Company registration number 02107467 (England and Wales)
BGB ENGINEERING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BGB ENGINEERING LIMITED
COMPANY INFORMATION
Directors
G A Holt
D R Holt
L T Bishop
N Hubbard
G L Johnston
(Appointed 1 April 2023)
H Thompson
(Appointed 1 April 2023)
P Hussein
Company number
02107467
Registered office
Dysart Road
Grantham
Lincolnshire
NG31 7NB
Auditor
Moore
Rutland House
Minerva Business Park
Lynch Wood
Peterborough
PE2 6PZ
BGB ENGINEERING LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Statement of cash flows
9
Notes to the financial statements
10 - 21
BGB ENGINEERING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The Directors present this report which provides a balanced and comprehensive review of the development and performance of the business during the year and of its position at the year end. The review is considered to be consistent with the size and nature of the business and is written in the context of the Company’s main risks.

The Directors are pleased to report that the Company has continued to do well through challenging times, with profit after taxation in the year at £78k (2022: profit of £116k).

During the year no dividends were declared or paid by the Company.

Future developments

We will continue to strengthen our relationships with existing customers in the various vertical markets we serve to offer innovative products and services adding value to their businesses. We shall continue to sell both standard products as well as highly bespoke custom solutions into our OEM customers. Our strategy is to create new revenue streams, fostering long-term growth and stability within our primary markets and to explore and grow into new ones as well as expanding our business internationally.

 

BGB has continued to work on a Thought Leadership business model. The Products and Services Team in particular have created and implemented complementary strategies; namely Servitization and Sustainability. This change in approach will bring about greater intelligence with regards to product performance and will therefore support uptime through predicated maintenance schedules whilst reducing costs and mitigating asset risk. In addition, our Products and Services team continues to explore and develop new opportunities to support their production colleagues and to enable the growth of the business.

 

Performance improvement programme

The Company continues to invest in continuous improvement through collaboration between the design teams and production colleagues. The aim is always an improvement in efficiency which is expected to ultimately lead to cost reduction and the ability to reinvest savings in new projects. The programmes identified continue to contribute to the Company’s core competencies and to the protection and strengthening of profit margins.

On behalf of the board

D R Holt
Director
29 July 2024
BGB ENGINEERING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

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

Principal activities

The principal activity of the company continued to be that of the design and manufacture of electrical and electronic slip ring assemblies and associated components.

Directors

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

G A Holt
D R Holt
L T Bishop
N Hubbard
G L Johnston
(Appointed 1 April 2023)
H Thompson
(Appointed 1 April 2023)
P Hussein
Results and dividends

The Company’s results are published in accordance with the requirements of the new adopted Financial Reporting Standards (FRS102). The Company’s key financial performance indicators used by the Directors to monitor and manage the performance of the Company are Turnover, gross margin and net margin, retained earnings and liquidity of the Company.

 

Turnover for the year has been analysed by its main geographical region in note 3 to the accounts.

 

Turnover increased by 8.7%; to £12.5m (2022: £11.5m), the Company saw a small decrease in ROW sales and a slight increase in UK sales activities.

 

The majority of the Company turnover, once again; relates to export sales. In the year £10.8m or 86.2% of sales were made to export customers (2022: £10.1m or 87.8%).

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Fixed assets

The Directors consider the market value of the fixed assets in use to be consistent with the values detailed in the financial statements (Note 8).

Political donations

Political and charitable donations did not exceed £1,000 in the year.

Financial risk management objectives and policies

The Company uses financial instruments, which include cash, trade debtors and trade creditors which arise directly from its business operations. The main purpose of these financial instruments is to raise finance for the Company's operations.

 

The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail below.

 

The main risks arising from the Company's financial instruments are credit risk, liquidity risk and foreign currency risk. The Directors review and agree policies for managing each of these risks and they are summarised below.

BGB ENGINEERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Liquidity risk

The Company seeks to manage such risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

 

The policy throughout the year has been to manage this risk through the day to day involvement of management in business decisions other than through setting maximum or minimum liquidity ratios.

Foreign exchange risk

The Company has exposure to economic currency fluctuations as the majority of its trading is denominated in euros. The Company manages this risk by actively monitoring exchange rates, utilising natural hedges wherever possible and entering into hedging agreements against foreign exchange variances.

Credit risk

The Company's principle financial assets are cash and trade debtors. The credit risk associated with cash is limited. Credit risk arising from trade debtors is also limited due to the nature of the Company’s trading and its customers.

Auditor

The auditor, Moore, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 company and of the profit or loss of the company 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 company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement 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 company’s auditor 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 company’s auditor is aware of that information.

On behalf of the board
D R Holt
Director
29 July 2024
BGB ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BGB ENGINEERING LIMITED
- 4 -
Opinion

We have audited the financial statements of BGB Engineering Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet, the 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The 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:

BGB ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BGB ENGINEERING LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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.

Explanation as to what extent the audit was considered cabable of detecting irregularities, including fraud

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.

 

We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.

 

We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.

 

We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.

 

Based on this understanding, we designed specific appropriate audit procedures to identify instances of noncompliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.

BGB ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BGB ENGINEERING LIMITED
- 6 -

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.

Mohamedraza Mavani
Senior Statutory Auditor
For and on behalf of Moore
29 July 2024
Chartered Accountants
Statutory Auditor
Rutland House
Minerva Business Park
Lynch Wood
Peterborough
PE2 6PZ
BGB ENGINEERING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
12,520,668
11,523,774
Cost of sales
(9,442,872)
(8,846,092)
Gross profit
3,077,796
2,677,682
Administrative expenses
(3,529,004)
(3,408,344)
Other operating income
576,000
587,636
Operating profit/(loss)
4
124,792
(143,026)
Amounts written off investments
-
(45,000)
Profit/(loss) before taxation
124,792
(188,026)
Tax on profit/(loss)
7
(46,352)
304,206
Profit for the financial year
78,440
116,180
Retained earnings brought forward
13,423,478
13,307,298
Retained earnings carried forward
13,501,918
13,423,478
BGB ENGINEERING LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
3,138,512
3,287,427
Current assets
Stocks
9
5,164,249
4,603,879
Debtors
10
5,659,351
5,920,070
Cash at bank and in hand
2,337,631
2,270,244
13,161,231
12,794,193
Creditors: amounts falling due within one year
11
(780,250)
(686,919)
Net current assets
12,380,981
12,107,274
Total assets less current liabilities
15,519,493
15,394,701
Provisions for liabilities
Deferred tax liability
12
167,375
121,023
(167,375)
(121,023)
Net assets
15,352,118
15,273,678
Capital and reserves
Called up share capital
14
200
200
Other reserves
1,850,000
1,850,000
Profit and loss reserves
13,501,918
13,423,478
Total equity
15,352,118
15,273,678

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

The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
D R Holt
Director
Company registration number 02107467 (England and Wales)
BGB ENGINEERING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
20
320,172
(1,521,609)
Income taxes refunded
-
0
120,569
Net cash inflow/(outflow) from operating activities
320,172
(1,401,040)
Investing activities
Purchase of tangible fixed assets
(237,785)
(533,410)
Issue of loans
(15,000)
-
0
Net cash used in investing activities
(252,785)
(533,410)
Financing activities
Payment of finance leases obligations
-
0
(29,099)
Net cash used in financing activities
-
(29,099)
Net increase/(decrease) in cash and cash equivalents
67,387
(1,963,549)
Cash and cash equivalents at beginning of year
2,270,244
4,233,793
Cash and cash equivalents at end of year
2,337,631
2,270,244
BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information

BGB Engineering Limited is a private company limited by shares incorporated in England and Wales. The registered office is Dysart Road, Grantham, Lincolnshire, NG31 7NB.

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, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

BGB Engineering Limited is a wholly owned subsidiary of ALEXSAVA Holdings Limited. Consolidated financial statements are not publicly available.

1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the true

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

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
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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:

Freehold land and buildings
0% - 5% per annum on straight line basis
Leasehold improvements
Over the life of the lease
Plant and equipment
2% - 25% per annum on straight line basis
Fixtures and fittings
10% - 33.33% per annum on straight line basis
Motor vehicles
20% per annum on straight line basis
BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -

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 credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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. 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.

1.8
Stock

Stock is 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 stock to their present location and condition.

 

Stock held for distribution at no or nominal consideration is measured at the lower of replacement cost and 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 stock 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.

1.9
Cash at bank and in hand

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

1.10
Debtors and creditors receivable/payable within one year

Debtors and creditors with no stated interest rate are receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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 company 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.

1.11
Equity instruments

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

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.12
Taxation

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

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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 when the company has 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.

1.13
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.

1.14
Retirement benefits

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

1.15
Leases

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 leases asset are consumed.

1.16
Government grants

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

 

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

1.17
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.

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2
Judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will seldom equal the related actual results. As of the balance sheet date the company has no significant estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the foreseeable future.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
Europe
7,392,580
6,915,434
United Kingdom & Eire
1,730,644
1,389,152
USA and Americas
1,546,681
1,131,787
Asia and rest of world
1,850,764
2,087,401
12,520,669
11,523,774
2023
2022
£
£
Other revenue
Grants received
-
1,500
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
7,400
(108,751)
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
98,703
(208,053)
Research and development costs
114,070
299,499
Government grants
-
(1,500)
Fees payable to the company's auditor for the audit of the company's financial statements
22,000
22,000
Depreciation of owned tangible fixed assets
386,700
358,597
(Profit)/loss on disposal of tangible fixed assets
-
27,121
Operating lease charges
92,400
92,400
BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
5
Employees

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

2023
2022
Number
Number
Production
42
39
Administration
40
45
Management
6
4
Total
88
88

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,169,256
2,929,001
Social security costs
250,937
289,225
Pension costs
112,051
104,117
3,532,244
3,322,343
6
Directors' remuneration

Directors' emoluments amounting to £422,788 have been recharged to the parent company, ALEXSAVA Holdings Limited by way of management charges.

7
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
46,352
(304,206)

From 1 April 2023, the UK tax rate increased from 19% to 25%. This has had a consequential effect on the company's tax charge. The expected tax charge has therefore been calculated at 25%.

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 16 -

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

2023
2022
£
£
Profit/(loss) before taxation
124,792
(188,026)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
31,198
(35,725)
Tax effect of expenses that are not deductible in determining taxable profit
748
(1,345)
Tax effect of utilisation of tax losses not previously recognised
-
0
(185,660)
Effect of change in corporation tax rate
-
0
(73,010)
Permanent capital allowances in excess of depreciation
(1,795)
(20,779)
Depreciation on assets not qualifying for tax allowances
16,201
12,313
Taxation charge/(credit) for the year
46,352
(304,206)

 

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Assets under construction
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2023
1,323,835
371,393
69,301
4,754,808
1,965,767
45,933
8,531,037
Additions
-
0
-
0
-
0
73,978
163,807
-
0
237,785
Transfers
-
0
-
0
(69,301)
-
0
69,301
-
0
-
0
At 31 December 2023
1,323,835
371,393
-
0
4,828,786
2,198,875
45,933
8,768,822
Depreciation and impairment
At 1 January 2023
594,068
146,108
-
0
3,151,151
1,322,689
29,594
5,243,610
Depreciation charged in the year
63,741
12,299
-
0
207,306
96,591
6,763
386,700
At 31 December 2023
657,809
158,407
-
0
3,358,457
1,419,280
36,357
5,630,310
Carrying amount
At 31 December 2023
666,026
212,986
-
0
1,470,329
779,595
9,576
3,138,512
At 31 December 2022
729,767
225,285
69,301
1,603,657
643,078
16,339
3,287,427
BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Stocks
2023
2022
£
£
Raw materials and consumables
4,259,716
3,363,130
Work in progress
111,819
457,452
Finished goods and goods for resale
792,714
783,297
5,164,249
4,603,879

At the year end the total amount of impairment provision recognised against stock was £342,196 (2022: £373,682). This primarily relates to obsolete and discontinued stock lines.

 

Impairment loss movements are recorded in cost of sales.

10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,052,834
2,362,347
Amounts owed by group undertakings
3,426,250
3,273,262
Other debtors
93,932
207,383
Prepayments and accrued income
86,335
77,078
5,659,351
5,920,070

 

11
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
376,027
282,631
Taxation and social security
76,520
69,421
Other creditors
15,398
24,780
Accruals and deferred income
312,305
310,087
780,250
686,919

 

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
509,868
507,222
Tax losses
(342,493)
(386,199)
167,375
121,023
2023
Movements in the year:
£
Liability at 1 January 2023
121,023
Charge to profit or loss
46,352
Liability at 31 December 2023
167,375
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
112,051
104,117

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
A Ordinary shares of £1 each
100
100
100
100
200
200
200
200

The 'A' Ordinary shares rank equally with the Ordinary shares except with regard to dividend rights. The Directors have the authority to declare a dividend on either the Ordinary or 'A' Ordinary shares, or both, in which case the dividends need not be equal.

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Reserves

Called up share capital

Represents the nominal value of shares that have been issued.

 

Other reserves

Represents amounts earmarked for the future acquisition of significant fixed assets that are expected to be required by the business.

 

Profit and loss reserves

Includes all current and prior period retained profits and losses, inclusive of cumulative unrealised gains and losses for assets shown at fair value at the balance sheet date but exclusive of items designated as other reserves (see above).

 

 

 

 

16
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
44,000
64,667
Between two and five years
-
0
44,000
44,000
108,667
17
Related party transactions

 

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
3,050,323
3,216,299
Fellow subsidiary undertaking
375,927
56,963
Other information

Transactions between companies in a wholly owned group are not disclosed.

BGB ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Directors' transactions

Some of the premises from which the Company operates are owned by a Director. The rent paid to the Directors during the year, excluding VAT, was £92,400 (2022: £92,400). At 31 December 2023, £9,240 was owed to the Directors (2022: £9,240).

 

In addition, a Director acquired a new loan in the year. At 31 December 2023, £15,000 was owed by the Directors (2022 £Nil).

19
Ultimate controlling party

The ultimate holding company is ALEXSAVA Holdings Limited, a Guernsey registered company. The registered office address is Sarnia House, Le Truchot, St Peter Port, Guernsey, GYI 4NA. Group financial statements are not publically available.

20
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
78,440
116,180
Adjustments for:
Taxation charged/(credited)
46,352
(304,206)
(Gain)/loss on disposal of tangible fixed assets
-
27,121
Depreciation and impairment of tangible fixed assets
386,700
358,597
Other gains and losses
-
45,000
Movements in working capital:
Increase in stocks
(560,370)
(1,289,423)
Decrease in debtors
275,719
831
Increase/(decrease) in creditors
93,331
(475,709)
Cash generated from/(absorbed by) operations
320,172
(1,521,609)
21
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
2,270,244
67,387
2,337,631
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