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Registered number: 01551804












IFM ELECTRONIC LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

 

IFM ELECTRONIC LIMITED

CONTENTS



Page
Company information
 
1
Strategic report
 
2 - 6
Directors' report
 
7
Directors' responsibilities statement
 
8
Independent auditor's report
 
9 - 12
Profit and loss account
 
13
Balance sheet
 
14
Statement of changes in equity
 
15
Notes to the financial statements
 
16 - 29


 

IFM ELECTRONIC LIMITED
 
COMPANY INFORMATION


Directors
M H Langen 
D W MacGregor 
R L Birkett 




Registered number
01551804



Registered office
16 Great Queen Street
Covent Garden

London

WC2B 5AH




Independent auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Page 1

 

IFM ELECTRONIC LIMITED
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their strategic report on the company for the year ended 31 December 2023. The principal activity of the company during the year continued to be that of importing and selling electronic equipment.

Business review
 
As detailed below, the company has seen an increase in turnover. Consequently, the results for the year and the financial position at the year end were considered satisfactory by the directors.
The results of the company are significantly driven by levels of turnover, which is the company's key performance indicator. The value of turnover increased 12% to £39,330,457. This was due to an increase in demand for the company's products, as a result of a reaction in part to supply chain issues, with customers trying to keep pace with the demand for goods and a fear of being unable to meet their customer's demand. The company continues to develop its market position and increase its market share by strengthening customer loyalty.
The gross profit margin has slightly decreased in the year from 25.9% to 24.5%. This reduction is broadly consistent with prior years. The decrease is in part due to the company facing cost pressures which it cannot pass on fully as well as a change in the sales mix.
The operating profit margin has decreased in the year from 6.1% to 3.7%. This was after administrative expenses of £7,871,172 (2022 - £6,747,518). Personnel costs increased by £582,969. While overall employee levels have remained consistent through the year however employee mix has changed. There has been an increase in the sales team and a fulfilment of a number of positions which had been unfilled in the prior year. This investment should drive growth in the future. The directors continue to monitor the levels of operating costs, to ensure they remain under control and continue to support the efficient running of the business.
Management continues to monitor the company's working capital cycle. The current ratio is 1.52 compared to 1.66 in 2022, the decrease being due to increase in Trade debtors at the year end. The quick ratio which excludes stock is 1.35 which is consistent with prior year. Stock levels are monitored to meet customer demand while taking a strategic decision to hold fewer items through fulfilling directly, the number of stock lines held has increased through decreasing volume held for each item. This allows immediate fulfilment to meet customer demand with larger orders being shipped directly from Germany.

Page 2

 

IFM ELECTRONIC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
The directors address both the strategic and specific business risks facing the company including, but not restricted to market and product risk as well as environmental and social responsibility risks. The directors consider all aspects of the business: the market sectors in which the company operates, the nature and quality of its customers, and suppliers.
An immediate short term risk arises from the general economic uncertainty as a result of high inflation and the impact that recession could have on investment in the economy more broadly. This in addition to the continued world-wide shortage of components could mean the company is unable to fulfil customer orders. The company's directors have taken steps to minimise the disruption to supply lines on imported goods by the holding more product lines in the UK to enable the company to meet customer demand. 
Customer base
The company sells components and solutions for the manufacturing sector and traditional markets have included the automotive sector. The company continues to diversify into other markets in order to reduce its reliance on one sector.
Liquidity risk
The company has sufficient liquid resources to meet the operating needs of its business. The directors monitor working capital requirements to ensure the company's obligations can be met.
Foreign currency risk
The company's parent invoices the company in Sterling thereby bearing the exchange risk itself. The exchange loss for the year is £63,675 (2022 - £52,732) and is the result of the above arrangements limiting the risk for the company to sales to fellow group companies and balances in the euro bank account.
Credit risk
Receivable balances are monitored on an ongoing basis and provision is made for doubtful debts where necessary. Credit risk is minimised through the ongoing monitoring of those credit limits. Stop notices are put in place on those customers above their credit limit and can only be released through the authority of senior management.

Future developments
 
The directors continue to develop the business by bringing on new products and service lines and growing the customer base. The directors are aware of the challenges the business faces in an uncertain economic environment. The directors will continue to monitor and respond to developments as they arise.
The company is in the process of developing a customer experience centre in Derby due to be open in Q2 2024. The directors look forward to seeing the benefit of that investment in future growth.

Page 3

 

IFM ELECTRONIC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors' statement of compliance with duty to promote the success of the company
 
As directors of IFM Electronic Limited, we take our statutory duties seriously, particularly those outlined in Section 172 of the Companies Act 2006. This section stipulates that directors must act in the way they consider, in good faith, to promote the success of the company for the benefit of its stakeholders as a whole. Ensuring that our decisions and actions are made with the best interests of its stakeholders in mind.
Section 172 (1)(a) to (f) Companies Act 2006 requires the directors to act in the way they consider would be most likely to promote the success of the company for the benefit of its stakeholders, as a whole, with regard to the following matters:
a) The likely consequences of any decision in the long-term
We, the directors, affirm our commitment to considering the likely consequences of any decision in the medium and long-term. As guardians of the company, we recognise the importance of assessing the potential impact of our decisions beyond immediate outcomes, ensuring the sustainable growth and prosperity of the business. In fulfilling this duty, we undertake comprehensive evaluations of proposed actions, analysing factors such as market trends, financial implications, brand reputation, stakeholder interests, regulatory compliance, and the overall alignment with our corporate values and objectives. Through this process, we aim to make informed decisions that contribute positively to the well-being of all stakeholders and the broader communities in which we operate.
b) The interests of the company's employees
We recognise that our employees are essential to the success and sustainability of the company, and we are committed to maintaining a workplace environment that promotes their well-being, professional development, and engagement. In making decisions, we consider the impact on our employees, including their job security, working conditions, opportunities for advancement, and fair treatment. We strive to create a culture of inclusion and respect, where all employees feel valued and empowered to contribute to the company's objectives. Through effective communication, consultation, and collaboration with our colleagues, we aim to create a supportive and fulfilling workplace that attracts and retains top talent, drives innovation, and ultimately enhances shareholder value following the ifm philosophy and code of conduct.
c) The need to foster the company's business relationships with suppliers, customers and others
We understand the importance of maintaining positive and mutually beneficial relationships with customers and suppliers to ensure the long-term success and sustainability of the business following the company motto “ifm close to you”.
To fulfil this duty, we are committed to:

Cultivating Strong Supplier Relationships:

Engaging in fair and transparent dealings with our suppliers.
Establishing open lines of communication and collaboration to ensure the timely delivery of quality goods and services.
Recognising the contributions of our suppliers and maintaining a partnership approach based on trust and respect.

Enhancing Customer Satisfaction:

Understanding the evolving needs and preferences of our customers.
Providing excellent products, services, and support to meet and exceed customer expectations.
Building long-lasting relationships with our customers based on reliability, integrity, and responsiveness.


 
Page 4

 

IFM ELECTRONIC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors' statement of compliance with duty to promote the success of the company (continued)
c) The need to foster the company's business relationships with suppliers, customers and others
 (continued)
Engaging with Other Stakeholders:

Recognising the importance of other stakeholders beyond our immediate suppliers and customers, including employees, shareholders, regulators, and the local community.
Communicating openly and transparently with all stakeholders and addressing their concerns and interests to the best of our ability.
Seeking opportunities for collaboration and partnership with stakeholders to create shared value and promote mutual benefit.

d) The impact of the company's operations on the community and environment
We recognise the importance of considering the broader social and environmental impacts of our company's operations. We are committed to conducting our business in a manner that not only generates value for our shareholders but also contributes positively to the communities in which we operate and minimises our environmental footprint. Improving our environmental performance by implementing sustainable practices throughout our value chain. This includes reducing our carbon emissions, conserving natural resources, minimising waste generation, and promoting eco-friendly products and services.
e)       The desirability of the company maintaining a reputation for high standards of business conduct
We acknowledge the importance of upholding and promoting a reputation for high standards of business conduct. Maintaining the trust and confidence of all of our stakeholders and the wider community, is fundamental to the long-term success and sustainability of the company.
We are committed to conducting our business affairs with integrity, honesty, and transparency at all times. We believe that ethical conduct is not only a legal obligation but also a core value that emphasises our corporate culture and guides our decision-making processes.
We are committed to upholding principles of fairness, equity, and transparency in our decision-making processes, ensuring that the interests of all stakeholders are considered and respected. We recognise that acting in the best interests of the company involves balancing the diverse interests of its employees, and we are committed to fostering a culture of fairness and inclusivity that promotes trust, collaboration, and long-term value creation for all stakeholders.
Furthermore, we understand that a positive reputation for ethical behaviour increases our competitiveness, customer loyalty, attracts top talent, and strengthens relationships with key stakeholders. It also mitigates risks associated with potential legal, financial, and reputational harm that may arise from unethical conduct.
f
) The need to act fairly as between members of the company 
The company is a wholly owned subsidiary of IFM Electronic GmbH, and the directors have regular and open dialogue with its representatives. 

Page 5

 

IFM ELECTRONIC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


This report was approved by the board and signed on its behalf.



M H Langen
Director

Date: 8 March 2024

Page 6

 

IFM ELECTRONIC LIMITED

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Results and dividends

The profit for the year, after taxation, amounted to £1,134,977 (2022 - £1,760,400).

A final dividend for the year ended 31 December 2023 amounting to £1,300,000 (2022 - £1,600,000) was declared in the financial year.

Directors

The directors who served during the year and up to the date of this report were:

M H Langen 
D W MacGregor 
R L Birkett 
S P Evans (resigned 1 January 2024)
M Wolf (resigned 1 January 2024)

Matters covered in the Strategic Report

As permitted by s414c(11) of the Companies Act 2006, the directors have elected to disclose information, as required to be in the directors' report by Schedule 7 of the 'Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008', in the strategic report.

Disclosure of information to auditor

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report was approved by the board and signed on its behalf.
 





M H Langen
Director

Date: 8 March 2024

Page 7

 

IFM ELECTRONIC LIMITED
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors are responsible for preparing the strategic report, the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:

select suitable accounting policies for the company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 8

 

IFM ELECTRONIC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF IFM ELECTRONIC LIMITED
 FOR THE YEAR ENDED 31 DECEMBER 2023

Opinion


We have audited the financial statements of IFM Electronic Limited (the 'company') for the year ended 31 December 2023, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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:


give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 United Kingdom, including the Financial Reporting Council'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 reportOur 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.


Page 9

 

IFM ELECTRONIC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF IFM ELECTRONIC LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.


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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 8, 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.


Page 10

 

IFM ELECTRONIC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF IFM ELECTRONIC LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

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.


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:

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the electrical component importing and supply sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

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

performed analytical procedures to identify any unusual or unexpected relationships;
tested a sample of journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.

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

agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims;
confirming with management that all enquiries made into the company's tax affairs by HMRC have been addressed; and
reviewing correspondence with HM Revenue and Customs.

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.
Page 11

 

IFM ELECTRONIC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF IFM ELECTRONIC LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: 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 2006Our 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.





Mark Hart FCA CTA (senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants
Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

 
Date: 
8 March 2024
Page 12

 

IFM ELECTRONIC LIMITED
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 3 
39,330,457
35,132,355

Cost of sales
  
(29,699,793)
(26,029,068)

Gross profit
  
9,630,664
9,103,287

Distribution costs
  
(715,674)
(520,268)

Administrative expenses
  
(7,871,172)
(6,747,518)

Other operating income
 4 
411,301
299,028

Operating profit
 5 
1,455,119
2,134,529

Interest receivable and similar income
 8 
13,116
10,061

Profit before taxation
  
1,468,235
2,144,590

Tax on profit
 9 
(333,258)
(384,190)

Profit for the financial year
  
1,134,977
1,760,400

There are no items of other comprehensive income for the year or the prior year other than the profit for the year. Accordingly, no statement of other comprehensive income has been presented.

Page 13


 
REGISTERED NUMBER:01551804
IFM ELECTRONIC LIMITED

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 11 
395,886
232,110

  
395,886
232,110

Current assets
  

Stocks
 12 
1,271,703
1,996,137

Debtors
 13 
9,560,384
8,056,760

Cash at bank and in hand
 14 
266,062
624,190

  
11,098,149
10,677,087

Creditors: amounts falling due within one year
 15 
(7,148,998)
(6,417,865)

Net current assets
  
 
 
3,949,151
 
 
4,259,222

Total assets less current liabilities
  
4,345,037
4,491,332

Provisions for liabilities
  

Deferred tax
 16 
(35,399)
(16,671)

Other provisions
 17 
(160,000)
(160,000)

  
 
 
(195,399)
 
 
(176,671)

Net assets
  
4,149,638
4,314,661


Capital and reserves
  

Called up share capital 
 18 
2,200,000
2,200,000

Profit and loss account
 19 
1,949,638
2,114,661

Total equity
  
4,149,638
4,314,661


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




M H Langen
Director

Date: 8 March 2024

The notes on pages 16 to 29 form part of these financial statements.

Page 14

 

IFM ELECTRONIC LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
2,200,000
1,954,261
4,154,261


Comprehensive income for the year

Profit for the year
-
1,760,400
1,760,400

Dividends: Equity capital
-
(1,600,000)
(1,600,000)



At 1 January 2023
2,200,000
2,114,661
4,314,661


Comprehensive income for the year

Profit for the year
-
1,134,977
1,134,977

Dividends: Equity capital
-
(1,300,000)
(1,300,000)


At 31 December 2023
2,200,000
1,949,638
4,149,638


The notes on pages 16 to 29 form part of these financial statements.

Page 15

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

The principal activity of the company during the year continued to be that of importing and selling electronic equipment.
The company is a private company limited by shares and is incorporated in England and Wales. Its registered office is 16 Great Queen Street, Covent Garden, London, WC2B 5AH, and its principal place of business is Kingsway Business Park, Oldfield Road, Hampton, Middlesex, TW12 2HD.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies.

The company was, at the end of the year, a wholly-owned subsidiary of ifm electronic GmbH, a company incorporated in Germany, the registered office of which is Friedrichstraße 1, 45128, Essen, Germany. Ifm electronic GmbH prepares consolidated financial statements, in which the company is included, that are equivalent to UK requirements.
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:

Section 3 Financial Statement Presentation paragraph 3.17(d) (inclusion of statement of cash flows);
Section 7 Statement of Cash Flows (inclusion of statement of cash flows); and
Section 11 Financial Instruments paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c) (disclosures relating to financial instruments).

The following principal accounting policies have been applied:

 
2.2

Going concern

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Page 16

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Revenue

Revenue from goods

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. 

Revenue from software
Revenue from the sale of perpetual software licences is recognised when the software is installed as it is then that the company has transferred the significant risks and rewards of ownership to the buyer.
Revenue from software maintenance and support subscriptions is recognised on a straight-line basis over the term of the contract.
Income received in advance of the subscription period is classified as deferred income on the balance sheet and recognised as revenue in the period in which the service is provided.
Other revenue
Other operating income comprises management fees receivable, in the year. Income is recognised in line with costs incurred to provide the service.

 
2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Over life of the lease
Fixtures and fittings
-
15% reducing balance
Office equipment
-
20% and 50% reducing balance

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 17

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.6

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.


2.7

Financial instruments

The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument. 

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. 
 
The company’s policies for its major classes of financial assets and financial liabilities are set out below. 

Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances, intercompany working capital balances, and intercompany financing are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.

Financial liabilities

Basic financial liabilities, including trade and other 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

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

Page 18

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)




Financial instruments (continued)

Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account. 

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date. 

For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

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 and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. 
 
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.

  
2.8

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 
2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 19

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange 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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
2.11

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 
2.12

Operating leases

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.13

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

 
2.14

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

Page 20

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Interest income

Interest income is recognised in profit or loss using the effective interest method.

  
2.16

Provisions for dilapidations

Provisions for dilapidations are made where a legal obligation exists and the amount can be quantified with reasonable certainty.
An estimation of the obligation is made at the inception of the lease and the obligation and corresponding asset is recognised on the balance sheet. The obligation is recognised in the profit and loss account over the term of the lease.

 
2.17

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 21

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sale of goods
38,994,116
34,949,752

Software
336,341
182,603

39,330,457
35,132,355


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
39,305,028
35,086,450

Rest of Europe
25,429
45,905

39,330,457
35,132,355



4.


Other operating income

2023
2022
£
£

Intercompany recharges
411,301
299,028



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
44,033
51,783

Exchange differences
63,675
52,732

Operating lease rentals
697,966
588,425

Defined pension contributions
397,266
210,070

Cost of goods sold
29,699,793
26,029,068

Fees payable to the company's auditor and its associates for audit of the
company's annual financial statements
43,500
36,250

Tax compliance services
3,650
3,250

All other non-audit services not included above
2,250
6,488

Page 22

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
4,326,848
3,825,755

Social security costs
466,214
527,360

Cost of defined contribution scheme
397,266
254,244

5,190,328
4,607,359


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Selling and distribution
36
27



Administration
23
29



Management staff
10
11

69
67


7.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
486,861
427,011

Company contributions to defined contribution pension schemes
54,860
55,360

541,721
482,371


During the year retirement benefits were accruing to 5 directors (2022 - 5) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £162,914 (2022 - £184,108).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £14,537 (2022 - £19,285).


8.


Interest receivable

2023
2022
£
£


Other interest receivable
13,116
10,061

Page 23

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
351,536
391,967


Total current tax
351,536
391,967

Deferred tax


Origination and reversal of timing differences
(18,278)
(7,005)

Changes to tax rates
-
(2,212)

Prior year under provision
-
1,440

Total deferred tax
(18,278)
(7,777)


Tax on profit
333,258
384,190

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,468,235
2,144,590


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
345,035
407,472

Effects of:


Expenses not deductible for tax purposes
801
586

Capital allowances for year in excess of depreciation
3,897
2,913

Provision adjustment
(17,233)
(17,195)

Changes to rates on deferred tax
-
(2,212)

Adjustments to tax charge in respect of prior periods
-
1,440

Other differences
758
(8,814)

Total tax charge for the year
333,258
384,190

Page 24

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.Taxation (continued)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


10.


Dividends

2023
2022
£
£


Dividends declared and paid
1,300,000
1,600,000


11.


Tangible fixed assets





Assets held in the course of construction
Fixtures and fittings
Office equipment
Total

£
£
£
£



Cost


At 1 January 2023
-
1,338,829
1,329,309
2,668,138


Additions
186,173
15,011
6,625
207,809


Disposals
-
-
(159,532)
(159,532)



At 31 December 2023

186,173
1,353,840
1,176,402
2,716,415



Depreciation


At 1 January 2023
-
1,161,364
1,274,664
2,436,028


Charge for the year on owned assets
1,551
26,512
15,970
44,033


Disposals
-
-
(159,532)
(159,532)



At 31 December 2023

1,551
1,187,876
1,131,102
2,320,529



Net book value



At 31 December 2023
184,622
165,964
45,300
395,886



At 31 December 2022
-
177,465
54,645
232,110

Page 25

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Stocks

2023
2022
£
£

Finished goods and goods for resale
1,271,703
1,996,137


There is no significant difference between the replacement cost of finished goods and goods for resale and their carrying amounts. Stock is stated after a provision for impairment of £5,704 (2022 - £81,630).


13.


Debtors

2023
2022
£
£

Due after more than one year

Other debtors
21,684
41,934

21,684
41,934

Due within one year

Trade debtors
8,816,935
7,234,219

Amounts owed by group undertakings
197,000
308,415

Other debtors
397,709
346,649

Prepayments and accrued income
127,056
125,543

9,560,384
8,056,760


Trade debtors are stated after a provision for bad debts of £22,176 (2022 - £65,971).
Amounts owed by group undertakings are interest free, have no fixed repayment date and are repayable on demand.


14.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
266,062
624,190


Page 26

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
490,716
317,819

Amounts owed to group undertakings
3,922,788
2,738,697

Other taxation and social security
706,146
1,051,611

Other creditors
1,300,000
1,600,000

Accruals and deferred income
729,348
709,738

7,148,998
6,417,865


Amounts owed to group undertakings are interest free, have no fixed repayment date and are repayable on demand.


16.


Deferred taxation




2023


£






At beginning of year
(16,671)


Charged to profit or loss
(18,728)



At end of year
(35,399)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(36,649)
(36,265)

Short term timing differences
1,250
19,594

(35,399)
(16,671)

Page 27

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Provisions




Dilapidation provision

£





At 1 January 2023
160,000



At 31 December 2023
160,000

The company has an obligation under certain operating leases for dilapidations. These fall due at the expiry of each operating lease in 2030.


18.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



2,200,000 (2022 - 2,200,000) Ordinary shares of £1.00 each
2,200,000
2,200,000

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.



19.


Reserves

Profit and loss account

The profit and loss reserve includes all current and prior year retained profits and losses.


20.


Capital commitments

As at the balance sheet date, the company had a capital commitment in respect of refurbishment costs totalling £285,749 (2022 - £nil).


21.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £397,266 (2022 - £254,244). Contributions totalling £65,811 (2022 - £11,134) were payable to the fund at the balance sheet date and are included in creditors.

Page 28

 

IFM ELECTRONIC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Commitments under operating leases

At 31 December 2023 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
444,822
438,297

Later than 1 year and not later than 5 years
1,332,404
1,174,543

Later than 5 years
477,915
649,951

2,255,141
2,262,791


23.


Related party transactions

The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.
The directors consider that they and certain senior management are key management personnel. The aggregate personnel costs are £1,322,157 (2022 - £1,301,098).


24.


Controlling party

The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and of which the company is a member is that headed by IFM Electronic GmbH, the registered office of which is at Friedrichstraße 1, 45128, Essen, Germany. Copies of these group financial statements are available to the public from www.bundesanzeiger.de.
The ultimate parent company is IFM Stiftung & Co. KG, a company incorporated in Germany.
In the opinion of the directors there is no ultimate controlling party.

 
Page 29