Company registration number 05730086 (England and Wales)
Electrocraft Limited
financial statements
For the year ended 31 December 2023
Electrocraft Limited
Contents
Page
Statement of financial position
1
Notes to the financial statements
2 - 7
Electrocraft Limited
Statement of financial position
As at 31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
36
475
Current assets
Stocks
494,779
471,840
Debtors
5
431,337
514,070
Cash at bank and in hand
493,930
985,212
1,420,046
1,971,122
Creditors: amounts falling due within one year
6
(234,627)
(310,090)
Net current assets
1,185,419
1,661,032
Total assets less current liabilities
1,185,455
1,661,507
Provisions for liabilities
(60,000)
(18,000)
Net assets
1,125,455
1,643,507
Capital and reserves
Called up share capital
2
2
Profit and loss reserves
1,125,453
1,643,505
Total equity
1,125,455
1,643,507
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 2 September 2024 and are signed on its behalf by:
Mr D D Drury
Director
Company registration number 05730086 (England and Wales)
Electrocraft Limited
Notes to the financial statements
For the year ended 31 December 2023
- 2 -
1
Accounting policies
Company information
Electrocraft Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 4 Crewe Trade Park, Gateway, Crewe, Cheshire, England, CW1 6JT.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements cover the company as an individual entity and 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
Going concern
Atruet 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.
1.3
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 despatch 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.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, 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:
Dilapidations
Over related lease term
Leasehold improvements
Over lease term
Computers
Between 3 and 5 years
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.
Electrocraft Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 3 -
1.5
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 the Statement of Comprehensive Income.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand with banks.
1.7
Financial instruments
The company 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 company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companiest, 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.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Electrocraft Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 4 -
Current tax
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.
Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current or deferred taxation assets and liabilities are not discounted.
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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.
Electrocraft Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 5 -
1.13
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.
Average monthly foreign exchange rates have been judged to represent an approximate spot exchange rate for transactions in foreign currency.
Foreign gains and losses resulting from the settlement of transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of comprehensive income within 'other operating income or charges'.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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
In the directors opinion there are no critical judgements, apart from those involving estimations (dealt with separately below), that they have been made aware in applying the company’s accounting policies and that have had a significant effect on the amounts recognised in the financial statements.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Impairment of inventory
An impairment provision has been made against slow and obsolete stock. The provision has been estimated by forecasting the usage against stock held at the year end and applying a percentage rate which has been estimated dependent on the expected usage. The impairment loss has been recognised in the Statement of Comprehensive Income.
Cost of stock
Cost of stock includes costs of conversion and other costs incurred bringing the stock to their present location and condition. These costs have been estimated by applying a percentage based on stocks (after the impairment provision) held at the year end against purchases made during the year to direct costs incurred.
Electrocraft Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 6 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
11
12
4
Tangible fixed assets
Dilapidations
Leasehold improvements
Computers
Total
£
£
£
£
Cost
At 1 January 2023
26,000
107,544
95,188
228,732
Additions
34,000
34,000
At 31 December 2023
60,000
107,544
95,188
262,732
Depreciation and impairment
At 1 January 2023
26,000
107,544
94,713
228,257
Depreciation charged in the year
34,000
439
34,439
At 31 December 2023
60,000
107,544
95,152
262,696
Carrying amount
At 31 December 2023
36
36
At 31 December 2022
475
475
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
248,613
349,867
Amounts owed by group undertakings
129,711
132,360
Other debtors
53,013
31,843
431,337
514,070
Electrocraft Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 7 -
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
91,378
66,153
Amounts owed to group undertakings
52,777
133,124
Taxation and social security
14,527
Other creditors
90,472
96,286
234,627
310,090
7
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Nicola Johnson
Statutory Auditor:
DJH Audit Limited
Date of audit report:
4 September 2024
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
44,282
18,720
9
Events after the reporting date
In January 2024, the directors announced a restructure of Electrocraft group operations, in order to more efficiently serve its European customer base. As a result, since 31 December 2023, the balance sheet date, redundancies have occurred and agreement in principal has been reached to terminate the lease of property early. The total financial cost of restructuring, incurred since the balance sheet date, is estimated to be £85,032.
10
Parent company
This company is a wholly owned subsidiary of Electrocraft Inc, a company incorporated in the USA. The ultimate parent company is DMI Technology Corp, a company incorporated and domiciled in the USA. The registered office of DMI Technology Corp is 2 Marin Way, Suite 3, Stratham, NH 03885.
The ultimate controlling party is L D Delany by virtue of his interest in DMI Technology Corp.