Net cash generated from investing activities
689,440
374,269
Financing activities
Dividends paid to equity shareholders
(728,472)
(194,804)
Net cash used in financing activities
(728,472)
(194,804)
Net (decrease)/increase in cash and cash equivalents
(54,311)
226,257
Cash and cash equivalents at beginning of year
548,998
322,741
Cash and cash equivalents at end of year
494,687
548,998
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
Company information

Britdeals Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 100 New Bridge Street, London, United Kingdom, EC4V 6JA.

 

The group consists of Britdeals 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.

1.2
Basis of consolidation

The consolidated financial statements incorporate those of Britdeals Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 December 2023.

 

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 have been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of subsidiaries.The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

1.3
Going concern

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

1.4
Turnover

Turnover represents amounts received for wholesale and retail sale of goods.

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.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is a period of 10 years.

BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.6
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:

Plant and equipment
20-33% straight line
Fixtures and fittings
20-40% straight line
Computers
20-33% straight line
1.7
Fixed asset investments

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.

1.8
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.

Recoverable amount is the higher of fair value less costs to sell and value in use.

1.9
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.

1.10
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.

BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.11
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.

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.

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.

1.12
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.

1.13
Taxation

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

BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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.

1.14
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.

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.

3
Significant estimates

Impairment of stock: FRS102 requires that stock is held at lower of cost & NRV. A provision is required as necessary. The directors have objective criteria in order to impair stock, however, the directors acknowledge that there is a degree of estimation uncertainty in calculating impairing slow & non-moving stock or loss making stock.

4
Turnover
2023
2022
£
£
Turnover analysed by class of business
Wholesale
20,762,674
20,791,494
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Turnover
(Continued)
- 20 -
2023
2022
£
£
Turnover analysed by geographical market
UK
4,021,554
3,682,043
Europe
11,066,199
10,468,827
Other
5,674,921
6,640,624
20,762,674
20,791,494
5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
54,678
(14,724)
Depreciation of owned tangible fixed assets
9,450
11,060
Amortisation of intangible assets
28,480
28,480
Stocks impairment losses recognised or reversed
24,703
111,518
Operating lease charges
150,648
184,036

Exchange differences recognised in profit or loss during the year amounted to a gain of £54,678 (2022 - £14,724 loss).

 

In the Statement of Comprehensive Income the £29,596 loss on currency translation arises from the consolidation of the foreign entities into the group accounts. The £54,678 relates to foreign exchange and losses arises out of trading of the group entities.

6
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
25,000
25,000
7
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
39
43
10
10
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Employees
(Continued)
- 21 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
937,414
925,213
383,509
356,879
Social security costs
126,655
110,540
62,171
51,266
1,064,069
1,035,753
445,680
408,145

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
102
67,555
9
Taxation
2023
2022
£
£
Current tax
Foreign current tax on profits for the current period
41,001
68,427
Deferred tax
Origination and reversal of timing differences
89,220
(129,420)
Total tax charge/(credit)
130,221
(60,993)
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 22 -

The actual charge/(credit) 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
1,185,095
224,622
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
296,274
42,678
Tax effect of expenses that are not deductible in determining taxable profit
11,169
22,258
Tax effect of income not taxable in determining taxable profit
(218,217)
(105,830)
Tax effect of utilisation of tax losses not previously recognised
-
0
(30,217)
Unutilised tax losses carried forward
(78,805)
-
0
Change in unrecognised deferred tax assets
78,673
(121,139)
Depreciation on assets not qualifying for tax allowances
126
-
0
Effect of overseas tax rates
41,001
131,257
Taxation charge/(credit)
130,221
(60,993)

There are £985,475 of unutilised tax losses within the parent company (2022: £1,342,883 ).

10
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
728,472
194,804
11
Foreign currency translation differences

Foreign currency translation differences have occurred in the current and prior year because Britdeals Ltd's subsidiaries operate in overseas jurisdictions under their jurisdiction's functional currency and present their Profit and Loss and Balance Sheet items in those respective currencies. Eurotronics EOOD operates in Bulgaria and presents its Profit and Loss and Balance Sheet in Bulgarian Lev, while Electro Int SRL operates in Panama and presents its Profit and Loss and Balance Sheet in US Dollars.

 

At each reporting date, the overseas subsidiaries' Profit and Loss and Balance Sheet is translated into Sterling with the resulting gain or loss on translation being recognised in Other Comprehensive Income.

BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
12
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
2,351,277
Amortisation and impairment
At 1 January 2023
2,221,650
Amortisation charged for the year
28,480
At 31 December 2023
2,250,130
Carrying amount
At 31 December 2023
101,147
At 31 December 2022
129,627
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
13
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
39,196
191,292
29,726
260,214
Additions
-
0
1,000
-
0
1,000
At 31 December 2023
39,196
192,292
29,726
261,214
Depreciation and impairment
At 1 January 2023
39,196
156,754
29,197
225,147
Depreciation charged in the year
-
0
8,944
506
9,450
At 31 December 2023
39,196
165,698
29,703
234,597
Carrying amount
At 31 December 2023
-
0
26,594
23
26,617
At 31 December 2022
-
0
34,538
529
35,067
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Tangible fixed assets
(Continued)
- 24 -
Company
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023 and 31 December 2023
39,196
3,336
18,050
60,582
Depreciation and impairment
At 1 January 2023
39,196
3,336
17,521
60,053
Depreciation charged in the year
-
0
-
0
506
506
At 31 December 2023
39,196
3,336
18,027
60,559
Carrying amount
At 31 December 2023
-
0
-
0
23
23
At 31 December 2022
-
0
-
0
529
529
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
As restated
Investments in subsidiaries
15
-
0
-
0
10,000
10,000
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
10,000
Carrying amount
At 31 December 2023
10,000
At 31 December 2022
10,000
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
Eurotronics EOOD
Bulgaria
Ordinary
100.00
Electro Int. SRL
Panama
Ordinary
100.00
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
16
Financial instruments

There are no financial instruments held at fair value.

17
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
703,816
1,706,688
329,789
539,006
18
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
182,126
253,743
95,509
173,632
Corporation tax recoverable
67,100
453
-
0
-
0
Other debtors
90,881
230,712
78,781
151,668
Prepayments and accrued income
106,749
38,011
106,235
35,748
446,856
522,919
280,525
361,048
Amounts falling due after more than one year:
Deferred tax asset (note 20)
254,239
344,188
246,369
335,589
Total debtors
701,095
867,107
526,894
696,637
19
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
751,810
1,861,051
179,698
903,823
Other taxation and social security
4,309
-
-
-
Other creditors
187,685
194,440
8,444
648
Accruals and deferred income
78,652
24,750
78,652
24,750
1,022,456
2,080,241
266,794
929,221
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
20
Deferred taxation

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

Assets
Assets
2023
2022
Group
£
£
Tax losses
254,239
344,188
Assets
Assets
2023
2022
Company
£
£
Tax losses
246,369
335,589
Group
Company
2023
2023
Movements in the year:
£
£
Asset at 1 January 2023
(344,188)
(335,589)
Charge to profit or loss
89,949
89,220
Asset at 31 December 2023
(254,239)
(246,369)

The deferred tax asset set out above is expected to reverse in more than 12 months and relates to the utilisation of tax losses against future expected profits of the same nature of trading.

21
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
11,000
11,000
11,000
11,000
22
Reserves
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Reserves
(Continued)
- 27 -

Merger relief reserve

 

A merger relief reserve is recognised in the group to the sum of £22,075,978 following Britdeals acquiring Electro and Eurotronics in a share exchange in a previous year.

 

There is no corresponding reserve/investment in the parent company due to the investments becoming impaired in previous years.

 

23
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
122,712
122,712
122,712
122,712
Between two and five years
347,684
470,396
347,684
470,396
470,396
593,108
470,396
593,108
24
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Group
Key management personnel
13,336
11,332
-
-
Other related parties
141,808
157,380
456,756
495,007

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Key management personnel
443
453
Other related parties
37,716
33,575
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Related party transactions
(Continued)
- 28 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Key management personnel
443
453
Other related parties
7,979
29,418

Dividends of £728,472 (2022: £194,804) were paid to the controlling party during the year.

 

 

25
Controlling party

The immediate parent is Knight Rock Holdings Corp (US based parent company) which is owned by the ultimate controlling party 'Albert J Palacci.

26
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
1,054,874
285,615
Adjustments for:
Taxation charged/(credited)
130,221
(60,993)
Finance costs
102
67,555
Amortisation and impairment of intangible assets
28,480
28,480
Depreciation and impairment of tangible fixed assets
9,450
11,060
Movements in working capital:
Decrease/(increase) in stocks
1,002,872
(1,067,643)
Decrease/(increase) in debtors
142,710
(111,038)
(Decrease)/increase in creditors
(1,057,785)
1,435,175
Cash generated from operations
1,310,924
588,211
BRITDEALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
27
Cash (absorbed by)/generated from operations - company
2023
2022
£
£
Profit for the year after tax
957,123
280,174
Adjustments for:
Taxation charged/(credited)
89,220
(121,139)
Investment income
(689,440)
(374,269)
Depreciation and impairment of tangible fixed assets
506
1,035
Movements in working capital:
Decrease/(increase) in stocks
209,217
(373,828)
Decrease/(increase) in debtors
80,523
(207,864)
(Decrease)/increase in creditors
(662,428)
842,683
Cash (absorbed by)/generated from operations
(15,279)
46,792
28
Analysis of changes in net funds - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,652,553
444,835
2,097,388
29
Analysis of changes in net funds - company
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
548,998
(54,311)
494,687
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