Company Registration No. SC485300 (Scotland)
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
COMPANY INFORMATION
Directors
Mr I Ferguey
Mr D Baird
Secretary
Mr D Baird
Company number
SC485300
Registered office
2 Gavell Road
Kilsyth
Glasgow
Scotland
G65 9BS
Auditor
Consilium Audit Limited
169 West George Street
Glasgow
Scotland
G2 2LB
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 26
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the year ended 30 November 2023.

Fair review of the business

The group generated an operating profit of £1,486,616 during the year (2022: £1,503,511). At the year end the group had shareholders funds of £8,871,326 (2022: £7,788,884) including distributable profits of £8,795, (2022: £7,712,632). The directors therefore believe the group's position to be satisfactory.

 

The directors have seen continuing satisfactory trading results in the year following the accounting period and expect these to continue going forward.

Principal risks and uncertainties

The directors have assessed the main risk facing the group and believe it to be the global shortage of electronic components. During 2022 the group experienced extended lead-times for the supply of electronic components and materials with the increased demand causing disruption in the marketplace and subsequently global supply shortages. This situation has worsened in 2022/23 and has started to ease in 2024. The group is therefore working closely with customers to determine their long-term needs and plan materials much further into the future than would normally be required. Planning so far in advance brings uncertainty as customers' forecasts can change very quickly and it is important that a materials pipeline is in place to allow the continued supply of products.

Key performance indicators

As with many other businesses, the Directors of the group use a number of key performance indicators to assess performance of the group. Those regularly reviewed are:

Other information and explanations

The group finances its operations through a mixture of retained profits and operational bank accounts, and where necessary to fund expansion or capital expenditure programmes through bank borrowings and hire purchase. The management's objectives are to:

 

The group is exposed to the normal credit risk associated with dealing with customers on commercial credit terms.

 

The group is exposed to the normal exchange rate risk associated with dealing with foreign suppliers on commercial credit terms.

On behalf of the board

Mr I Ferguey
Director
29 August 2024
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 30 November 2023.

Principal activities

The principal activity of the company and group continued to be that of designing, manufacturing and repairing electronic equipment.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £28,000 (2022: £56,000). 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 I Ferguey
Mr D Baird
Auditor

The auditor, Consilium Audit Limited, 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 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

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.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
On behalf of the board
Mr I Ferguey
Director
29 August 2024
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
- 4 -
Opinion

We have audited the financial statements of Kelvinside Electronics (Number 1) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2023 which comprise 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 FRS 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 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:

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
- 5 -
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 its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

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 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.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
- 6 -

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.

 

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:

 

 

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.

 

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.

Brian Thomson BA(Hons) CA (Senior Statutory Auditor)
For and on behalf of Consilium Audit Limited
Statutory Auditor
169 West George Street
Glasgow
Scotland
G2 2LB
Date
29 August 2024
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
16,582,408
13,485,369
Cost of sales
(12,121,663)
(8,953,221)
Gross profit
4,460,745
4,532,148
Administrative expenses
(2,975,617)
(3,033,690)
Other operating income
1,488
5,053
Operating profit
4
1,486,616
1,503,511
Interest receivable and similar income
8
3,014
642
Interest payable and similar expenses
9
(178)
(5,100)
Profit before taxation
1,489,452
1,499,053
Tax on profit
10
(379,010)
(314,579)
Profit for the financial year
1,110,442
1,184,474
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the 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.

The notes on pages 13 to 27 form part of these financial statements.
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
GROUP BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,308,917
1,359,117
Current assets
Stocks
15
9,995,262
8,933,819
Debtors
16
4,400,548
2,541,993
Cash at bank and in hand
753,842
575,094
15,149,652
12,050,906
Creditors: amounts falling due within one year
17
(7,526,679)
(5,562,419)
Net current assets
7,622,973
6,488,487
Total assets less current liabilities
8,931,890
7,847,604
Creditors: amounts falling due after more than one year
18
(429)
(10,159)
Provisions for liabilities
Deferred tax liability
20
60,135
48,561
(60,135)
(48,561)
Net assets
8,871,326
7,788,884
Capital and reserves
Called up share capital
23
6,579
6,579
Other reserves
24
69,673
69,673
Profit and loss reserves
24
8,795,074
7,712,632
Total equity
8,871,326
7,788,884
The notes on pages 13 to 27 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
29 August 2024
Mr I Ferguey
Director
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,044,583
1,067,583
Investments
13
6,579
6,579
1,051,162
1,074,162
Current assets
Debtors
16
851,183
780,183
Cash at bank and in hand
1,498
39,171
852,681
819,354
Creditors: amounts falling due within one year
17
(564,782)
(558,092)
Net current assets
287,899
261,262
Net assets
1,339,061
1,335,424
Capital and reserves
Called up share capital
23
6,579
6,579
Profit and loss reserves
24
1,332,482
1,328,845
Total equity
1,339,061
1,335,424
The notes on pages 13 to 27 form part of these financial statements.

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 £31,637 (2022 - £38,363 profit).

The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
29 August 2024
Mr I Ferguey
Director
Company Registration No. SC485300
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
6,579
69,673
6,584,158
6,660,410
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
-
1,184,474
1,184,474
Dividends
11
-
-
(56,000)
(56,000)
Balance at 30 November 2022
6,579
69,673
7,712,632
7,788,884
Year ended 30 November 2023:
Profit and total comprehensive income for the year
-
-
1,110,442
1,110,442
Dividends
11
-
-
(28,000)
(28,000)
Balance at 30 November 2023
6,579
69,673
8,795,074
8,871,326
The notes on pages 13 to 27 form part of these financial statements.
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 December 2021
6,579
1,346,482
1,353,061
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
38,363
38,363
Dividends
11
-
(56,000)
(56,000)
Balance at 30 November 2022
6,579
1,328,845
1,335,424
Year ended 30 November 2023:
Profit and total comprehensive income for the year
-
31,637
31,637
Dividends
11
-
(28,000)
(28,000)
Balance at 30 November 2023
6,579
1,332,482
1,339,061
The notes on pages 13 to 26 form part of these financial statements.
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
28
498,936
(302,467)
Interest paid
(178)
(5,100)
Income taxes paid
(210,399)
(281,206)
Net cash inflow/(outflow) from operating activities
288,359
(588,773)
Investing activities
Purchase of tangible fixed assets
(73,972)
(172,988)
Interest received
3,014
642
Net cash used in investing activities
(70,958)
(172,346)
Financing activities
Repayment of borrowings
(10,653)
(2,412)
Dividends paid to equity shareholders
(28,000)
(56,000)
Net cash used in financing activities
(38,653)
(58,412)
Net increase/(decrease) in cash and cash equivalents
178,748
(819,531)
Cash and cash equivalents at beginning of year
575,094
1,394,625
Cash and cash equivalents at end of year
753,842
575,094
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 13 -
1
Accounting policies
Company information

Kelvinside Electronics (Number 1) Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 2 Gavell Road, Kilsyth, Glasgow, Scotland, G65 9BS. The company's registration number is SC485300.

 

The group consists of Kelvinside Electronics (Number 1) Limited and its subsidiary.

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
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Kelvinside Electronics (Number 1) Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 30 November 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.

 

Merger accounting has been used to consolidate Kelvinside Electronics Limited. Any difference between the nominal value of the subsidiary shares acquired by the Company and those issued by the Company is taken to the merger reserve.

 

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.

1.3
Going concern

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

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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
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
2% on cost
Plant and equipment
15% on cost
Fixtures and fittings
20% on cost

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.

1.6
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.

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

1.7
Impairment of fixed assets

At each reporting period end date, the group 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.

1.8
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.

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.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -

Work in progress

Work in progress is valued on the basis of direct material and labour costs plus attributable overheads based on a normal level of activity. No element of profit is included in the valuation of work in progress.

1.9
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.

1.10
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.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.11
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.

1.12
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 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.

1.13
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 leased asset are consumed.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

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.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United kingdom
15,784,740
13,435,445
Overseas
797,668
49,924
16,582,408
13,485,369
2023
2022
£
£
Other significant revenue
Interest income
3,014
642
Grants received
1,488
5,053
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(179,170)
142,787
Government grants
(1,488)
(5,053)
Depreciation of owned tangible fixed assets
124,172
108,153
Operating lease charges
29,564
23,624
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 parent company
2,500
2,500
Audit of the financial statements of the company's subsidiaries
18,100
19,500
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
Production staff
56
55
-
-
Administrative staff
7
7
-
-
Management staff
2
2
-
-
Total
65
64
-
0
-
0
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
6
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
2,048,703
1,807,844
-
0
-
0
Social security costs
208,696
193,235
-
-
Pension costs
106,648
93,942
-
0
-
0
2,364,047
2,095,021
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
192,000
192,000

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

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
3,014
642
9
Interest payable and similar expenses
2023
2022
£
£
Other interest
178
5,100
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
365,950
295,398
Tax relating to prior year adjustments recognised in profit or loss
1,486
-
0
Total current tax
367,436
295,398
Deferred tax
Origination and reversal of timing differences
11,574
19,181
Total tax charge
379,010
314,579
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
10
Taxation
(Continued)
- 20 -

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
1,489,452
1,499,053
Expected tax charge based on the standard rate of corporation tax in the UK of 23.00% (2022: 19.00%)
342,574
284,820
Tax effect of expenses that are not deductible in determining taxable profit
23,376
29,759
Under/(over) provided in prior years
1,486
-
0
11,574
-
0
Taxation charge
379,010
314,579

There was an increase in the UK corporate rate from 19% to 25% (effective from 1 April 2023) which was enacted on 11 March 2021. The UK corporate tax has been charged at 23% (2022: 19%). The deferred tax liability as at the balance sheet date has been calculated at 25%.

11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
28,000
56,000
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
12
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 December 2022
1,150,000
2,246,670
300,008
3,696,678
Additions
-
0
64,523
9,449
73,972
At 30 November 2023
1,150,000
2,311,193
309,457
3,770,650
Depreciation and impairment
At 1 December 2022
82,417
1,969,619
285,525
2,337,561
Depreciation charged in the year
23,000
91,211
9,961
124,172
At 30 November 2023
105,417
2,060,830
295,486
2,461,733
Carrying amount
At 30 November 2023
1,044,583
250,363
13,971
1,308,917
At 30 November 2022
1,067,583
277,051
14,483
1,359,117
Company
Freehold land and buildings
£
Cost
At 1 December 2022 and 30 November 2023
1,150,000
Depreciation and impairment
At 1 December 2022
82,417
Depreciation charged in the year
23,000
At 30 November 2023
105,417
Carrying amount
At 30 November 2023
1,044,583
At 30 November 2022
1,067,583
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
6,579
6,579
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
13
Fixed asset investments
(Continued)
- 22 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 December 2022 and 30 November 2023
6,579
Carrying amount
At 30 November 2023
6,579
At 30 November 2022
6,579
14
Subsidiaries

Details of the company's subsidiaries at 30 November 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Kelvinside Electronics Limited
2 Gavell Road, Kilsyth, Glasgow, G65 9BS
Ordinary
100.00
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
8,214,987
7,962,858
-
-
Work in progress
52,451
40,500
-
-
Finished goods and goods for resale
1,727,824
930,461
-
0
-
0
9,995,262
8,933,819
-
-
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,296,991
2,368,329
-
0
-
0
Amounts owed by group undertakings
-
-
851,183
780,183
Prepayments and accrued income
103,557
173,664
-
0
-
0
4,400,548
2,541,993
851,183
780,183
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 23 -
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
19
-
0
2,411
-
0
-
0
Trade creditors
5,732,813
4,173,357
-
0
-
0
Corporation tax payable
321,363
164,326
29,896
23,206
Other taxation and social security
772,109
474,273
-
-
Other creditors
534,886
534,886
534,886
534,886
Accruals and deferred income
165,508
213,166
-
0
-
0
7,526,679
5,562,419
564,782
558,092
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
19
-
0
8,242
-
0
-
0
Government grants
21
429
1,917
-
0
-
0
429
10,159
-
-
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Other loans
-
0
10,653
-
0
-
0
Payable within one year
-
0
2,411
-
0
-
0
Payable after one year
-
0
8,242
-
0
-
0

 

The other loan was repaid in full during the year.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 24 -
20
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
60,135
48,561
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 December 2022
48,561
-
Charge to profit or loss
11,574
-
Liability at 30 November 2023
60,135
-

 

21
Deferred grants
Group
Company
2023
2022
2023
2022
£
£
£
£
Deferred government grant
429
1,917
-
-
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
106,648
93,942

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.

23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
6,579
6,579
6,579
6,579
KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
24
Reserves
Equity reserve

Other reserves represents the merger reserve.

25
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
14,181
22,863
-
-
Between two and five years
6,886
21,067
-
-
21,067
43,930
-
-
26
Related party transactions

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

 

No further transactions with related parties were undertaken such as are required to be disclosed under Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

27
Ultimate controlling party

The group was under the control of D Baird throughout the current and previous year by virtue of his interest in the issued share capital.

KELVINSIDE ELECTRONICS (NUMBER 1) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 26 -
28
Cash generated from/(absorbed by) group operations
2023
2022
£
£
Profit for the year after tax
1,110,442
1,184,474
Adjustments for:
Taxation charged
379,010
314,579
Finance costs
178
5,100
Investment income
(3,014)
(642)
Depreciation and impairment of tangible fixed assets
124,172
108,153
Movements in working capital:
Increase in stocks
(1,061,443)
(4,555,773)
Increase in debtors
(1,858,555)
(386,425)
Increase in creditors
1,809,634
3,029,555
Decrease in deferred grants
(1,488)
(1,488)
Cash generated from/(absorbed by) operations
498,936
(302,467)
29
Analysis of changes in net funds - group
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
575,094
178,748
753,842
Borrowings excluding overdrafts
(10,653)
10,653
-
564,441
189,401
753,842
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