Rapid Electrical Distributors Holding Li - Limited company accounts 23.2

REGISTERED NUMBER: 13196044 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

RAPID ELECTRICAL DISTRIBUTORS HOLDINGS

LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

Mr NJ Edwell

QAGDORM6 Ltd

REGISTERED OFFICE:

St Ann's Quay

118 Quayside

Newcastle Upon Tyne

United Kingdom

NE1 3BD

REGISTERED NUMBER:

13196044 (England and Wales)

SENIOR STATUTORY AUDITOR:

Tara Aldwin ACA

AUDITORS:

FKCA Limited

Statutory Auditor

260 - 270 Butterfield

Great Marlings

Luton

Bedfordshire

LU2 8DL

The directors present their strategic report of the company and the group for the year ended 31 December 2022.

REVIEW OF BUSINESS

The director is pleased to report a significant improvement in turnover and profit as the industry and economy recovered from the adverse impacts of Coronavirus pandemic.

Despite the continued increases in the cost of raw materials and with competitive pricing within the electrical wholesale market, the gross profit for the year increased to £3.39m (2021 £2.04m).

Despite the underlying uncertainty in the wider economy, the company was able to successfully follow its business plan and forecast, exceeding its turnover and profit targets.

The key financial highlights are as follows:

31 December 2022

31 December 2021

Turnover

£18,624,625

£13,469,14l

Gross Profit

£3,386,080

£2,044,598

Gross Profit %

18.1%

15.2%

Loss before tax

£138,127

£466,522

Net Assets (Liabilities)

(£170,236)

£44,859

The company has performed strongly during the year, and the directors are pleased with its performance and position. The forecast for 2023 is one of further recovery with company continuing to grow and explore viable commercial projects.

The directors have a key focus on maintaining and improving liquidity which will enable the company to withstand any adverse effects of the current economic uncertainty.

PRINCIPAL RISKS AND UNCERTAINTIES

The Senior Management team led by the Managing Director constantly review any associated risks.

The principal risks identified are as follows:

Staffing

The company's staff are key to the services that it can provide and in common with many industries, the company is facing challenges in the labour market, with competition both within the industry and from other industries.

Liquidity

The Company makes use of an invoice finance discounting facility in order to mitigate short term liquidity risk. The Directors continually monitor cash flow forecasts in order manage this risk over the short to medium term.

Credit Risk

The Company is exposed to the credit risk of its customers. The Directors ensure that all key customers have regular credit checks undertaken by working closely with the credit insurance partner. The Company has also employed a credit controller to ensure all invoices are paid on a timely basis and queries are acted upon quickly.

Economic Outlook

There has been increased economic uncertainty as the World recovers from the global Coronavirus pandemic. In addition, the war in Ukraine has caused issues with the supply of certain products and in turn has caused global inflationary pressures which have created a cost of living crisis in UK and Europe.

Price Risk

The market in which the Company operates is highly competitive. There are on-going pressures from suppliers implementing price increases which impact profit margins. To mitigate this risk, the Company employs a specialist purchasing controller who is constantly assessing the market to obtain the best prices possible.

The Company ensures it competes effectively by maintaining relationships with customers and by delivering a high level of customer service.

The company looks forward to FY2023 and beyond with confidence.

ON BEHALF OF THE BOARD:

Mr NJ Edwell - Director

29 September 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of wholesale electrical distributors.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

Mr NJ Edwell

QAGDORM6 Ltd

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, FKCA Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr NJ Edwell - Director

29 September 2023

Qualified Opinion

We have audited the financial statements of Rapid Electrical Distributors Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report the financial statements:

- give a true and fair view of the state of the company's affairs as at 31 December 2022 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 qualified 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 group 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. In the previous period, the auditor was not appointed auditor of the company until after 31 December 2021 and thus did not observe the counting of physical inventories at the end of the year. The previous auditor was unable to satisfy themselves by alternative means concerning the inventory quantities held at 31 December 2021, which at the balance sheet totalled £1,463,312, by using other audit procedures. Consequently we are unable to determine whether any adjustments to this amount was necessary on the current year totals or the strategic report.

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 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £1,463,313 held at 31 December 2021. We have concluded that where the other information refers to the inventory balances or related balances such as costs of sales, it may be materially misstated for the same reason

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

- the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, 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 Report of the Director.

In respect solely of the limitation on our work relating to stock, described above:

- we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

- we were unable to determine whether adequate accounting records have been kept

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

- 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 director's remuneration specified by law are not made.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

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

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

-

enquiry of management and those charged with governance around actual and potential litigation and claims;

-

enquiry of entity staff and the board of directors to identify any instances of non-compliance with laws and regulations;

-

reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

-

adjustments for appropriateness and evaluating the business rationale of significant transactions outside the normal course of business; and

-

auditing the risk of management override of controls, including through testing journal entries and other means.

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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.

Tara Aldwin ACA (Senior Statutory Auditor)

for and on behalf of FKCA Limited

Statutory Auditor

260 - 270 Butterfield

Great Marlings

Luton

Bedfordshire

LU2 8DL

29 September 2023

TURNOVER

5

18,624,625

13,469,141

Cost of sales

15,238,545

11,424,543

GROSS PROFIT

3,386,080

2,044,598

Administrative expenses

3,367,297

2,426,544

18,783

(381,946

)

Other operating income

28,702

-

OPERATING PROFIT/(LOSS)

7

47,485

(381,946

)

Interest payable and similar expenses

8

185,612

84,576

LOSS BEFORE TAXATION

(138,127

)

(466,522

)

Tax on loss

9

76,968

58,664

LOSS FOR THE FINANCIAL YEAR

(215,095

)

(525,186

)

Loss attributable to:

Owners of the parent

(215,095

)

(525,186

)

LOSS FOR THE YEAR

(215,095

)

(525,186

)

OTHER COMPREHENSIVE INCOME

-

569,945

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

569,945

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(215,095

)

44,759

Total comprehensive income attributable to:

Owners of the parent

(215,095

)

44,759

FIXED ASSETS

Intangible assets

12

2,986,408

3,352,096

Tangible assets

13

714,773

735,529

Investments

14

-

-

3,701,181

4,087,625

CURRENT ASSETS

Stocks

15

1,460,893

1,463,312

Debtors

16

5,395,775

4,082,552

Cash at bank

892,097

843,378

7,748,765

6,389,242

CREDITORS

Amounts falling due within one year

17

8,181,835

6,710,343

NET CURRENT LIABILITIES

(433,070

)

(321,101

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,268,111

3,766,524

CREDITORS

Amounts falling due after more than one year

18

(3,402,604

)

(3,696,983

)

PROVISIONS FOR LIABILITIES

22

(35,743

)

(24,682

)

NET (LIABILITIES)/ASSETS

(170,236

)

44,859

CAPITAL AND RESERVES

Called up share capital

23

100

100

Other reserves

24

569,945

569,945

Retained earnings

24

(740,281

)

(525,186

)

SHAREHOLDERS' FUNDS

(170,236

)

44,859

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

Mr NJ Edwell - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

4,250,000

4,250,000

4,250,000

4,250,000

CURRENT ASSETS

Debtors

16

100

100

CREDITORS

Amounts falling due within one year

17

809,524

809,524

NET CURRENT LIABILITIES

(809,424

)

(809,424

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,440,576

3,440,576

CREDITORS

Amounts falling due after more than one year

18

2,870,531

2,870,531

NET ASSETS

570,045

570,045

CAPITAL AND RESERVES

Called up share capital

23

100

100

Other reserves

569,945

569,945

SHAREHOLDERS' FUNDS

570,045

570,045

Company's profit for the financial year

-

-

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

Mr NJ Edwell - Director

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Changes in equity

Issue of share capital

100

-

-

100

Total comprehensive income

-

(525,186

)

569,945

44,759

Balance at 31 December 2021

100

(525,186

)

569,945

44,859

Changes in equity

Total comprehensive income

-

(215,095

)

-

(215,095

)

Balance at 31 December 2022

100

(740,281

)

569,945

(170,236

)

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Changes in equity

Issue of share capital

100

-

-

100

Total comprehensive income

-

-

569,945

569,945

Balance at 31 December 2021

100

-

569,945

570,045

Changes in equity

Balance at 31 December 2022

100

-

569,945

570,045

Cash flows from operating activities

Cash generated from operations

1

682,913

1,183,743

Interest paid

(185,610

)

(84,577

)

Tax paid

(36,465

)

(65,345

)

Net cash from operating activities

460,838

1,033,821

Cash flows from investing activities

Purchase of intangible fixed assets

-

166,747

Purchase of tangible fixed assets

(64,464

)

(64,880

)

Net cash from investing activities

(64,464

)

101,867

Cash flows from financing activities

Loan repayments in year

(347,655

)

(227,310

)

Amount withdrawn by directors

-

(65,000

)

Net cash from financing activities

(347,655

)

(292,310

)

Increase in cash and cash equivalents

48,719

843,378

Cash and cash equivalents at beginning of year

2

843,378

-

Cash and cash equivalents at end of year

2

892,097

843,378

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

11.2.21

Year Ended

to

31.12.22

31.12.21

as restated

£

£

Loss before taxation

(138,127

)

(466,522

)

Depreciation charges

453,773

369,122

Finance costs

185,612

84,576

501,258

(12,824

)

Decrease/(increase) in stocks

2,419

(49,384

)

(Increase)/decrease in trade and other debtors

(1,315,210

)

344,480

Increase in trade and other creditors

1,494,446

901,471

Cash generated from operations

682,913

1,183,743

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2022

31.12.22

1.1.22

£

£

Cash and cash equivalents

892,097

843,378

Period ended 31 December 2021

31.12.21

11.2.21

as restated

£

£

Cash and cash equivalents

843,378

-

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.22

Cash flow

At 31.12.22

£

£

£

Net cash

Cash at bank

843,378

48,719

892,097

843,378

48,719

892,097

Debt

Debts falling due within 1 year

(344,721

)

53,276

(291,445

)

Debts falling due after 1 year

(826,452

)

294,379

(532,073

)

(1,171,173

)

347,655

(823,518

)

Total

(327,795

)

396,374

68,579

1.	STATUTORY INFORMATION

Rapid Electrical Distributors Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

After reviewing the group forecasts and projections, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for at least 12 months following the signing of the accounts.

Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Rapid Electrical Distributors Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group's share of its interest in joint ventures and associates.

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies in line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred,

Subsidiaries are consolidated in the group's financial statements from the date that control commences until the date control ceases.

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 delivery 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.

Goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of carrying amount of each assets in the unit.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold land and buildings

- 2% to 10% straight line

Plant and machinery

- 20% straight line and 25% reducing balance

Motor vehicles

- 20% on reducing balance

Computer equipment

- 25% straight line and 25% reducing balance

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.