Company registration number 01589678 (England and Wales)
PELICAN ENGINEERING COMPANY (SALES), LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
PELICAN ENGINEERING COMPANY (SALES), LIMITED
COMPANY INFORMATION
Directors
Richard Basil Crump
Robert Edward Crump
Amelia Mary Crump
Company number
01589678
Registered office
Altofts Lane
Wakefield Europort
Castleford
West Yorkshire
WF10 5UB
Auditor
BHP LLP
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
PELICAN ENGINEERING COMPANY (SALES), LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 26
PELICAN ENGINEERING COMPANY (SALES), LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Review of the business

Since 2020, when the first zero-emission electric buses were delivered, Pelican has grown its share of the UK market for all-electric passenger vehicles to over 15% and become one of the largest suppliers nationally.

 

By the end of March 2024, over 1,300 Yutong buses and coaches were in service in the UK and Ireland with hundreds more on forward order.

 

As well as receiving orders from an unprecedented number of new customers, Pelican is also seeing repeat orders from operators in England, Scotland and Wales.

 

The truck dealerships continue to be strong and very significant contributors to the company's overall profitability. Truck aftersales has proved to be very a resilient sector during every previous economic downturn and afford the business a strong degree of resilience in the event of a drop in new vehicle sales. There has been a steady increase in the local area vehicle parc with new customers gained during the year. Parts and labour sales again finished the year at an all-time high compared to any previous year.

Principal risks and uncertainties

The company generates most of its business from the three different franchise agreements it holds from DAF, MAN and Yutong. The loss of any of these agreements would be detrimental however the directors see no reason why these different agreements are at any immediate risk of termination. Also, having different franchises at least spreads the risk and mitigates the damage of losing one of the franchises.

The company operates in a highly competitive market and must respond quickly to changing offers from competitors in order not to be undercut. Ongoing market research is carried out to continually collect and evaluate competitor information to mitigate this risk.

The company finances its operations through a mixture of retained profits, asset finance and bank borrowings. The impact of the recent increase in interest rates is mitigated in part by using both fixed and floating facilities.

In order to manage customer credit risk, credit limits are set for all account customers based on payment history, references and publicly available information. These limits are reviewed on a regular basis in conjunction with debt aging and collection records. Credit is only available to customers for parts and service sales. All new vehicles must be paid in full before delivery.

Liquidity risks are managed by the continual weekly monitoring of available cash balances and the directors have a policy of committing more than sufficient cash funds to meet all obligations.

Key performance indicators

The company's key financial and other performance indicators during the year were as follows:

 

 

Unit

2024

2023

Turnover

£

108,700,114

96,740,867

Increase in turnover

%

12

33

Gross profit margin

%

18

13

Profit before tax

£

8,901,252

2,179,200

MOT first time pass rate - (2023 / 2022 Calendar Year)

%

100

100

Parts first time pick rate

%

??

97.1

 

 

%

97.0

97.1

 

 

 

 

 

PELICAN ENGINEERING COMPANY (SALES), LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Promoting the success of the company

The success of the company is dependent on the full engagement and support of all stakeholders. The directors are committed to ensuring it operates within a strong corporate culture with due regard to all its stakeholders.

 

Shareholders

 

The board is committed in ensuring all shareholders are kept informed in a timely manner to ensure they are all aware of the company’s objectives and plans through the provision of timely and relevant financial and operational information.

 

Employees

 

The directors are committed to ensuring there is an environment that allows for full engagement with all employees through clear communication, employment contracts, welfare monitoring, training and development opportunities. All of these being underpinned by compliance to our statutory responsibilities as an employer. The company has a strong record of reinvesting profits to provide staff and customers with modern safe premises equipped with the very latest tooling and welfare facilities.

 

Employment policies are in place to ensure the provision of equal opportunities for all employees and potential employees regardless of race, nationality, religion, age, disability, gender or sexual orientation.

 

Community

 

The company has a series of plans in place covering company cars, energy consumption and waste management. Donations are made to several charities and sponsored events, both local and national, throughout the year.

Suppliers

 

The relationships with key suppliers MAN, DAF and Yutong are fundamental to the success of the business. The directors and senior management have long standing high level contacts at all these franchise providers.

 

Customers

 

The Pelican mission statement and philosophy is “The Customer Comes First”. The company seeks to achieve this by training all staff to the highest possible standards, ensuring parts stock held at depots is amongst the highest anywhere in the UK and offering a ‘’one stop shop‘’ for all customer requirements. The directors spend considerable time with our customers to understand their needs and views and listen to how we can continually improve our offer and service for them.

 

Regulators

 

The company engages with regulators such as the Driver and Vehicle Standards Agency (DVSA), the LowCVP, and the Confederation of Passenger Transport (CPT) to communicate our views to policy makers. The directors take legal and regulatory developments into account when considering all future actions.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

Future Outlook

 

The company’s future progress and success are directly linked to the successful strategy of the manufacturers it represents and the vehicles they develop.

DAF has consistently been the UK market leader for over 20 years and the local DAF vehicle parc continues to grow.

MAN is owned by VW group and the new management team at MAN UK Ltd has a clear and credible plan to grow their UK market share.

As trucks become more complex, aftersales work retention at dealerships continues to grow at the expense of third party repairers. The location of Pelican, which is key to aftersales work, is unrivalled in the area.

Yutong is ideally placed to benefit from new opportunities arising in the current decade for new zero emission electric bus and coach sales. It is anticipated that most of the UK wide bus fleet will be replaced with zero emission buses by 2030. Each new round of English, Scottish and Welsh government funding has resulted in further orders. Yutong is the largest global manufacturer of electric buses with the most technically advanced vehicle range which is gaining favour with UK bus operators.

The Yutong product range available in the UK widened further in 2023 with the introduction of the U11DD electric double deck bus and the GTe14 three axle intercity coach. The Yutong parts business grows every month.

Pelican is currently a UK leader in supporting large electric vehicles in service which will benefit the company as larger numbers of electric trucks start to enter service.

The Yutong product range available in the UK should widen further with the imminent arrival of the electric double deck bus and the three axle intercity coach. The Yutong parts business grows every month.

 

Pelican is currently a UK leader in supporting large electric vehicles in service which will benefit the company as larger numbers of electric trucks start to enter service.

On behalf of the board

Richard Basil Crump
Director
7 November 2024
PELICAN ENGINEERING COMPANY (SALES), LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

 

Information relating to fair review of the business and principal risks and uncertainties is included in the strategic report.

Principal activities

The company is the UK and Ireland sole importer and distributor for Yutong electric buses and coaches responsible for all aspects of sales and aftersales throughout the UK. Yutong is the largest bus manufacturer in the world with about 10% of the global market for buses and coaches over 7m long.

The company also operates truck dealerships for DAF and MAN providing a full range of services for truck operators in West Yorkshire. In 2023 a new venture, EV Automotive Training, was established to provide IMI accredited electric vehicle training.

Results and dividends

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £4,356,700. The directors do not recommend payment of a final dividend.

Directors

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

Richard Basil Crump
Sarah Jane Newton
(Resigned 30 October 2024)
Gillian Rosemary Crump
(Resigned 16 September 2024)
Robert Edward Crump
Amelia Mary Crump
Marie Gill
(Resigned 16 September 2024)
Financial instruments

 

Objectives and policies

The company utilises financial instruments in order to finance its trading operations.

Price risk, credit risk, liquidity risk and cash flow risk

The company's principal financial instruments comprise bank balances, bank overdrafts, trade creditors, trade debtors, loans to/from the company and lease purchase agreements. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.

 

Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.

 

In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding through the use of overdrafts and inter group borrowings.

 

Trade debtors are managed in respect of credit and cash flow risk policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

 

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Future developments

The directors have continued to ensure that the company is efficiently resourced, and are confident that the company is ideally placed to benefit from future upturns in the economy.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
Auditor

In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the company will be put at a General Meeting.

Energy and carbon report
2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
1,311,448
872,384
- Electricity purchased
594,251
643,047
- Fuel consumed for transport
1,029,113
1,107,454
2,934,812
2,622,885
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
239.38
157.03
- Fuel consumed for owned transport
290.07
297.41
529.45
454.44
Scope 2 - indirect emissions
- Electricity purchased
123.04
133.16
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
-
-
Total gross emissions
652.49
587.60
Intensity ratio
Tonnes CO2e per employee
3.62
3.73
Quantification and reporting methodology

Emissions are calculated using the UK Government Conversion Factors for Company reporting 2024.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -
Measures taken to improve energy efficiency

All Pelican business’ hold ISO 14001 Environmental Management accreditation. Throughout the year a number of steps have been taken to reduce emissions.

The car policy has been updated to allow only the purchase of hybrid or electric cars with additional incentives for electric cars.

A program to change all lighting in the dealership buildings to LED has recently been completed and older steel roller doors have been changed to insulated panel doors. Light switching in all rooms that are not always occupied, such as kitchens and toilets, have been changed to motion sensitive switching.

Longer distance travel is continually under review with a target of a minimum of 15% reduction compared to pre-covid levels. For longer journeys, the train is used in preference to the car whenever possible. In particular, one to one meetings are moved online as much as reasonably possible and there is a wider move to remote online training.

The 143 electric vehicles sold in the past year which will collectively save in the region of 4.6m tonnes of tailpipe carbon emissions every year even when compared to the latest ultra-low emission diesel bus. In reality, these new buses tend to replace older buses so the actual carbon savings will be much higher.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Richard Basil Crump
Director
7 November 2024
PELICAN ENGINEERING COMPANY (SALES), LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PELICAN ENGINEERING COMPANY (SALES), LIMITED
- 8 -
Opinion

We have audited the financial statements of Pelican Engineering Company (Sales), Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

PELICAN ENGINEERING COMPANY (SALES), LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PELICAN ENGINEERING COMPANY (SALES), LIMITED (CONTINUED)
- 9 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

 

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

We focussed on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of company minutes and legal expenses. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PELICAN ENGINEERING COMPANY (SALES), LIMITED (CONTINUED)
- 10 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jamie Williams
Senior Statutory Auditor
For and on behalf of BHP LLP
7 November 2024
Chartered Accountants
Statutory Auditor
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
PELICAN ENGINEERING COMPANY (SALES), LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
Notes
£
£
Turnover
3
108,700,114
96,740,867
Cost of sales
(88,209,419)
(84,121,679)
Gross profit
20,490,695
12,619,188
Administrative expenses
(11,863,733)
(9,590,318)
Other operating income
19,250
17,875
Operating profit
4
8,646,212
3,046,745
Interest receivable and similar income
8
6,879
-
0
Interest payable and similar expenses
9
(561,839)
(315,992)
Fair value gains and losses on foreign exchange contracts
9
-
(551,553)
Profit before taxation
8,091,252
2,179,200
Tax on profit
10
(2,093,328)
(449,464)
Profit for the financial year
5,997,924
1,729,736

The profit and loss account has been prepared on the basis that all operations are continuing operations.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,965,151
1,627,316
Current assets
Stocks
14
15,812,292
9,595,239
Debtors
15
13,856,189
8,564,590
Cash at bank and in hand
27,358,460
12,132,968
57,026,941
30,292,797
Creditors: amounts falling due within one year
16
(50,809,813)
(25,231,898)
Net current assets
6,217,128
5,060,899
Total assets less current liabilities
8,182,279
6,688,215
Creditors: amounts falling due after more than one year
17
(2,106,140)
(2,355,263)
Provisions for liabilities
19
(348,611)
(246,648)
Net assets
5,727,528
4,086,304
Capital and reserves
Called up share capital
22
100,000
100,000
Profit and loss reserves
5,627,528
3,986,304
Total equity
5,727,528
4,086,304
The financial statements were approved by the board of directors and authorised for issue on 7 November 2024 and are signed on its behalf by:
Richard Basil Crump
Director
Amelia Mary Crump
Director
Company Registration No. 01589678
PELICAN ENGINEERING COMPANY (SALES), LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
100,000
6,481,568
6,581,568
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
1,729,736
1,729,736
Dividends
11
-
(4,225,000)
(4,225,000)
Balance at 31 March 2023
100,000
3,986,304
4,086,304
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
5,997,924
5,997,924
Dividends
11
-
(4,356,700)
(4,356,700)
Balance at 31 March 2024
100,000
5,627,528
5,727,528
PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

Pelican Engineering Company (Sales), Limited is a private company limited by shares incorporated in England and Wales. The registered office is Altofts Lane, Wakefield Europort, Castleford, West Yorkshire, WF10 5UB.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Pelican Engineering Co Limited. These consolidated financial statements are available from its registered office, Altofts Lane, Wakefield Europort, Castleford, England, WF10 5UB.

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.

 

The directors have prepared cashflows and forecasts, which cover a period of no less than 12 months from the date of signing the accounts, which demonstrate the company can meet its debt repayments as they fall due during the period.

 

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

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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:

Plant and machinery
20% reducing balance
Fixtures and fittings
20% and 50% reducing balance
Computer equipment
33.3% and 50% reducing balance
Motor vehicles
33.3% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.6
Stocks

Stock and work in progress are valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

 

1.7
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.

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.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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, 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.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.11
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.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
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.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

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

1.14
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 the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

 

Assets held under hire purchase agreements are capitalised as tangible fixed assets and are depreciated over the shorter of the lease term and their useful lives. The capital element of future finance payments is included within creditors. Finance charges are allocated to accounting periods over the length of the contract and represent a constant proportion of the balance of capital repayments outstanding.

 

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.

1.16

Research and development

Research and development expenditure is written off as incurred.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
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.

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.

Stock provision

The company considers the recoverability of the cost of stock and associated provisioning required. When calculating the stock provision, management considers the ageing, nature and condition of the stock, as well as applying assumptions around its anticipated saleability and usability.

Warranty provision

Warranty is given to customers as part of the sales process. Management will calculate a year end provision of costs to be incurred on sales in the period.

3
Turnover and other revenue

The company's turnover arises from its principal activity, undertaken entirely in the UK.

4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(4,293)
609,559
Depreciation of owned tangible fixed assets
391,131
345,088
Depreciation of tangible fixed assets held under finance leases
159,875
139,768
Profit on disposal of tangible fixed assets
(17,605)
(29,249)
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,600
13,495
For other services
Taxation compliance services
1,150
675
PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
6
Employees

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

2024
2023
Number
Number
Administration and support
32
28
Production
142
124
Other departments
6
6
180
158

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
8,411,645
6,584,141
Social security costs
945,367
731,316
Pension costs
263,758
154,775
9,620,770
7,470,232
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
219,162
163,070
Company pension contributions to defined contribution schemes
62,301
41,133
281,463
204,203

The number of directors for whom retirement benefits are accruing under money purchase pension schemes amounted to 3 (2023 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
127,562
-
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
6,879
-
0
PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
535,571
300,362
Other finance costs:
Interest on finance leases and hire purchase contracts
24,671
14,178
Other interest
1,597
1,452
561,839
315,992
Other interest shown separately:
Fair value losses on foreign exchange contract
-
551,553
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,995,725
339,843
Adjustments in respect of prior periods
(4,360)
27,973
Total current tax
1,991,365
367,816
Deferred tax
Origination and reversal of timing differences
101,963
81,648
Total tax charge
2,093,328
449,464

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
8,091,252
2,179,200
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
2,022,813
414,048
Tax effect of expenses that are not deductible in determining taxable profit
55,816
9,167
Change in unrecognised deferred tax assets
3,526
20,831
Adjustments in respect of prior years
(4,360)
27,973
Depreciation on assets not qualifying for tax allowances
15,533
(22,555)
Taxation charge for the year
2,093,328
449,464
PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
11
Dividends
2024
2023
£
£
Dividends paid
4,356,700
4,225,000
12
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
1,704,452
556,626
1,619,050
3,880,128
Additions
438,846
86,960
413,730
939,536
Disposals
-
0
(428)
(158,899)
(159,327)
At 31 March 2024
2,143,298
643,158
1,873,881
4,660,337
Depreciation and impairment
At 1 April 2023
1,085,171
413,448
754,193
2,252,812
Depreciation charged in the year
162,106
50,520
338,380
551,006
Eliminated in respect of disposals
-
0
(350)
(108,282)
(108,632)
At 31 March 2024
1,247,277
463,618
984,291
2,695,186
Carrying amount
At 31 March 2024
896,021
179,540
889,590
1,965,151
At 31 March 2023
619,281
143,178
864,857
1,627,316

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
£
£
Motor vehicles
478,230
379,227
13
Financial instruments
2024
2023
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
(551,553)
551,553
PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Financial instruments
(Continued)
- 23 -
Hedging arrangements

The company enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency payables. At 31 March 2024, the outstanding contracts all mature within 6 months of the year end. The company is committed to buy RMB194,877,260 and pay a fixed sterling £21,675,930.

 

The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for GBP:RMB.

14
Stocks
2024
2023
£
£
Chassis stocks
10,210,959
4,406,145
Work in progress
501,860
84,843
Parts stock
5,099,473
5,104,251
15,812,292
9,595,239
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
12,246,641
8,212,301
Other debtors
1,115,421
39,387
Prepayments and accrued income
494,127
312,902
13,856,189
8,564,590
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
18
26,290,334
5,420,794
Obligations under finance leases
141,041
110,053
Trade creditors
2,498,240
3,075,215
Amounts owed to group undertakings
10,437,580
7,021,773
Corporation tax
1,342,870
156,811
Other taxation and social security
7,563,174
6,388,184
Derivative financial instruments
-
0
551,553
Other creditors
693,737
238,070
Accruals and deferred income
1,842,837
2,269,445
50,809,813
25,231,898
PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
16
Creditors: amounts falling due within one year
(Continued)
- 24 -

Security has been given on the bank loans and overdrafts of £26,290,334 (2023 - £5,420,795) and the obligations under finance leases of £141,041 (2023 - £110,053).

 

Amounts due to parent undertaking are interest free and repayable on demand.

 

17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Loans and overdrafts
18
1,937,836
2,196,252
Obligations under hire purchase contracts
168,304
159,011
2,106,140
2,355,263

Security has been given on the bank loans and overdrafts of £1,937,836 (2023 - £2,196,252) and the obligations under finance leases of £168,304 (2023 - £159,011).

Amounts included above which fall due after five years are as follows:
Payable by instalments
332,751
323,630
18
Loans and overdrafts
2024
2023
£
£
Bank loans
28,228,170
7,617,046
Payable within one year
26,290,334
5,420,794
Payable after one year
1,937,836
2,196,252

The bank loans and overdrafts are secured by a mortgage over the company's freehold property, a fixed and floating charge over the assets of the company and an unlimited multilateral guarantee given by the holding company and fellow subsidiary company.

 

Interest is charged on the loans at between 2.5% and 4% above base rate.

 

The obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.

 

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
19
Provisions for liabilities
2024
2023
£
£
Deferred tax liabilities
20
348,611
246,648
20
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
ACAs
351,971
249,114
Other timing differences
(3,360)
(2,466)
348,611
246,648
2024
Movements in the year:
£
Liability at 1 April 2023
246,648
Charge to profit or loss
101,963
Liability at 31 March 2024
348,611

Of the deferred tax liability set out above, £113,000 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature in the same period.

21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
263,758
154,775

The company operates a defined contribution pension scheme for all qualifying employees.

22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000

Each ordinary share is entitled to one vote in any circumstances.

PELICAN ENGINEERING COMPANY (SALES), LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
23
Financial commitments, guarantees and contingent liabilities

The company is party to a trade finance agreement with the bank in relation to letters of credit. As at 31 March 2024, the maximum liability was £23,995,963 (2023 - £13,937,261).

24
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

2024
2023
Amounts due from related parties
£
£
Other related parties
729,249
-
25
Directors' transactions

Interest free loans have been granted by the directors to the company as follows:

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors Loan
-
86,332
1,356,700
(846,443)
596,589
86,332
1,356,700
(846,443)
596,589
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