Company Registration No. 02865572 (England and Wales)
LED ELECTRICAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
LED ELECTRICAL LIMITED
COMPANY INFORMATION
Directors
K A Higginson
K V Higginson
A Fay
M T Fay
Company number
02865572
Registered office
Electricity House,Kenyon Road
Lomeshaye Industrial Estate
Brierfield
Nelson
BB9 5SP
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
LED ELECTRICAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
LED ELECTRICAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present the strategic report for the year ended 31 December 2024.
Business Review
Sales for the year amounted to 16,693,675 which when compared to those of the previous year, 19,114,111, show a decrease which was mainly down to a slow first half of the year. This was carried over from the last quarter of 2023 where the industry went quiet.
Trading margins in the financial year showed a very slight increase generally being in line with forecasts. Margins are expected to continue to be under pressure in the coming year given the extremely competitive nature of the industry. Overheads are constantly monitored with, if necessary, remedial actions being taken.
Although turnover was significantly down in 2024 compared to 2023 the company has managed to maintain the improved margin level the company set as a major point of concern a few years ago.
In summary, the directors are pleased with the outcome of the 2024 financial year and have put measures in place to continue results for the 2025 financial year. They are satisfied that the company has available adequate financial resources to meet the on-going challenges still being, and continuing to be, faced by all trading organisations.
Looking forward, the company sees 2025 as a year of opportunity to further strengthen in the renewables market. The directors believe that sales can be increased in the heating and ventilation market and have put measures in place to hopefully make this happen. The directors are always open and looking for other opportunities and markets as they arise.
The directors also feel that 2025 will see a greater opportunity for public sector projects and we are positioning ourselves to take advantage of this area through our customer base.
Principal risks and uncertainties
The electrical wholesaling industry faces numerous challenges and risks but in general these may be summarised as being a high level of bad debts, pressures on margins and poor Imported products. To try and counteract these challenges and risks, the company sets credit limits on all its customers using credit reference agencies, has credit insurance on the majority of its customers, monitors margins on all product lines and will only buy its products from established suppliers who have a proven history of selling widely accepted brands. These risks and the control of them by the company have not changed during the year.
The directors are also mindful that throughout 2025 the new minimum wage and national insurance increases will impact the business and therefore have placed even more focus on trying to increase margins to try to absorb these additional overheads.
Financial key performance indicators
Detailed financial monitoring is constantly undertaken. This includes, but is not limited to, review of margins for each customer, analysis by customer of credit days taken, monthly management accounts for each branch, stock holding days for each branch and monthly review and comparison of Key Performance Indicators both by branch and the company as a whole. The significant KPIs are gross profit rates, labour to sales ratio, sales per day, transport costs, finance costs per branch, stock holding days per branch and direct profit contribution per branch and employee.
LED ELECTRICAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Financial risk management objectives and policies
The company finances its operations through a mixture of retained profits and, where necessary, to fund expansion or capital expenditure programmes through bank borrowing.
The management's objectives are to:
As the company's funds are invested in sterling bank deposit accounts there is no price exchange risk exposure. The company's funds are held primarily in short term variable deposit accounts. The directors believe that this gives them the flexibility to release cash resources at short notice and also allow them to take advantage of changing conditions in the finance markets as they arise.
M T Fay
Director
17 July 2025
LED ELECTRICAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company continued to be that of the sale of electrical goods.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £120,888. 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:
K A Higginson
K V Higginson
A Fay
M T Fay
Auditor
The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
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.
Post balance sheet events
There have been no significant events affecting the company since the year end.
LED ELECTRICAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
M T Fay
Director
17 July 2025
LED ELECTRICAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LED ELECTRICAL LIMITED
- 5 -
Opinion
We have audited the financial statements of LED Electrical Limited (the 'company') for the year ended 31 December 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 December 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.
LED ELECTRICAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LED ELECTRICAL LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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.
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, 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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
LED ELECTRICAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LED ELECTRICAL LIMITED (CONTINUED)
- 7 -
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the matters discussed among the audit engagement team and relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;
any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
LED ELECTRICAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LED ELECTRICAL LIMITED (CONTINUED)
- 8 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Christopher Johnson FCA (Senior Statutory Auditor)
For and on behalf of PM+M Solutions for Business LLP, Statutory Auditor
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
17 July 2025
LED ELECTRICAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
16,693,675
19,114,110
Cost of sales
(13,068,720)
(14,987,302)
Gross profit
3,624,955
4,126,808
Distribution costs
(1,746,965)
(1,849,442)
Administrative expenses
(844,930)
(986,722)
Operating profit
4
1,033,060
1,290,644
Interest receivable and similar income
24,509
399
Interest payable and similar expenses
7
(132,445)
(144,064)
Profit before taxation
925,124
1,146,979
Tax on profit
8
(253,175)
(295,302)
Profit for the financial year
671,949
851,677
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
LED ELECTRICAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
255,876
349,055
Current assets
Stocks
11
1,329,567
1,736,043
Debtors
12
7,246,580
6,460,385
Cash at bank and in hand
1,769,076
141,693
10,345,223
8,338,121
Creditors: amounts falling due within one year
13
(4,685,113)
(3,304,663)
Net current assets
5,660,110
5,033,458
Total assets less current liabilities
5,915,986
5,382,513
Provisions for liabilities
Deferred tax liability
14
55,957
73,545
(55,957)
(73,545)
Net assets
5,860,029
5,308,968
Capital and reserves
Called up share capital
16
345,910
345,910
Profit and loss reserves
5,514,119
4,963,058
Total equity
5,860,029
5,308,968
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 17 July 2025 and are signed on its behalf by:
M T Fay
Director
Company registration number 02865572 (England and Wales)
LED ELECTRICAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2023
345,910
4,492,380
4,838,290
Year ended 31 December 2023:
Profit and total comprehensive income
-
851,677
851,677
Dividends
9
-
(380,999)
(380,999)
Balance at 31 December 2023
345,910
4,963,058
5,308,968
Year ended 31 December 2024:
Profit and total comprehensive income
-
671,949
671,949
Dividends
9
-
(120,888)
(120,888)
Balance at 31 December 2024
345,910
5,514,119
5,860,029
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
1
Accounting policies
Company information
LED Electrical Limited is a private company limited by shares incorporated in England and Wales. The registered office is Electricity House,Kenyon Road, Lomeshaye Industrial Estate, Brierfield, Nelson, BB9 5SP.
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 LED Holdings Limited. These consolidated financial statements are available from its registered office, Electricity house, Kenyon Road, Lomeshaye Industrial Estate, Brierfield, BB9 5SP .
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on 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.
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
at varying rates on cost
Fixtures and fittings
15% on reducing balance
Computers
30% on reducing balance
Motor vehicles
25% on 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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
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.
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
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.
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
The main areas of judgement are in relation to stock provisions and bad debt provisions. Stock provision is estimated by reviewing product life and forecasted sales. The bad debt provision is estimated by the directors using their historic knowledge and customer payment terms.
The directors do not believe there to be any other critical judgements or key sources of estimation uncertainty.
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
3
Turnover and other revenue
All turnover arose within the United Kingdom and from the sale of electrical goods.
2024
2023
£
£
Other revenue
Interest income
24,509
399
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,135
20,129
Depreciation of owned tangible fixed assets
83,021
83,626
Loss/(profit) on disposal of tangible fixed assets
9,987
(6,726)
Operating lease charges
71,467
44,119
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Distribution
34
41
Administrative and Support
14
10
Total
48
51
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,551,129
1,643,874
Social security costs
153,551
165,912
Pension costs
90,760
53,487
1,795,440
1,863,273
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
95,155
88,973
Company pension contributions to defined contribution schemes
18,000
22,500
113,155
111,473
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 4).
7
Interest payable and similar expenses
2024
2023
£
£
Interest on invoice finance arrangements
132,445
144,064
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
270,763
289,011
Deferred tax
Origination and reversal of timing differences
(17,588)
5,919
Changes in tax rates
372
Total deferred tax
(17,588)
6,291
Total tax charge
253,175
295,302
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
8
Taxation
(Continued)
- 18 -
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
925,124
1,146,979
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
231,281
269,769
Tax effect of expenses that are not deductible in determining taxable profit
21,529
24,877
Effect of change in corporation tax rate
372
Permanent capital allowances in excess of depreciation
365
284
Taxation charge for the year
253,175
295,302
9
Dividends
2024
2023
£
£
Interim paid
120,888
380,999
10
Tangible fixed assets
Freehold land and buildings
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2024
74,827
325,468
289,596
496,586
1,186,477
Additions
10,444
29,983
40,427
Disposals
(84,937)
(84,937)
At 31 December 2024
74,827
325,468
300,040
441,632
1,141,967
Depreciation and impairment
At 1 January 2024
73,537
293,193
269,178
201,514
837,422
Depreciation charged in the year
193
8,767
7,178
66,883
83,021
Eliminated in respect of disposals
(34,352)
(34,352)
At 31 December 2024
73,730
301,960
276,356
234,045
886,091
Carrying amount
At 31 December 2024
1,097
23,508
23,684
207,587
255,876
At 31 December 2023
1,290
32,275
20,418
295,072
349,055
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
11
Stocks
2024
2023
£
£
Finished goods
1,329,567
1,736,043
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,311,511
3,574,662
Other debtors
246,737
225,846
Prepayments and accrued income
24,746
16,229
4,582,994
3,816,737
2024
2023
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
2,663,586
2,643,648
Total debtors
7,246,580
6,460,385
Included in other debtors is an amount owed by directors of £18,098. More details can be found in note 18.
Amounts owed by group undertakings are not subject to any formal arrangements but the directors have confirmed that the loan will not be recalled for 12 months from the date of signing.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Proceeds of factored debts
1,326,260
539,169
Trade creditors
2,429,282
1,831,687
Corporation tax
270,764
288,785
Other taxation and social security
238,436
216,441
Other creditors
1,529
Accruals and deferred income
418,842
428,581
4,685,113
3,304,663
Proceeds of factored debt balances of £1,326,260 (2023 - £539,169) relate to an invoice financing facility which is secured against trade debtors.
Included within other creditors is an amount owed by a director of £1,529. Please see note 18 for more details.
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
14
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
55,957
75,547
Disallowable provisions
-
(2,002)
55,957
73,545
2024
Movements in the year:
£
Liability at 1 January 2024
73,545
Credit to profit or loss
(17,588)
Liability at 31 December 2024
55,957
Deferred Tax is expected to reverse out over the useful life of the tangible assets assets held by the business. It should be noted that this reversal is expected to be offset by the capital allowances granted on future asset purchases.
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
90,760
53,487
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.
Contributions totalling £8,802 (2023: £9,044) were payable to the fund at the balance sheet date
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
345,910
345,910
345,910
345,910
LED ELECTRICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
17
Operating lease commitments
As 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
72,906
56,039
Between two and five years
107,102
80,700
180,008
136,739
18
Directors' transactions
The maximum balance owed by Director A in the year was £20,192.
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Director A
-
3,899
(28,516)
6,444
(18,173)
Director B
-
15,963
(20,878)
6,444
1,529
19,862
(49,394)
12,888
(16,644)
19
Ultimate controlling party
The smallest and largest company which LED Electrical limited is consolidated into is LED Holdings limited. LED Holdings Limited's accounts can be obtained from Electrical house, Kenyon Road, Brierfield, Nelson BB9 5SP. There is no ultimate controlling party.
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