Registered number |
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Registered number: |
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Director's Report | |||||||
The director presents his report and financial statements for the year ended |
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Principal activities | |||||||
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Future developments | |||||||
The director aims to maintain the management policies which have resulted in the company's continued success during the last financial year. Since the year end the business has again relocated and warehousing capacity has been increased to 200,000 square feet which will further improve the overall efficiency of the operation. Results of the first six months of the new year were satisfactory. |
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Dividends | |||||||
The director recommends a final dividend of £ |
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Directors | |||||||
The following person served as a director during the year: | |||||||
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Disclosure of information to auditors |
The director confirms that: | |||||||
● | so far as he is aware, there is no relevant audit information of which the company's auditor is unaware; and | ||||||
● | he 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 company's auditor is aware of that information. |
This report was approved by the board on |
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M A Smithson | |||||||
Director | |||||||
Marks Electrical Limited | |||||||
Statement of Director's Responsibilities | |||||||
The director is responsible for preparing the strategic report, director's report and financial statements in accordance with applicable law and regulations. | |||||||
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (Financial Reporting Standard 102 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 director is required to: | |||||||
● | select suitable accounting policies and then apply them consistently; | ||||||
● | make judgements and 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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. | |||||||
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Strategic Report | |||||||
The director aims to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. The review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties that are faced. | |||||||
The results for the year and the financial position at the year end were considered satisfactory by the director who expects continued growth in the foreseeable future. The key performance indicator is considered to be that which communicates the financial performance and strength of the company as a whole, being turnover. During the year the company's turnover has grown by 24% from £23,112,955 in the year to 31 March 2016 to £28,726,248 in 2017. Earnings before interest, tax,depreciation and amortisation (EBITDA) was £1,363,015 compared to £946,180 in 2016. Operating overheads have increased by 23%, the main increases being in the areas of employee costs, internet expenses and advertising. The director is pleased to report an operating profit before taxation of £1,105,931 which is an increase of some 50% compared to the previous year. In June 2017, following the year end, the busines relocated to larger warehouse premises which further improved the efficiency of the operation, although profitability suffered temporarily during the period of the move. The existing warehouses have been sold realising a small surplus. |
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As for many businesses of this size, the business environment in which the company operates continues to be challenging. The domestic appliance market in the UK is highly competitive and margins continue to be tight. The business faces competition from the major online retailers and is, of course, also subject to consumer spending patterns and consumers' overall level of disposable income within the economy. With these risks and uncertainties in mind, any plans for the future development of the business may be subject to unforseen events outside the company's control. The director feels that the continued investment in IT systems and logistics coupled with the increased warehousing capacity makes the company well positioned to move forward. |
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This report was approved by the board on 21 December 2017 and signed on its behalf. | |||||||
M A Smithson | |||||||
Director | |||||||
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Independent auditors' report | ||
to the member of Marks Electrical Limited | ||
We have audited the financial statements of Marks Electrical Limited for the year ended 31 March 2017 which comprise the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland". | ||
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 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. | ||
Respective responsibilities of directors and auditors | ||
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Scope of the audit of the accounts | ||
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Opinion on the accounts |
In our opinion the accounts: | ||
● | give a true and fair view of the state of the company's affairs as at 31 March 2017 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. |
Opinion on other matters prescribed by the Companies Act 2006 | ||
In our opinion, based on work undertaken in the course of our audit, the information given in the Strategic report and the Director’s report for the financial year for which the financial statements are prepared is consistent with the financial statements, and the Strategic Report and the Director’s 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 any material misstatements in the Strategic Report and the Directors' Report. |
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: | ||
● | 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 accounts 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. |
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(Senior Statutory Auditor) | West Walk Building | |
for and on behalf of | 110 Regent Road | |
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Leicester | |
Chartered Accountants and Statutory Auditors | ||
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LE1 7LT | |
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Income Statement | ||||||||
for the year ended |
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Notes | 2017 | 2016 | ||||||
£ | £ | |||||||
Turnover | 2 |
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Cost of sales | ( |
( |
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Gross profit |
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Distribution costs | ( |
( |
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Administrative expenses | ( |
( |
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Operating profit | 3 |
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Gain on sale of fixed assets | - |
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Gain on revaluation of investment | 79,007 | 58,791 | ||||||
Impairment of value of investment | - | (773,152) | ||||||
Interest receivable | - |
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Interest payable | 7 | ( |
( |
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Profit on ordinary activities before taxation |
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Tax on profit on ordinary activities | 8 | ( |
( |
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Profit for the financial year |
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Registered number: | 04463433 | ||||||
Statement of Financial Position | |||||||
as at |
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Notes | 2017 | 2016 | |||||
£ | £ | ||||||
Fixed assets | |||||||
Tangible assets | 9 |
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Investments | 11 |
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Current assets | |||||||
Stocks | 12 |
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Debtors | 13 |
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Cash at bank and in hand |
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Creditors: amounts falling due within one year | 14 | ( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: amounts falling due after more than one year | 15 | ( |
( |
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Provisions for liabilities | |||||||
Deferred taxation | 19 | ( |
( |
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Net assets |
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Capital and reserves | |||||||
Called up share capital | 20 |
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Other reserves | 21 |
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Profit and loss reserve | 22 |
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Total equity |
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M A Smithson | |||||||
Director | |||||||
Approved by the board on |
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Statement of Changes in Equity | |||||||||
for the year ended |
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Share | Other | Profit | Total | ||||||
capital | reserves | and loss | |||||||
reserve | |||||||||
£ | £ | £ | £ | ||||||
At 1 April 2015 |
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Profit for the financial year |
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Reclassification | 47,033 | (47,033) | |||||||
Other comprehensive income for the financial year | - |
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( |
- | |||||
Total comprehensive income for the financial year | - |
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Dividends | ( |
( |
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At 31 March 2016 |
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At 1 April 2016 |
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Profit for the financial year |
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Reclassification | 63,216 | (63,216) | |||||||
Other comprehensive income for the financial year | - |
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( |
- | |||||
Total comprehensive income for the financial year | - |
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Dividends | ( |
( |
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At 31 March 2017 |
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Statement of Cash Flows | |||||
for the year ended |
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Notes | 2017 | 2016 | |||
£ | £ | ||||
Operating activities | |||||
Operating profit | 1,105,931 | 729,035 | |||
Adjustments for: | |||||
Depreciation | 246,914 | 217,146 | |||
1,352,845 | 946,181 | ||||
Increase in stocks | (650,715) | (488,411) | |||
Increase in debtors | (963,017) | (93,021) | |||
Increase in creditors | 699,428 | 609,974 | |||
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Interest received | - |
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Interest paid | ( |
( |
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Interest element of finance lease payments | ( |
( |
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Corporation tax paid | ( |
( |
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Cash generated by operating activities |
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Investing activities | |||||
Payments to acquire tangible fixed assets | ( |
( |
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Proceeds from sale of tangible fixed assets |
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Cash generated by/(used in) investing activities |
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( |
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Financing activities | |||||
Equity dividends paid | ( |
( |
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Proceeds from new loans |
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Repayment of loans | ( |
( |
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Capital element of finance lease payments | ( |
( |
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Cash (used in)/generated by financing activities | ( |
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Net cash generated | |||||
Cash generated by operating activities |
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Cash generated by/(used in) investing activities |
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( |
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Cash (used in)/generated by financing activities | ( |
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Net cash generated |
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Cash and cash equivalents at 1 April | (1,017,559) | (1,270,902) | |||
Cash and cash equivalents at 31 March | (1,007,973) | (1,017,559) | |||
Cash and cash equivalents comprise: | |||||
Cash at bank |
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Bank overdrafts | 14 | ( |
( |
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(1,007,973) | (1,017,559) | ||||
Marks Electrical Limited | ||||||||
Notes to the Accounts | ||||||||
for the year ended 31 March 2017 | ||||||||
1 | Summary of significant accounting policies | |||||||
Basis of preparation | ||||||||
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 modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below. These policies have been consistently applied to all years presented unless otherwise stated. |
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Turnover | ||||||||
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer which in practice is the delivery of the goods to the buyer. |
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Tangible fixed assets |
Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Leasehold land and buildings | over the lease term | |||||||
Plant and machinery | over 5 to 20 years |
No depreciation is provided on freehold properties. The directors consider that the residual values of these assets are so high that their depreciation is insignificant. | ||||||||
Impairment of fixed assets | ||||||||
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible 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, or the asset's cash generating unit, is estimated and compared to the carrying amount in order to determine the extent of the impairment loss if any. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease. | ||||||||
Investments | ||||||||
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Stocks | ||||||||
Provision is made for damaged, obsolete and slow moving stock where appropriate. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Financial instruments | ||||||||
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Basic financial assets and liabilities are initially measured at transaction price including any transaction costs and are subsequently measured at amortised cost using the effective interest method. Any losses arising from impairment are recognised in the profit and loss account. Investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value which is normally the transaction price excluding transaction costs. Such assets are subsequently measured at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment. |
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Cash and cash equivalents | ||||||||
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. | ||||||||
Judgements and key sources of estimation uncertainty | ||||||||
In the application of the company's accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. Key sources of estimation uncertainty The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows: Useful economic lives of tangible fixed assets The annual depreciation charge for tangible assts is sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates. |
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Taxation | ||||||||
Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. |
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Provisions | ||||||||
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Leased assets | ||||||||
The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions | ||||||||
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2 | Analysis of turnover | 2017 | 2016 | |||||
£ | £ | |||||||
Sale of goods |
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By geographical market: | ||||||||
UK |
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3 | Operating profit | 2017 | 2016 | |||||
£ | £ | |||||||
This is stated after charging: | ||||||||
Depreciation of owned fixed assets |
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Depreciation of assets held under finance leases and hire purchase contracts |
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Operating lease rentals - land and buildings |
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Auditors' remuneration for audit services |
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Key management personnel compensation (including directors' emoluments) |
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Carrying amount of stock sold |
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4 | Exceptional items | 2017 | 2016 | |||||
£ | £ | |||||||
Gain on sale of tangible fixed assets | - | 594,532 | ||||||
Impairment of value of investment | - | (773,152) | ||||||
- | (178,620) | |||||||
The company classifies certain one off charges or credits that have a material impact on the company's financial results as "exceptional items". These are disclosed seperately to provide further understanding of the financial performance of the company. | ||||||||
5 | Director's emoluments | 2017 | 2016 | |||||
£ | £ | |||||||
Emoluments |
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Number of directors to whom retirement benefits accrued: | 2017 | 2016 | ||||||
Number | Number | |||||||
Defined contribution plans |
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6 | Staff costs | 2017 | 2016 | |||||
£ | £ | |||||||
Wages and salaries |
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Social security costs |
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Other pension costs |
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Average number of employees during the year | Number | Number | ||||||
Administration |
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Distribution |
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Marketing |
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Sales |
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7 | Interest payable | 2017 | 2016 | |||||
£ | £ | |||||||
Bank loans and overdrafts |
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Other interest | 43,374 | - | ||||||
Finance charges payable under finance leases and hire purchase contracts |
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8 | Taxation | 2017 | 2016 | |||||
£ | £ | |||||||
Analysis of charge in period | ||||||||
Current tax: | ||||||||
UK corporation tax on profits of the period |
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Adjustments in respect of previous periods |
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- | ||||||
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Deferred tax: | ||||||||
Origination and reversal of timing differences |
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Tax on profit on ordinary activities |
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Factors affecting tax charge for period | ||||||||
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: | ||||||||
2017 | 2016 | |||||||
£ | £ | |||||||
Profit on ordinary activities before tax |
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£ | £ | |||||||
Profit on ordinary activities multiplied by the standard rate of corporation tax |
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|
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Effects of: | ||||||||
Expenses not deductible for tax purposes |
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|
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Investment impairment not deductible for tax purposes | - | 154,630 | ||||||
Profit on disposal of assets not subject to corporation tax | - | (60,000) | ||||||
Adjustments to tax charge in respect of previous periods |
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- | ||||||
Current tax charge for period | 322,286 | 219,015 | ||||||
9 | Tangible fixed assets | |||||||
Land and buildings | Plant and machinery | Total | ||||||
At cost | At cost | |||||||
£ | £ | £ | ||||||
Cost or valuation | ||||||||
At 1 April 2016 |
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Additions |
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Disposals | ( |
( |
( |
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At 31 March 2017 |
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Depreciation | ||||||||
At 1 April 2016 |
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Charge for the year |
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On disposals | ( |
( |
( |
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At 31 March 2017 |
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Carrying amount | ||||||||
At 31 March 2017 |
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At 31 March 2016 |
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2017 | 2016 | |||||||
£ | £ | |||||||
Carrying value of plant and machinery included above held under finance leases and hire purchase contracts |
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10 | Assets pledged as security | |||||||
Freehold property with a carrying amount of £2,441,003 (2016 £2,436,701) is pledged as security for bank borrowings. | ||||||||
11 | Investments | 2017 | 2016 | |||||
£ | £ | |||||||
At 1 April 2016 | 418,260 | 1,132,621 | ||||||
Revaluation impairment | 79,007 | (714,361) | ||||||
At 31 March 2017 |
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12 | Stocks | 2017 | 2016 | |||||
£ | £ | |||||||
Finished goods and goods for resale |
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13 | Debtors | 2017 | 2016 | |||||
£ | £ | |||||||
Trade debtors |
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Other debtors |
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Prepayments and accrued income |
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14 | Creditors: amounts falling due within one year | 2017 | 2016 | |||||
£ | £ | |||||||
Bank overdrafts |
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Bank loans |
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Other Loans | 100,000 | - | ||||||
Obligations under finance lease and hire purchase contracts (secured) |
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Trade creditors |
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Corporation tax |
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Other taxes and social security costs |
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Other creditors |
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Accruals and deferred income |
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15 | Creditors: amounts falling due after one year | 2017 | 2016 | |||||
£ | £ | |||||||
Bank loans |
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Other loans | 350,000 | - | ||||||
Obligations under finance lease and hire purchase contracts (secured) |
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16 | Loans | 2017 | 2016 | |||||
£ | £ | |||||||
Loans not wholly repayable within five years: | ||||||||
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|
|
||||||
Analysis of maturity of debt: | ||||||||
Within one year or on demand |
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|
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Between one and two years |
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Between two and five years |
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After five years |
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17 | Financial instruments | 2017 | 2016 | |||||
£ | £ | |||||||
Carrying amount of financial assets | ||||||||
Debt instruments measured at amortised cost | 1,899,642 | 1,024,017 | ||||||
Equity instruments measured at fair value | 497,267 | 418,260 | ||||||
Carrying amount of financial liabilities | ||||||||
Measured at amortised cost | 5,664,475 | 4,440,086 | ||||||
18 | Obligations under finance leases and hire purchase | 2017 | 2016 | |||||
contracts | £ | £ | ||||||
Amounts payable: | ||||||||
Within one year |
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Within two to five years |
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19 | Deferred taxation | 2017 | 2016 | |||||
£ | £ | |||||||
Revaluation of investments |
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|
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Capital gains rolled over | 23,800 | 23,800 | ||||||
Accelerated capital allowances |
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2017 | 2016 | |||||||
£ | £ | |||||||
At 1 April |
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Charged to the profit and loss account |
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|
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At 31 March |
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20 | Share capital | Nominal | 2017 | 2017 | 2016 | |||
value | Number | £ | £ | |||||
Allotted, called up and fully paid: | ||||||||
|
£ |
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|
||||
Allotted, called up and partly paid: | ||||||||
|
£ |
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|
||||
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|
|||||||
Both classes of share rank equally in all respects. | ||||||||
21 | Other reserves | 2017 | 2016 | |||||
Revaluation reserve | £ | £ | ||||||
At 1 April |
|
|
||||||
Reclassified from profit and loss reserve | 63,216 | 47,033 | ||||||
At 31 March |
|
|
||||||
The revaluation reserve comprises revaluation surpluses after deferred taxation for the current and prior periods. The reserve is not distributable. |
||||||||
22 | Profit and loss reserve | 2017 | 2016 | |||||
£ | £ | |||||||
At 1 April |
|
|
||||||
Profit for the financial year |
|
|
||||||
Reclassified to revaluation reserve | (63,216) | (47,033) | ||||||
Dividends | ( |
( |
||||||
At 31 March |
|
|
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The profit and loss reserve comprises retained profits and losses for the current and prior periods. | ||||||||
23 | Dividends | 2017 | 2016 | |||||
£ | £ | |||||||
Dividends on ordinary shares (note 22) |
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24 | Events after the reporting date | |||||||
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25 | Defined contribution pension scheme | |||||||
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held seperately from those of the company in an indepedently administered fund. The charge to profit and loss in respect of defined contribution schemes was £12,838 (2016 £11,919) | ||||||||
26 | Other financial commitments | |||||||
Total future minimum lease payments under non-cancellable operating leases: | ||||||||
Land and buildings | Land and buildings | Other | Other | |||||
2017 | 2016 | 2017 | 2016 | |||||
£ | £ | £ | £ | |||||
Falling due: | ||||||||
within one year |
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|
- | - | ||||
within two to five years |
|
|
- | - | ||||
|
|
- | - | |||||
27 | Contingent liabilities | |||||||
The company has been advised that it is possible, but not probable, that there will be additional liabilities resulting from this. Accordingly, no provision for any liability has been made in these financial statements. It has been estimated that should HMRC successfully challenge the schemes, the liability would be in the region of £1.5m excluding interest and penalties. The company has made payments totalling £160k relating to these schemes under accelerated payment notices issued by HMRC, which are included as a corporation tax asset in debtors. |
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28 | Director's loan accounts | |||||||
Description and conditions | B/fwd | Paid | Repaid | C/fwd | ||||
£ | £ | £ | £ | |||||
|
( |
|
( |
( |
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(4,058) | 330,416 | (330,000) | (3,642) | |||||
29 | Related party transactions | |||||||
At the year end £394,667 (2016 £Nil) was outstanding from entities controlled by persons with control and £450,000 (2016 £Nil) was due to such entities. Dividends totalling £330,000 (2016 £220,000) were credited to the director during the year. The director has given a personal guarantee in respect of the company's bank overdraft facility. |
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30 | Controlling party | |||||||
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31 | Legal form of entity and country of incorporation | |||||||
Marks Electrical Limited is a limited company incorporated in England. | ||||||||
32 | Principal place of business | |||||||
The address of the company's principal place of business and registered office is: | ||||||||
4 Boston Road | ||||||||
Beaumont Leys | ||||||||
Leicester | ||||||||
Leicestershire | ||||||||
LE4 1AQ |