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Registered number: 04768848







PENN ELCOM LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

 
PENN ELCOM LIMITED
 

COMPANY INFORMATION


Directors
P. J. Stratford 
R. P. Willems 
S. Langdon 
R. C. W. Platt 
C. McGrath
R. Parda 




Registered number
04768848



Registered office
1st Floor Sackville House
143-149 Fenchurch Street

London

EC3M 6BN




Independent auditors
Wilder Coe Ltd
Chartered Accountants & Statutory Auditors

1st Floor Sackville House

143-149 Fenchurch Street

London

EC3M 6BL





 
PENN ELCOM LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 3
Directors' Report
 
4 - 5
Independent Auditors' Report
 
6 - 9
Statement of Income and Retained Earnings
 
10
Balance Sheet
 
11
Statement of Cash Flows
 
12 - 13
Analysis of Net Debt
 
14
Notes to the Financial Statements
 
15 - 28


 
PENN ELCOM LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024

Introduction
 
The Directors present the strategic report of the company for the year ended 31 December 2024.

Background
 
Penn Elcom Limited (the "Company") manufactures and distributes over 3000 catalogue products and is a leading manufacturer of quality flight case hardware, speaker hardware, 19 inch racking and accessories.

Development, performance and review
 
The company made a profit before tax of £736,121 (2023: £3,254,019) for the year.
The Directors are driven to continue with long term-term value for the organisation with process to develop and implement growth, including new products and markets.
The directors are satisfied with the performance of the Company during the year. Their aim is to maintain the level of performance in the coming year.
Penn Elcom Limited showed a decrease in turnover of 4.1%. This downturn was due to GDP in the UK being flat in the second half of 2024 and the high cost of inflation was found to be challenging in 2024. Economic uncertainty and geopolitical uncertainty also had an impact. 
The Company performed relatively well as the showbiz industry activity returned to pre-lock-down levels during the year where Penn Elcom derives the majority of its income. In doing so we managed to make the best use of our resources by creating new products.

Principle risks and uncertainties

The Directors believe the principal risks and uncertainties facing the business are general business and market risks as experienced by most businesses of our nature.
Changes to the political and economic climate and their impact on rates of exchange and freedom of trade are also of primary concern, however we believe that the company is well positioned to mitigate these risks and take advantage of opportunities as they arrive. With the pandemic almost behind us, the Directors are fully aware of all the emerging risks facing the Company and threatening our business model.
The Company’s exposure to the price of raw materials is important therefore purchase strategies are monitored regularly as well as selling prices.

2022 Russian invasion of Ukraine
 
This had a negative impact and triggered a massive shock to the global economy squeezing supply and pushing prices to unprecedented levels especially as we sourced our wood from Ukraine. The company responded rapidly and dynamically to the changing situation which allowed the production operations to continue to operate throughout by sourcing elsewhere.

Withdrawal of UK from European Union (Brexit)

On the 31 December 2020 the transition period between the UK and the EU ended and the new rules on exports, imports, tariffs, data and hiring were introduced. For Penn Elcom Limited a significant proportion of turnover and the supply chain is UK domestic, which reduces the impact of Brexit. As a result, in the period since 31 December 2020 the Company has seen no significant impact from the new rules introduced.

Suez Canal

The issues surrounding the Suez Canal has disrupted businesses, primarily through delays in shipping and supply chains, thus leading to increased costs, shortage of goods, and production delays.

Page 1

 
PENN ELCOM LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Financial risk management, objectives and policies

Foreign currency risk

The Company’s currency risk is controlled by natural hedge wherever possible and where there is an excess, the Company may take out foreign currency contracts accordingly.

Interest rate risk

The Company’s policy is to limit its cost of borrowing by paying cash using a mix of debt types.

Credit risk

The Company’s policy is to insure its trade debtors and exercise strong credit control procedures.

Price risk

The Company’s products are subject to changing market prices at both selling and purchasing levels. It manages the risk by striving to be a low-cost producer.

Liquidity risk

The company aims to mitigate liquidity risk by managing cash generation by its operations and applying cash collection targets. Investment is carefully controlled, with authorisation limits operating at board level and cash payback periods applied as part of the investment appraisal process.

Position of the business at year end

For the year ended 31 December 2024 the Company posted a profit before tax of £736,121 (2023: £3,254,019). The Directors are pleased with the performance in the year and are confident of repeat performance in the future.
The Company’s balance sheet remains strong with a Net Asset position of £17,937,049 increasing from £17,324,701 as at 31 December 2023, which puts us in a strong position to weather any future economic turmoil out with our control.

Page 2

 
PENN ELCOM LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Financial key performance indicators:

The Directors monitor closely the performance of the business using key performance indicators (KPI’s) for both financial and non-financial.
These KPI's include:
Financial key performance indicators
 
Net Assets: reviewed on a monthly basis by the Directors throughout the year. Net Assets as at the year ended 31 December 2024 are £17,937,049 (2023: £17,324,701).
 
Gross Profit Margin:  reviewed by Directors throughout the year. Raw material levels are regularly reviewed, together with the level of sales throughout the year. The Gross Profit Margin was 25.8% for the year ended 31 December 2024 (2023: 24.8%).
 
Operating Margin:  reviewed by Directors throughout the year. Administrative expense levels are regularly reviewed, together with one off exceptional items throughout the year. The Operating Margin was 2.2% for the year ended 31 December 2024 (2023: 5.3%).
 
Inventory turnover ratio for the year ended 31 December 2024 was 2.9 (2023: 2.9).
 
Inventory days for the year ended 31 December 2024 are 118.1 (2023: 126.4).
 
EBITDA is reviewed regularly to ascertain the progression of the Company on a monthly basis. For the year ended 31 December 2024 EBITDA was £2,113,641 (2023: £4,805,646).
 
Non-Financial key performance indicators
 
Customer Service: the level of quality and performance are continually reviewed by Directors’ to maximise the satisfaction of customers.
 
Staff retention and wellbeing: monitored by Directors’ to ensure employee welfare is at the forefront of the Company and staff retention is maintained.
 
Cashflow targets: forecast short term cashflows are reviewed weekly and monthly to ensure the Company has sufficient funds available to continue to trade.
 
The Directors consider the above ratios to be at an acceptable level for the year ended 31 December 2024 and can be calculated using the figures shown within the primary statements which follow this report.
During the year, dividends of £Nil were paid 
(2023: £922,757).


This report was approved by the board on 3 November 2025.



R. P. Willems
Director

Page 3

 
PENN ELCOM LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


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

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Principal activity

The principal activity of the Company is that of the manufacture and sale of light engineering products and audio equipment.

Results and dividends

The profit for the year, after taxation, amounted to £612,348 (2023 - £2,932,048).

During the year, dividends totalling £Nil were paid (2023: £922,757).

Page 4

 
PENN ELCOM LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024


Directors

The directors who served during the year were:

P. J. Stratford 
R. P. Willems 
S. Langdon 
R. C. W. Platt 
C. McGrath 
R. Parda 

Disclosure of information to auditors

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

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

Auditors

The auditorsWilder Coe Ltdwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 3 November 2025 and signed on its behalf.
 





R. P. Willems
Director

Page 5

 
PENN ELCOM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENN ELCOM LIMITED
 

Opinion


We have audited the financial statements of Penn Elcom Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of Income and Retained Earnings, the Balance Sheet, the Statement of Cash Flows and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 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.


Basis for opinion


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


Emphasis of matter


We draw your attention to Note 19 to the financial statements, which describes a contingent liability relating to an ongoing legal case involving the Health and Safety Executive (HSE). The outcome and potential financial impact of this matter remain uncertain. Our opinion is not modified in respect of this matter.


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.


Page 6

 
PENN ELCOM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENN ELCOM LIMITED (CONTINUED)


Other information


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


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


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


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


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


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


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
PENN ELCOM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENN ELCOM LIMITED (CONTINUED)


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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as o where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
 
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, company law, tax and pension legislation and distributable profits legislation; and
 
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include operating licence, environmental regulations and health and safety legislation.
 
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprise of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation of claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 8

 
PENN ELCOM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENN ELCOM LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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 Gent BA FCA (Senior Statutory Auditor)
  
 
 
 
 
Wilder Coe Ltd
 
Chartered Accountants & Statutory Auditors
  
1st Floor Sackville House
143-149 Fenchurch Street
London
EC3M 6BL

12 November 2025
Page 9

 
PENN ELCOM LIMITED
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2024

2024
2023
Note
£
£

  

Turnover
 3 
23,822,004
24,841,736

Cost of sales
  
(17,675,034)
(18,678,675)

Gross profit
  
6,146,970
6,163,061

Distribution costs
  
(373,277)
(430,433)

Administrative expenses
  
(6,852,306)
(6,792,086)

Other operating income
 4 
1,592,975
2,381,861

Operating profit
 5 
514,362
1,322,403

Interest receivable and similar income
  
99,599
53,098

Interest payable and similar expenses
  
(71,979)
(66,995)

Investment income and amounts written back on loans
  
194,139
1,945,513

Profit on ordinary activities before taxation
  
736,121
3,254,019

Taxation on profit on ordinary activites
 8 
(123,773)
(321,971)

Profit for the financial year
  
612,348
2,932,048

  

Retained earnings at the beginning of the year
  
6,074,304
4,065,013

Profit for the year
  
612,348
2,932,048

Dividends declared and paid
  
-
(922,757)

Retained earnings at the end of the year
  
6,686,652
6,074,304

The notes on pages 15 to 28 form part of these financial statements.

Page 10

 
PENN ELCOM LIMITED
REGISTERED NUMBER: 04768848

BALANCE SHEET
AS AT 31 DECEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 9 
903,863
1,129,855

Tangible assets
 10 
2,716,063
3,326,861

Investments
 11 
754,275
754,275

  
4,374,201
5,210,991

Current assets
  

Stocks
 12 
5,720,619
6,466,203

Debtors
 13 
17,977,231
15,684,603

Cash at bank and in hand
  
1,292,140
1,711,913

  
24,989,990
23,862,719

Creditors: amounts falling due within one year
 14 
(10,748,126)
(10,671,337)

Net current assets
  
 
 
14,241,864
 
 
13,191,382

Total assets less current liabilities
  
18,616,065
18,402,373

Creditors: amounts falling due after more than one year
 15 
-
(361,966)

 
Provisions for liabilities
  

Deferred taxation
 17 
(679,016)
(715,706)

Net assets
  
17,937,049
17,324,701


Capital and reserves
  

Called up share capital 
 18 
1,463,416
1,463,416

Share premium account
  
9,786,981
9,786,981

Profit and loss account
  
6,686,652
6,074,304

Equity shareholders' funds
  
17,937,049
17,324,701


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 
3 November 2025.




R. P. Willems
Director

The notes on pages 15 to 28 form part of these financial statements.

Page 11

 
PENN ELCOM LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024

2024
2023
£
£

Cash flows from operating activities

Profit for the financial year
612,348
2,932,048

Adjustments for:

Amortisation of intangible assets
225,992
225,992

Depreciation of tangible assets
1,179,148
1,285,040

Profit on disposal of tangible assets
(307,350)
(46,901)

Profit on disposal of listed investments
(176,448)
-

Interest paid
71,979
66,995

Interest received
(99,599)
(53,098)

Dividends received
(17,691)
-

Taxation charge
123,773
298,741

Decrease/(increase) in stocks
745,584
(71,047)

Increase in debtors
(2,576,751)
(305,583)

Decrease/(increase) in amounts owed by group companies
72,097
(2,793,639)

Decrease/(increase) in amounts owed by participating interests
344,807
(183,687)

Increase/(decrease) in creditors
519,125
(924,684)

Increase in amounts owed to group companies
356,721
1,365,228

Corporation tax paid
(766,664)
(175,000)

Net cash generated from operating activities

307,071
1,620,405

Cash flows from investing activities

Purchase of tangible fixed assets
(746,000)
(566,177)

Sale of tangible fixed assets
485,000
130,901

Purchase of listed investments
(500,000)
-

Sale of listed investments
676,448
-

Purchase of unlisted investments
-
(248,253)

Interest received
99,599
53,098

Dividends received
17,691
-

Net cash from/(used in) investing activities

32,738
(630,431)
Page 12

 
PENN ELCOM LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024


2024
2023

£
£



Cash flows from financing activities

Repayment of finance leases
(687,603)
(762,376)

Dividends paid
-
(922,757)

Interest paid
(71,979)
(66,995)

Net cash used in financing activities
(759,582)
(1,752,128)

Net decrease in cash and cash equivalents
(419,773)
(762,154)


Cash and cash equivalents at beginning of year
1,711,913
2,474,067

Cash and cash equivalents at the end of year
1,292,140
1,711,913


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,292,140
1,711,913


The notes on pages 15 to 28 form part of these financial statements.

Page 13

 
PENN ELCOM LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024




At 1 January 2024
Cash flows
At 31 December 2024
£

£

£





Cash at bank and in hand

1,711,913

(419,773)

1,292,140

Finance leases

(687,603)

687,603

-


1,024,310
267,830
1,292,140

The notes on pages 15 to 28 form part of these financial statements.

Page 14

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

1.


General information

Penn Elcom Limited (company number 04768848), having its registered office at 1st Floor Sackville House, 143-149 Fenchurch Street, London, EC3M 6BN, is a private limited company incorporated in England and Wales.
The principal place of business is 9-10 Parsons Road, Parsons Industrial Estate, Washington, NE37 1HB.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

 
2.2

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of turnover can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.3

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis over 20 years to the Statement of Income and Retained Earnings over its useful economic life.

Page 15

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.4

Tangible fixed assets

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

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery
-
19-25% straight-line
Fixtures and fittings
-
25% straight-line/reducing balance
Office equipment
-
20% straight-line
Computer equipment
-
20% straight-line

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

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Income and Retained Earnings.

  
2.5

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each Balance Sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each Balance Sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.6

Valuation of investments

Investments in associates are measured at cost less accumulated impairment.

 
2.7

Stocks

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

At each Balance Sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Income and Retained Earnings.

 
2.8

Debtors

Short-term debtors are measured at transaction price, less any impairment.

Page 16

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.9

Cash and cash equivalents

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

 
2.10

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. 
Investments in non-derivative instruments that are equity to the issuer are measured:
 

 
2.11

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.12

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is British Pound Sterling (GBP).

Transactions and balances

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

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

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised the Statement of Income and Retained Earnings.

 
2.13

Finance costs

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

Page 17

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.14

Research and development

Research and development costs are expensed to the Statement of Income and Retained Earnings in the year which they are incurred, since it is not possible to demonstate that such costs will generate future economic benefits.

 
2.15

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the Statement of Income and Retained Earnings on a straight-line basis over the lease term.

 
2.16

Dividends

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

 
2.17

Pensions

Defined contribution pension plan

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

The contributions are recognised as an expense in the Statement of Income and Retained Earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.18

Interest income

Interest income is recognised in the Statement of Income and Retained Earnings using the effective interest method.

 
2.19

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of Income and Retained Earnings in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
 
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

Page 18

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.20

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Income and Retained Earnings.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Company can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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


Page 19

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

3.


Turnover

The whole of the turnover is attributable to principal activity of the Company, being that of the manufacture and sale of light engineering products and audio equipment.
The geographical split of turnover has not been disclosed on the grounds that it is prejudicial to the Company's interests.


4.


Other operating income

2024
2023
£
£

Sundry income
1,592,975
2,381,861



.



Sundry income includes the following items:

2024
2023
£
£



Sundry scrap sales
277,047
316,451

Management charges
810,000
1,350,000

Distribution, carriage and freight
458,654
461,670

Miscellaneous income
47,274
253,740

1,592,975
2,381,861


5.


Operating profit

The operating profit is stated after charging/(crediting):

2024
2023
£
£

Research & development charged as an expense
43,091
76,692

Exchange differences
198,091
(206,716)

Operating lease rentals
675,214
644,074

Auditors' remuneration
56,200
53,500

Page 20

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

6.


Employees

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


2024
2023
£
£

Wages and salaries
5,962,940
5,878,686

Social security costs
600,128
602,731

Cost of defined contribution scheme
161,435
152,788

6,724,503
6,634,205


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


        2024
        2023
            No.
            No.







Directors
6
5



Office and management
47
67



Factory
121
115

174
187


7.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
429,408
378,389

Company contributions to defined contribution pension schemes
12,458
10,574

441,866
388,963


During the year retirement benefits were accruing to 4 directors (2023 - 4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £107,632 (2023 - £117,792).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £3,195 (2023 - £3,534).

Page 21

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

8.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
160,463
466,864

Deferred tax


Origination and reversal of timing differences
(36,690)
(144,893)


Taxation on profit on ordinary activities
123,773
321,971

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 25%). The differences are explained below:

2024
2023
£
£


Profit on ordinary activities before tax
736,121
3,254,019


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 25%)
184,030
813,505

Effects of:


Expenses not deductible for tax purposes
60,301
59,943

Capital allowances for year less than depreciation
124,514
154,555

Pension adjustment
749
2,298

Book profit on chargeable assets
(76,838)
(11,725)

Group relief
(125,308)
(28,377)

Deferred tax
(36,690)
(144,893)

Non-taxable gain on intercompany loan written back
-
(486,378)

Utilisation of tax losses
(2,562)
(7,603)

Change in statutory tax rate in year
-
(29,354)

Exempt dividends received
(4,423)
-

Total tax charge for the year
123,773
321,971


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 22

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

9.


Intangible assets




Goodwill

£



Cost


At 1 January 2024 and 31 December 2024
6,526,931



Amortisation


At 1 January 2024
5,397,076


Charge for the year
225,992



At 31 December 2024

5,623,068



Net book value



At 31 December 2024
903,863



At 31 December 2023
1,129,855



Page 23

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

10.


Tangible fixed assets





Plant and machinery
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£



Cost


At 1 January 2024
11,380,461
132,325
11,958
19,499
11,544,243


Additions
746,000
-
-
-
746,000


Disposals
(973,572)
-
-
-
(973,572)



At 31 December 2024

11,152,889
132,325
11,958
19,499
11,316,671



Depreciation


At 1 January 2024
8,076,071
114,479
10,258
16,574
8,217,382


Charge for the year on owned assets
1,075,762
10,616
1,676
2,925
1,090,979


Charge for the year on financed assets
88,169
-
-
-
88,169


Disposals
(795,922)
-
-
-
(795,922)



At 31 December 2024

8,444,080
125,095
11,934
19,499
8,600,608



Net book value



At 31 December 2024
2,708,809
7,230
24
-
2,716,063



At 31 December 2023
3,304,390
17,846
1,700
2,925
3,326,861

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2024
2023
£
£



Plant and machinery
-
871,108

Page 24

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

11.


Fixed asset investments





Investments in associates

£



Cost 


At 1 January 2024 and 31 December 2024
754,275





12.


Stocks

2024
2023
£
£

Raw materials
622,544
724,414

Finished goods, work in progress and goods for resale
5,098,075
5,741,789

5,720,619
6,466,203



13.


Debtors

2024
2023
£
£

Due within one year

Trade debtors
2,940,703
3,109,079

Amounts owed by group undertakings
5,473,053
5,545,150

Amounts owed by undertakings in which the company has a participating interest
1,245,276
1,590,083

Other debtors
8,243,087
5,369,280

Prepayments and accrued income
75,112
71,011

17,977,231
15,684,603


Included within other debtors is a loan to R. Parda, a director, amounting to £860,545 (2023: £Nil). Amounts repaid during the year totalled £Nil. The loan is non-interest bearing and repayable on demand.


Page 25

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

14.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
1,805,818
1,529,623

Amounts owed to group undertakings
7,303,473
6,946,752

Corporation tax
-
473,420

Other taxation and social security
192,096
186,123

Obligations under finance lease and hire purchase contracts
-
325,637

Other creditors
1,191,726
624,503

Accruals and deferred income
255,013
585,279

10,748,126
10,671,337



15.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Obligations under finance leases and hire purchase contracts
-
361,966



16.


Financial instruments

2024
2023
£
£

Financial assets


Financial assets measured at fair value through profit or loss
1,292,140
1,711,913

Financial assets that are debt instruments measured at amortised cost
17,760,004
15,544,565

19,052,144
17,256,478


Financial liabilities


Financial liabilities measured amortised cost
10,499,830
(10,201,635)


Financial assets measured at fair value through profit or loss comprise cash at bank and in hand totalling £1,292,140 (2023: £1,711,913).


Financial assets measured at amortised cost comprise trade debtors, other debtors, amounts owed by group undertakings and amounts owed by other participating interests totalling £18,144,224 (2023: £15,544,565).


Financial liabilities measured at amortised cost comprise trade creditors, other creditors, amounts owed to group undertakings, amounts owed under hire purchase obligations and accruals totalling £10,499,830 (2023: £10,201,635).

Page 26

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

17.


Deferred taxation




2024
2023


£

£






At beginning of year
(715,706)
(860,599)


Credited to profit or loss
36,690
144,893



At end of year
(679,016)
(715,706)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(679,016)
(725,871)

Tax losses carried forward
-
10,165

(679,016)
(715,706)


18.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



1,463,415 (2023 - 1,463,415) Ordinary shares of £1.00 each
1,463,415
1,463,415
1 (2023 - 1) Ordinary share of £0.78
1
1

1,463,416

1,463,416



19.


Contingent liabilities

At the reporting date, the Company is involved in an ongoing legal matter which may result in a financial penalty from the Health and Safety Executive (HSE). The potential financial exposure is estimated to be in the range of £220,000 to £1,200,000. 
The outcome of the case remains uncertain, and no provision has been recognised in the financial statements. Management has assessed the matter and, having obtained legal advice, considers that while a probable obligation may exist, it is not currently possible to reliably estimate the financial impact due to the complexity and ongoing nature of the proceedings. 
The Company continues to monitor the situation closely and will reassess its position as further information becomes available.

Page 27

 
PENN ELCOM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

20.


Pension commitments

The Company makes payments to a defined contribution pensions scheme. The pension cost charge represents the contributions payable by the group to the fund and amounted to £161,435 (2023: £152,788). The outstanding pension liability at the year end was £40,341 (2023: £37,344).


21.


Commitments under operating leases

At 31 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
640,614
-

Later than 1 year and not later than 5 years
640,614
-

1,281,228
-


22.


Related party transactions

IIncluded within amounts owed by undertakings in which the Company has a participating interest are amounts due from companies over which the Company has significant influence of £1,245,276 (2023: £1,590,083).
During the year sales of £4,063,909 (2023: £4,977,554) were made to companies over which the Company has significant influence.
During the year purchases of £619,191 
(2023: £564,111) were made from companies over which the Company has significant influence.
Included within creditors are amounts due to related parties of £7,303,473
 (2023: £6,946,752). These companies are related by being fellow subsidiaries of the ultimate parent undertaking.
Included within debtors are amounts due from related parties of £5,473,053
 (2023: £5,545,150). These companies are related by being fellow subsidiaries of the ultimate parent undertaking.
During the year sales of £5,034,429
 (2023: £5,100,448) were made to related parties that are fellow subsidiaries of the ultimate parent undertaking.
During the year purchases of £2,891,313
 (2023: £3,352,216) were made from related parties that are fellow subsidiaries of the ultimate parent undertaking.
Sales and purchases between related parties take place under normal market conditions. Outstanding balances with entities are unsecured and no interest is charged.


23.


Ultimate parent undertaking and controlling party

The ultimate parent undertaking and immediate parent company as at 31 December 2024 and 31 December 2023 is Penn Elcom Corporation, a company incorporated in the British Virgin Islands. The ultimate controlling party is R. Willems by virtue of his shareholding in Penn Elcom Corporation.


Page 28