Company registration number 03085668 (England and Wales)
VIDECON LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
VIDECON LTD
COMPANY INFORMATION
Directors
A Croston
M J Rushall
Secretary
C Seddon
Company number
03085668
Registered office
Unit 1 Concept Business Park
Smithies Lane
Heckmondwike
WF16 0PN
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
VIDECON LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
VIDECON LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 1 -
The directors present the strategic report for the year ended 31 August 2024.
Business review and performance for the year
The results for the year ended 31 August 2024 are set out in the attached financial statements. The company continued its principal activities in the security, fire protection and access controls sectors.
Turnover rose by over 11% as management continued to drive the company forward with solid sales growth across all business sectors.
The gross margin remained consistent during the year with gross profit growing in proportion to sales growth while successfully navigating foreign exchange risk. The cost base increased as a percentage of revenue and, while being under inflationary pressure throughout the period, a strong growth in operating profit was reported.
With the economic climate continuing to be challenging, there has been a keen focus on managing working capital effectively during the year.
Strict credit control procedures have led to an improvement in debtor days in the year and have ensured that bad debts are minimised.
Inventory levels continue to be closely managed leading to stock days improving in the year and we continue to work closely with our supply partners to ensure credit lines are maintained at desired levels.
The business performance in the year has been in line with expectations and the directors continue to be pleased with the progress made having seen a further increase in net assets in the year
We will continue to keep tight control on all operational and other costs.
Trading conditions in our industry continue to be competitive. Videcon will continue to provide first class products and services to our customers at competitive prices. This approach ensures that Videcon is well placed to benefit from any increase in demand.
We will continue to monitor the performance of the company against KPIs and forecasts on a regular basis and make changes where necessary.
Principal risks and uncertainties
Operational risk
The company has solid reporting systems and procedures and produces timely and accurate management information which is regularly reviewed by the management team.
The company continues to take measures to manage the potential supply issues from unpredictable delivery times from overseas suppliers arising from Brexit related import delays and the continuing issues on the Red Sea. These risks have been mitigated by raising stock levels of key lines where necessary with the company having the necessary in-house skills to proactively deal with supply chain disruptions.
Price risk
The company is exposed to downward pressure on margin resulting from current economic and market conditions. The risk is mitigated by improving efficiencies and managing foreign exchange risk.
VIDECON LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 2 -
Principal risks and uncertainties
Credit risk
The credit risk is principally attributable to trade debtors. The risk is mitigated by maintaining a strict credit policy and effective credit rating of current and prospective customers.
The company has no concentration of credit risk with exposure spread over a large number of customers.
Trade creditors are managed by ensuring sufficient funds are available to meet the amounts due.
Liquidity risk
The company ensures that it has sufficient banking facilities and funding to meet its commitments. It operates a detailed cash flow forecast, has developed a strong relationship with its bank and manages its working capital closely.
Financial key performance indicators
The directors consider the financial KPI’s of the business to be:
Turnover
Gross margin
Operational costs
Debtor levels
Stock levels
These are monitored on a monthly basis and corrective action taken as necessary.
Other key performance indicators
In addition, non-financial KPI’s are:
High standard of customer service
Employment of a strong management team
Health and safety compliance
Good environmental compliance
Future developments
The directors aim to continue with the management policies that have resulted in growth in sales and profitability over the last few years.
New product offerings continue to be explored to ensure we remain a competitive and desirable supply line for our customer base.
A Croston
Director
6 February 2025
VIDECON LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 August 2024.
Principal activities
The principal activity of the company continued to be that of security systems service activites.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £581,758. 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:
A Croston
M J Rushall
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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
A Croston
Director
6 February 2025
VIDECON LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2024
- 4 -
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.
VIDECON LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VIDECON LTD
- 5 -
Opinion
We have audited the financial statements of Videcon Ltd (the 'company') for the year ended 31 August 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:
give a true and fair view of the state of the company's affairs as at 31 August 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.
VIDECON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VIDECON LTD
- 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
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.
VIDECON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VIDECON LTD
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Chris Woodroffe
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
6 February 2025
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
VIDECON LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
33,361,486
30,005,860
Cost of sales
(24,868,375)
(22,313,001)
Gross profit
8,493,111
7,692,859
Distribution costs
(443,007)
(456,592)
Administrative expenses
(5,322,574)
(4,893,298)
Other operating income
25,000
Operating profit
4
2,752,530
2,342,969
Interest payable and similar expenses
6
(552,518)
(462,769)
Profit before taxation
2,200,012
1,880,200
Tax on profit
7
(558,413)
(422,018)
Profit for the financial year
1,641,599
1,458,182
The profit and loss account has been prepared on the basis that all operations are continuing operations.
VIDECON LTD
BALANCE SHEET
AS AT 31 AUGUST 2024
31 August 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
308,789
328,140
Current assets
Stocks
10
4,662,987
4,142,831
Debtors
11
22,429,994
18,262,292
Cash at bank and in hand
241,578
1,853,006
27,334,559
24,258,129
Creditors: amounts falling due within one year
13
(17,417,949)
(15,377,711)
Net current assets
9,916,610
8,880,418
Total assets less current liabilities
10,225,399
9,208,558
Creditors: amounts falling due after more than one year
14
(326,500)
(342,500)
Provisions for liabilities
Provisions
15
378,000
400,000
Deferred tax liability
16
60,000
65,000
(438,000)
(465,000)
Net assets
9,460,899
8,401,058
Capital and reserves
Called up share capital
18
50,005
50,005
Share premium account
19
30,018
30,018
Capital redemption reserve
9,988
9,988
Profit and loss reserves
9,370,888
8,311,047
Total equity
9,460,899
8,401,058
The financial statements were approved by the board of directors and authorised for issue on 6 February 2025 and are signed on its behalf by:
A Croston
Director
Company Registration No. 03085668
VIDECON LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 10 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 September 2022
50,005
30,018
9,988
7,691,598
7,781,609
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
-
-
1,458,182
1,458,182
Dividends
8
-
-
-
(838,733)
(838,733)
Balance at 31 August 2023
50,005
30,018
9,988
8,311,047
8,401,058
Year ended 31 August 2024:
Profit and total comprehensive income for the year
-
-
-
1,641,599
1,641,599
Dividends
8
-
-
-
(581,758)
(581,758)
Balance at 31 August 2024
50,005
30,018
9,988
9,370,888
9,460,899
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
- 11 -
1
Accounting policies
Company information
Videcon Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1 Concept Business Park, Smithies Lane, Heckmondwike, WF16 0PN.
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Videcon Holdings Limited. These consolidated financial statements are available from its registered office, Unit 1 Concept Business Park, Smithies Lane, Heckmondwike, West Yorkshire, WF16 0PN.
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 sold 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.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 12 -
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:
Leasehold improvements
Straight line over life of lease
Plant and equipment
25% to 33.3% straight line
Fixtures and fittings
20% to 25% straight line
Motor vehicles
20% 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.
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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 13 -
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.
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.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 14 -
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.
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
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.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 15 -
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
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
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
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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 in the period are included in profit or loss.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 16 -
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.
Recoverability of receivables
The company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience of recoverability, and the credit profile individual or groups of customers.
Warranty provision
Provision is made for predicted future warranty costs. The estimate is based on the historical return rate of products sold during the year adjusted for an exceptional returns, anomalies, and the ageing profile on which the products were initially sold.
Stock provision
Provision is made for stock which is slow moving or not usable. The estimate is based on approximations of the length of time it would take to sell the year end stock holding by reference to sale volumes in the financial year. Provision is also made for returned stock items which have not yet been fully inspected and reprocessed.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Product sales
33,361,486
30,005,860
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
32,968,548
29,437,989
Rest of Europe
392,938
567,871
33,361,486
30,005,860
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 17 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(34,233)
(1,262)
Fees payable to the company's auditor for the audit of the company's financial statements
34,500
31,700
Depreciation of owned tangible fixed assets
96,150
83,824
Operating lease charges
427,565
393,944
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
2
2
Other staff
59
60
Total
61
62
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,420,877
2,243,744
Social security costs
253,708
239,375
Pension costs
193,567
163,610
2,868,152
2,646,729
6
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
552,518
440,800
Other interest
21,969
552,518
462,769
7
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
562,000
366,000
Adjustments in respect of prior periods
1,413
20,359
Total current tax
563,413
386,359
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
7
Taxation
2024
2023
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
(5,000)
35,659
Total tax charge
558,413
422,018
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
2,200,012
1,880,200
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.52%)
550,003
404,619
Tax effect of expenses that are not deductible in determining taxable profit
26,923
20,747
Tax effect of income not taxable in determining taxable profit
(595)
Group relief
(19,701)
(39,227)
Permanent capital allowances in excess of depreciation
477
(32)
Under/(over) provided in prior years
1,413
20,359
Other differences
(702)
16,147
Taxation charge for the year
558,413
422,018
8
Dividends
2024
2023
£
£
Interim paid
581,758
838,733
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 19 -
9
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 September 2023
500,107
93,043
480,197
7,469
1,080,816
Additions
11,576
65,223
76,799
At 31 August 2024
500,107
104,619
545,420
7,469
1,157,615
Depreciation and impairment
At 1 September 2023
478,735
51,058
220,020
2,863
752,676
Depreciation charged in the year
6,287
9,417
78,952
1,494
96,150
At 31 August 2024
485,022
60,475
298,972
4,357
848,826
Carrying amount
At 31 August 2024
15,085
44,144
246,448
3,112
308,789
At 31 August 2023
21,372
41,985
260,177
4,606
328,140
10
Stocks
2024
2023
£
£
Finished goods and goods for resale
4,662,987
4,142,831
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
7,613,674
7,320,438
Corporation tax recoverable
607,524
505,159
Amounts owed by group undertakings
12,426,377
8,346,194
Other debtors
1,076,165
1,601,169
Prepayments and accrued income
706,254
489,332
22,429,994
18,262,292
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 20 -
12
Loans and overdrafts
2024
2023
£
£
Bank loans
6,421,765
6,545,177
Other loans
326,500
342,500
6,748,265
6,887,677
Payable within one year
6,421,765
6,545,177
Payable after one year
326,500
342,500
Included within 'bank loans' is an invoice discounting facility of £4,810,071 (2023 - £5,001,541), which is secured against the company's trade debtors. The remaining balance relates to a trade loan facility which is secured by a fixed and floating charge over certain assets of the company.
The bank loan and invoice discounting are further secured by an unlimited multilateral guarantee by the company and its fellow group companies.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
12
6,421,765
6,545,177
Trade creditors
6,886,371
6,826,383
Corporation tax
1,018,000
666,000
Other taxation and social security
439,564
567,529
Other creditors
1,897,365
13,748
Accruals and deferred income
754,884
758,874
17,417,949
15,377,711
For bank loans and overdrafts see note 12.
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other borrowings
12
326,500
342,500
Other borrowings of £326,500 (2023 - £342,500) is secured by a fixed and floating charge over certain assets of the company and by a personal guarantee given by a director.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 21 -
15
Provisions for liabilities
2024
2023
£
£
Warranty provision
378,000
400,000
Movements on provisions:
Warranty provision
£
At 1 September 2023
400,000
Reversal of provision
(22,000)
At 31 August 2024
378,000
16
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
64,000
68,000
Short term timing differences
(4,000)
(3,000)
60,000
65,000
2024
Movements in the year:
£
Liability at 1 September 2023
65,000
Credit to profit or loss
(5,000)
Liability at 31 August 2024
60,000
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.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 22 -
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
193,567
163,610
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
As at the year end the company had unpaid pension contributions totalling £15,295 (2023 - £12,948).
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
50,000
50,000
50,000
50,000
Ordinary C share of £1 each
1
1
1
1
Ordinary E share of £1 each
1
1
1
1
Ordinary G share of £1 each
1
1
1
1
Ordinary K share of £1 each
1
1
1
1
Ordinary I share of £1 each
1
1
1
1
50,005
50,005
50,005
50,005
The 'A' ordinary shares carry rights to vote, rights to receive dividends and rights to participate in the event of a sale or winding up of the company.
All other issued shares in classes have rights to dividends but carry no voting rights and are non-participating in the event of a sale or winding up of the company. The holders of such shares are only entitled to the par value of the shares held in such eventuality but do not rank ahead of other shareholders.
19
Share premium account
The share premium represents the amount paid above the par value of the shares.
20
Share based payments
On 21st July 2021, options over shares in this company's parent, Videcon Holdings Limited, were granted to certain employees of Videcon Limited. However, on grounds of materiality and given uncertainty over the exact vesting period and vesting likelihood, the directors have not deemed it necessary to provide for this in the financial statements, and accordingly there is no impact on the reported profits arising from the grant of these share options.
21
Financial commitments, guarantees and contingent liabilities
The group's bankers have issued a guarantee for ongoing VAT liabilities of £150,000 (2023 - £150,000) in favour of HM Revenue & Customers with recourse to Videcon Limited. At the balance sheet date all VAT payments are up to date.
VIDECON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 23 -
22
Operating lease commitments
Lessee
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
359,109
306,397
Between two and five years
1,333,746
1,184,374
In over five years
1,782,000
1,942,661
3,474,855
3,433,432
23
Related party transactions
Transactions with related parties
During the year, the company had loan balances owed by directors. The balances outstanding at the year end totalled £401,525 (2023 - £1,538,879). The maximum loan balance oustanding during the year was £1,538,879 (2023 - £1,538,879). The loans are interest free and repayable on demand.
During the year the Company paid rent and services charges of £320,494 (2023 - £290,618) to a company with a director in common in respect of the premises from which they operate.
Included within other debtors at year end is a balance of £616,772 (2023 - £62,290) due from other connected companies.
24
Ultimate controlling party
The ultimate controlling party is A Croston by virtue of a majority shareholding in the immediate and ultimate parent company Videcon Holdings Limited.
25
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
53,968
57,213
Company pension contributions to defined contribution schemes
5,983
5,983
59,951
63,196
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
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