Company registration number 00330768 (England and Wales)
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
COMPANY INFORMATION
Directors
B R Barkes
S R Barkes
R J N Barkes
J M Barkes
Secretary
R J N Barkes
Company number
00330768
Registered office
Clavering House
Clavering Place
Newcastle upon Tyne
NE1 3NG
Auditor
Sumer Auditco Limited
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
Bankers
Lloyds Bank
102 Grey Street
Newcastle upon Tyne
NE99 1SL
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 27
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Principal activities
The principle activities of the company continue to be those of electrical wholesalers and manufacturers of electrical equipment.
Review of the business
The company operates 7 branches across the UK at the following locations;
Basildon
Glasgow
Watford
Wandsworth
Dartford
Durham
Edinburgh
In addition to the above, the company also operates an export branch out of Lancashire in order to reach overseas customers.
During the year the company renewed the leases at Basildon, Export, Dartford and Edinburgh ensuring the company has the capacity to trade for the foreseeable future.
As reported in the statement of comprehensive income, turnover increased by 4% (2023 - 6%), and gross profit margin increased by 0.4% (2023 - 0.8%) resulting in an overall increase in gross profit margin to 24.7% (2023 - 24.3%).
The statement of financial position shows that the net assets at the year end increased from £4,535,339 to £4,805,792.
Net cash from operations has increased from £214,790 cash used in 2023 to £666,349 cash generated in 2024.
Principal risks and uncertainties
Management continually monitors the principal risks facing the company and assesses the controls used for managing these risks. The board of directors regularly reviews the principal risks and the controls in place to manage them.
The key business and financial risks facing the company are:
Economic downturn / market competition
The company maintains close contact with customers so that these risks are monitored and appropriate action taken where necessary.
Liquidity risk
The directors regularly monitor the financial information to ensure that any risks in this area are considered on a timely basis.
Credit risk
The company monitors credit risk and considers that its current policy of strict credit checks meets its objectives of managing its exposure.
Interest rate risk
The company monitors interest rate risk and considers that its current policy meets its objectives of managing its exposure.
Employees
The company recognises its performance depends largely on its key employees. Employees are remunerated with competitive packages and conditions as well as specific employee incentive schemes.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Key performance indicators
Management use a range of performance indicators to monitor and manage the business:
Turnover has increased to £27,412,261 from £26,433,941 in 2023.
The gross profit margin has increased to 24.7% (2023 - 24.3%).
There has been an increase in net profit before tax to £544,355 from £351,284 in 2023.
Return on capital employed has increased to 12% from 8% in 2023.
Net current assets have increased by 4%.
S R Barkes
R J N Barkes
Director
Director
27 September 2024
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £100,000.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
B R Barkes
G R Barkes
(Deceased 11 August 2023)
S R Barkes
R J N Barkes
J M Barkes
Auditor
Sumer Auditco Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
On behalf of the board
S R Barkes
R J N Barkes
Director
Director
27 September 2024
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
- 5 -
Opinion
We have audited the financial statements of The British Electrical & Manufacturing Company Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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:
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.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED (CONTINUED)
- 6 -
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 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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED (CONTINUED)
- 7 -
Capability of the audit in detecting irregularities, including fraud
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of legal costs incurred; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
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.
Stephen Slater
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
27 September 2024
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
27,412,261
26,433,941
Cost of sales
(20,630,130)
(20,017,120)
Gross profit
6,782,131
6,416,821
Distribution costs
(5,115,812)
(5,233,376)
Administrative expenses
(1,205,455)
(1,000,822)
Other operating income
93,656
175,007
Operating profit
4
554,520
357,630
Interest receivable and similar income
235
Interest payable and similar expenses
7
(10,400)
(6,346)
Profit before taxation
544,355
351,284
Tax on profit
8
(136,402)
(82,495)
Profit for the financial year
407,953
268,789
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
£
£
Profit for the year
407,953
268,789
Other comprehensive income
Remeasurement of the net defined benefit plan
(37,500)
(112,500)
Total comprehensive income for the year
370,453
156,289
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,240,490
2,255,935
Current assets
Stocks
13
2,346,471
2,386,483
Debtors
14
5,196,094
5,081,436
Cash at bank and in hand
1,192,478
823,857
8,735,043
8,291,776
Creditors: amounts falling due within one year
15
(6,054,502)
(5,816,853)
Net current assets
2,680,541
2,474,923
Total assets less current liabilities
4,921,031
4,730,858
Creditors: amounts falling due after more than one year
16
(48,235)
(99,998)
Provisions for liabilities
Deferred tax liability
18
67,004
95,521
(67,004)
(95,521)
Net assets excluding pension liability
4,805,792
4,535,339
Defined benefit pension liability
19
Net assets
4,805,792
4,535,339
Capital and reserves
Called up share capital
20
1,000,000
1,000,000
Profit and loss reserves
3,805,792
3,535,339
Total equity
4,805,792
4,535,339
The financial statements were approved by the board of directors and authorised for issue on 27 September 2024 and are signed on its behalf by:
S R Barkes
R J N Barkes
Director
Director
Company registration number 00330768 (England and Wales)
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
1,000,000
3,479,050
4,479,050
Year ended 31 March 2023:
Profit
-
268,789
268,789
Other comprehensive income:
Remeasurement of the net defined benefit plan
19
-
(112,500)
(112,500)
Total comprehensive income
-
156,289
156,289
Dividends
9
-
(100,000)
(100,000)
Balance at 31 March 2023
1,000,000
3,535,339
4,535,339
Year ended 31 March 2024:
Profit
-
407,953
407,953
Other comprehensive income:
Remeasurement of the net defined benefit plan
19
-
(37,500)
(37,500)
Total comprehensive income
-
370,453
370,453
Dividends
9
-
(100,000)
(100,000)
Balance at 31 March 2024
1,000,000
3,805,792
4,805,792
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
714,362
(160,479)
Interest paid
(10,400)
(6,346)
Income taxes paid
(37,613)
(47,965)
Net cash inflow/(outflow) from operating activities
666,349
(214,790)
Investing activities
Purchase of tangible fixed assets
(107,616)
(36,646)
Proceeds from disposal of tangible fixed assets
9,466
54,210
Interest received
235
Net cash (used in)/generated from investing activities
(97,915)
17,564
Financing activities
Payment of finance leases obligations
(99,813)
(76,048)
Dividends paid
(100,000)
(100,000)
Net cash used in financing activities
(199,813)
(176,048)
Net increase/(decrease) in cash and cash equivalents
368,621
(373,274)
Cash and cash equivalents at beginning of year
823,857
1,197,131
Cash and cash equivalents at end of year
1,192,478
823,857
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information
The British Electrical & Manufacturing Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Clavering House, Clavering Place, Newcastle upon Tyne, NE1 3NG.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
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 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.
1.4
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
Not depreciated
Leasehold land and buildings
Over term of lease
Plant and equipment
10-25% straight line
Motor vehicles
25% straight line
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.
Freehold land and buildings are not depreciated, as in the opinion of the directors, the residual value would be sufficiently high to make any depreciation charge immaterial.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.7
Stocks
Stocks are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is calculated using the weighted average method and consists of the purchase price, transport and handling costs less trade discounts and rebates. Throughout the reporting period stocks are assessed for impairment. If an item of stock is impaired, the identified stock is reduced and an impairment charge is recognised in the profit and loss account.
1.8
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 balance sheet 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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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, 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 company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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, if considered material to the financial statements.
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
1.14
The company operates a defined benefit pension plan for employees. The assets of the plan are held separately from those of the company.
The liability recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of the plan assets at the reporting date. Fair value is based on market price information and in the case of quoted securities is the published bid price. Pension scheme liabilities are measured on an actuarial basis using the projected unit method and are discounted to their present value using a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme liabilities. Pension scheme deficits are recognised in full on the balance sheet and the related deferred tax asset is separately accounted for within provisions. Any pension scheme surplus is recognised only to the extent that it is considered to be recoverable in accordance with FRS 102.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as "re-measurement of net defined benefit liability". Net interest on the defined benefit liability is determined by multiplying the net defined benefit liability by the discount rate, as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. This cost is recognised in profit or loss as finance revenue or expense.
1.15
Defined contribution plans
Contributions payable to the company's scheme are charged to the profit and loss account in the year to which they relate.
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
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment in assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
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.
Determining residual values and useful economic lives of tangible fixed assets
The company depreciates tangible fixed assets (other than Freehold land and buildings as stated in note 1.4) over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices. The carrying amount of tangible fixed assets at the reporting end date was £2,240,490 (2023 - £2,255,935).
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
27,412,261
26,433,941
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
25,972,800
24,705,234
Overseas
1,439,461
1,728,707
27,412,261
26,433,941
2024
2023
£
£
Other revenue
Interest income
235
-
Rental income
91,703
167,907
Other income
1,953
7,100
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
30,000
30,000
Depreciation of owned tangible fixed assets
100,389
121,945
Depreciation of tangible fixed assets held under finance leases
62,085
45,910
Profit on disposal of tangible fixed assets
(9,379)
(12,873)
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production staff
18
12
Distribution staff
54
60
Administration staff
14
15
Management staff
17
18
Total
103
105
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,820,287
3,658,586
Social security costs
395,094
350,441
Pension costs
425,043
433,727
4,640,424
4,442,754
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
344,310
251,892
Company pension contributions to defined contribution schemes
33,919
30,920
378,229
282,812
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 0 (2023 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
143,000
108,798
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
15
-
Other finance costs:
Interest on finance leases and hire purchase contracts
10,385
6,346
10,400
6,346
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
164,618
37,312
Adjustments in respect of prior periods
301
(1,763)
Total current tax
164,919
35,549
Deferred tax
Origination and reversal of timing differences
(28,517)
46,946
Total tax charge
136,402
82,495
The main rate of corporation tax increased to 25% from 1 April 2023 under the Finance Bill 2021. Deferred tax has been provided at the rates expected to be in place when the timing differences reverse.
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:
2024
2023
£
£
Profit before taxation
544,355
351,284
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
136,089
66,744
Tax effect of expenses that are not deductible in determining taxable profit
4,589
(12,344)
Adjustments in respect of prior years
301
(1,763)
Pension plan adjustments
(2,232)
32,304
Profit on sale of fixed assets
(2,345)
(2,446)
Taxation charge for the year
136,402
82,495
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
9
Dividends
2024
2023
£
£
Final paid - Previous financial year
50,000
50,000
Interim paid - Current financial year
50,000
50,000
100,000
100,000
10
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
1,802,524
371,645
750,918
676,302
3,601,389
Additions
42,062
16,770
88,284
147,116
Disposals
(73,269)
(65,685)
(138,954)
At 31 March 2024
1,802,524
413,707
694,419
698,901
3,609,551
Depreciation and impairment
At 1 April 2023
25
337,992
590,941
416,496
1,345,454
Depreciation charged in the year
294
12,354
43,881
105,945
162,474
Eliminated in respect of disposals
(73,182)
(65,685)
(138,867)
At 31 March 2024
319
350,346
561,640
456,756
1,369,061
Carrying amount
At 31 March 2024
1,802,205
63,361
132,779
242,145
2,240,490
At 31 March 2023
1,802,499
33,653
159,977
259,806
2,255,935
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
2,709
Motor vehicles
165,782
213,571
165,782
216,280
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
11
Fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 April 2023 & 31 March 2024
3,240
Impairment
At 1 April 2023 & 31 March 2024
3,240
Carrying amount
At 31 March 2024
-
At 31 March 2023
-
12
Subsidiaries
Details of the company's subsidiaries at 31 March 2024 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Russells Supplies Limited
2BD, Clavering Court, Clavering Place, Newcastle Upon Tyne, NE1 3NG
Dormant company
Ordinary
100.00
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
2,346,471
2,386,483
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,800,005
4,809,602
Other debtors
2,000
21,550
Prepayments and accrued income
394,089
250,284
5,196,094
5,081,436
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
17
72,173
80,723
Trade creditors
4,315,065
4,628,792
Amounts owed to group undertakings
3,238
3,238
Corporation tax
164,618
37,312
Other taxation and social security
336,666
272,262
Other creditors
64,583
73,471
Accruals and deferred income
1,098,159
721,055
6,054,502
5,816,853
Obligations under finance leases are secured on the assets to which they relate.
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
17
48,235
99,998
Obligations under finance leases are secured on the assets to which they relate.
17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
80,713
88,849
In two to five years
62,080
111,051
142,793
199,900
Less: future finance charges
(22,385)
(19,179)
120,408
180,721
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
67,004
95,521
2024
Movements in the year:
£
Liability at 1 April 2023
95,521
Credit to profit or loss
(28,517)
Liability at 31 March 2024
67,004
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
369,334
363,616
At 31 March 2024 contributions outstanding were £64,583 (2023 - £32,221).
Defined benefit schemes
The company operates a pension scheme providing benefits based on final pensionable pay. Under the scheme, the employees are entitled to retirement benefits of 1/60th of final salary multiplied by pensionable service on reaching retirement age of 65.
The scheme is a funded scheme which was closed to new entrants on 1 November 2001 and ceased to accrue pension benefits from 30 June 2008. The company has agreed to a funding plan, recommended by the actuary, with no contributions expected in the next financial year.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out in July 2024 by George Whitaker FIA, Fellow of the Institute of Actuaries. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
19
Retirement benefit schemes
(Continued)
- 25 -
2024
2023
Key assumptions
%
%
Discount rate
4.75
4.85
Expected rate of increase of pensions in payment
3.75
3.65
Inflation assumption - RPI
3.3
3.2
Inflation assumption - CPI
2.8
2.6
Mortality assumptions
2024
2023
Years
Years
Assumed life expectations on retirement at age 65:
Mortality (before and after retirement)
19.4
20
Amounts recognised in other comprehensive income
2024
2023
Costs/(income):
£
£
Actual return on scheme assets
(180,000)
728,000
Less: calculated interest element
-
-
Return on scheme assets excluding interest income
(180,000)
728,000
Actuarial changes related to obligations
(12,000)
(1,536,000)
Changes in surplus not recognised in the statement of financial position
230,000
958,000
Total costs
38,000
150,000
The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:
2024
2023
Liabilities/(assets):
£
£
Present value of defined benefit obligations
5,918,000
6,147,000
Fair value of plan assets
(7,875,000)
(7,874,000)
Surplus in scheme
(1,957,000)
(1,727,000)
Surplus not recognised
1,957,000
1,727,000
Total (asset)/liability recognised
-
-
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
19
Retirement benefit schemes
(Continued)
- 26 -
2024
Movements in the present value of defined benefit obligations
£
Liabilities at 1 April 2023
6,147,000
Benefits paid
(503,000)
Contributions from scheme members
286,000
Actuarial gains and losses
(12,000)
At 31 March 2024
5,918,000
The defined benefit obligations arise from plans which are wholly or partly funded.
2024
Movements in the fair value of plan assets
£
Fair value of assets at 1 April 2023
7,874,000
Actuarial gains and losses
180,000
Benefits paid
(503,000)
Contributions by the employer
38,000
Interest income on plan assets
286,000
At 31 March 2024
7,875,000
The actual return on plan assets was £180,000 (2023 - £728,000).
2024
2023
Fair value of plan assets
£
£
Equity instruments
-
5,295,000
Property
-
366,000
Alternative assets
-
542,000
Cash (Cash & Deposits)
380,000
353,000
Bonds
7,495,000
1,318,000
7,875,000
7,874,000
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000,000
1,000,000
1,000,000
1,000,000
THE BRITISH ELECTRICAL & MANUFACTURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 27 -
21
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
265,206
211,449
Between two and five years
857,122
596,490
In over five years
762,438
357,343
1,884,766
1,165,282
22
Directors' transactions
Dividends totalling £58,638 (2023 - £58,638) were paid in the year in respect of shares held by the company's directors.
23
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
407,953
268,789
Adjustments for:
Taxation charged
136,402
82,495
Finance costs
10,400
6,346
Investment income
(235)
Gain on disposal of tangible fixed assets
(9,379)
(12,873)
Depreciation and impairment of tangible fixed assets
162,474
167,855
Pension scheme non-cash movement
(37,500)
(150,000)
Movements in working capital:
Decrease/(increase) in stocks
40,012
(205,521)
Increase in debtors
(114,658)
(47,285)
Increase/(decrease) in creditors
118,893
(270,285)
Cash generated from/(absorbed by) operations
714,362
(160,479)
24
Analysis of changes in net funds
1 April 2023
Cash flows
New finance leases
31 March 2024
£
£
£
£
Cash at bank and in hand
823,857
368,621
-
1,192,478
Obligations under finance leases
(180,721)
99,813
(39,500)
(120,408)
643,136
468,434
(39,500)
1,072,070
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