Linecross Limited - Limited company accounts 18.2

REGISTERED NUMBER: 02523619 (England and Wales)

LINECROSS LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2020

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

D T Austin BA, ACA

S D Fry C.Eng FIMechE

L Fry

J S Austin

SECRETARY:

D T Austin BA, ACA

REGISTERED OFFICE:

Station Road

South Luffenham

Oakham

Rutland

LE15 8NG

REGISTERED NUMBER:

02523619 (England and Wales)

AUDITORS:

Duncan & Toplis Limited, Statutory Auditor

14 All Saints Street

Stamford

Lincolnshire

PE9 2PA

The directors present their strategic report for the year ended 31 January 2020.

The directors aim to present a balanced and comprehensive review of the development and performance of the

company during the year and its position at the year end. The review is consistent with the non-complex nature and

size of the company and the risks and uncertainties faced.

REVIEW OF BUSINESS

The headline results for the year and the three proceeding years are as follows:-

Year to 31Jan'20 £

Year to 31Jan'19 £

Year to 31Jan'18 £

Year to 31Jan'17 £

Turnover

26,275

27,560

28,004

23,893

Gross Profit

3,663

4,134

4,145

3,868

Gross Profit %

14.0%

15.0%

14.8%

16.2%

EBITDA

2,714

3,193

3,068

2,980

Profit for the year after tax

1,315

1,754

1,646

1,675

Against the back drop of the uncertainties and disruption created by the on-going failure during the year for an

orderly resolution to Brexit, the directors are again pleased with the trading performance of the company.

Turnover declined by 4.7% as a result of some OEMs delaying new product introductions which effected the

company's engineering revenues. However, turnover from component supply grew by 4.1% as two new programmes

commenced during the second half of the year. The changing mix in turnover resulted in the gross profit % declining

by 1% to 14%.

The net assets of the company at the year end amounted to £8.9m. (2019: £8.3m). The trade debtors balance of

£6.4m (2019: £4.5m) was artificially high as a result of £1.3m of tooling work completed throughout the year being

approved and invoiced in January 2020. These invoices were paid by the customer on 28th February 2020.

KEY PERFORMANCE INDICATORS

The directors monitor the performance of the company through the use of a suite of key performance indicators (KPIs)

which are aligned to the strategy of the company. These KPIs encompass all business disciplines and include such

items as sales pipeline growth, EBITDA, productivity and margins, cash generation and health and safety and

environmental performance. The EBITDA attainment of £2.7m was directly affected by the difficulties caused by the

protracted Brexit and UK political uncertainties. The directors are pleased with the attainments achieved in the other

KPIs during the year.

FUTURE DEVELOPMENTS

With a growing order book of lengthy nominated contracts and significant new opportunities for 2020 and beyond,

the company contracted capital expenditure of £1.4m and secured a further 20,000 sq ft manufacturing facility in the

final quarter of the year.

These fully invested facilities together with differentiating technologies through full service supply and the sound

financials of the company means the Board remain confident regarding the outlook and potential for the company in

the coming years.

In response to the on-going uncertainties and potential impacts to business created by the current Brexit position, the

directors have implemented proactive strategies aim to mitigate risk for the company and its stakeholders.

The full impact of COVID-19 remains uncertain and continues to develop on a daily basis. The directors are monitoring

the exposure to the company's business and employees and is referring to the government and professional advice

published to help ensure the safety of our employees and to minimise the impact to the company. The company has

significant financial headroom and the directors have undertaken scenario planning and have contingency strategies

ready in order to manage the risk to the business.

PRINCIPAL RISKS AND UNCERTAINTIES

The main risks arising from the company's activities are liquidity risk, currency risk, interest rate risk and credit risk.

The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and

to invest cash assets safely and profitably. Short term flexibility is achieved by overdraft facilities.

Credit risk

The company seeks to manage its credit risk by dealing with established customers or otherwise checking the

credit-worthiness of new customers, establishing clear contractual relationships with those customers and by

identifying and addressing any credit issues arising in a timely manner.

Currency risk

The company is exposed to transaction foreign exchange risk. The directors seek, whenever possible, to use sterling as

the currency denomination when transacting with foreign suppliers. If considered necessary, transaction exposures,

including those associated with forecast transactions, are hedged when known, principally using forward currency

contracts. Whilst the aim is to achieve an economic hedge the company does not adopt an accounting policy of hedge

accounting for these financial statements.

Interest rate risk

The company finances its operations through a combination of bank borrowings and finance leases. The company's

exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and variable rate facilities.

ON BEHALF OF THE BOARD:

D T Austin BA, ACA - Secretary

9 April 2020

The directors present their report with the financial statements of the company for the year ended 31 January 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the manufacture of technical plastic

thermoformings, injection mouldings and polyurethane components together with associated tooling and engineering

services.

DIVIDENDS

Interim dividends of 0.280, 0.280 and 0.395 pence per share were declared and paid on 18 April 2019, 21 August 2019

and 4 December 2019 respectively.

The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 January 2020 will be £716,250.

RESEARCH AND DEVELOPMENT

It is the board's intention that the company shall remain in the forefront of innovation in its products and markets

through a continuing programme of research and development in collaboration with its strategic customers and

suppliers.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 February 2019 to the date of this

report.

D T Austin BA, ACA

S D Fry C.Eng FIMechE

L Fry

J S Austin

EMPLOYEE CONSULTATION

It is the policy of the company to keep its employees fully informed on all matters relevant to them through regular

information and consultation meetings. By doing so, employees' views are considered in decisions that are likely to

affect their interests and employees' participation in the company's performance is encouraged.

DISABLED EMPLOYEES

Full and fair consideration is always given to applications for employment by disabled persons. In the event of a

member of staff becoming disabled, every effort is made to ensure their employment with the company continues

and appropriate adjustments and training are provided where necessary. It is the policy of the company that the

training, career development and promotion of disabled persons should, as far as possible, be identical to that of

other employees.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 of the profit or loss of the company for that period. In preparing these financial

statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible

for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of

fraud and other irregularities.

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 company's auditors are unaware, and each director has taken all the steps that he or she ought

to have taken as a director in order to make himself or herself aware of any relevant audit information and to

establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

D T Austin BA, ACA - Secretary

9 April 2020

Opinion

We have audited the financial statements of Linecross Limited (the 'company') for the year ended 31 January 2020

which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of

Changes in Equity and 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 the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 January 2020 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 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the

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 there is a material

misstatement in the financial statements or a material misstatement of the other information. If, based on the work

we have performed, we conclude that there is a material misstatement of this other information, we are required to

report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors 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 Directors 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 Report of the Directors.

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 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 Statement of Directors' Responsibilities set out on page five, 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 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.

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.

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.

Mark Hindmarch BSc ACA (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Limited, Statutory Auditor

14 All Saints Street

Stamford

Lincolnshire

PE9 2PA

15 April 2020

TURNOVER

3

26,275,173

27,559,832

Cost of sales

(22,611,700

)

(23,425,382

)

GROSS PROFIT

3,663,473

4,134,450

Distribution costs

(741,960

)

(763,144

)

Administrative expenses

(1,069,600

)

(1,002,119

)

OPERATING PROFIT

5

1,851,913

2,369,187

Interest payable and similar expenses

6

(190,926

)

(258,657

)

PROFIT BEFORE TAXATION

1,660,987

2,110,530

Tax on profit

7

(325,604

)

(356,904

)

PROFIT FOR THE FINANCIAL YEAR

1,335,383

1,753,626

FIXED ASSETS

Tangible assets

9

7,216,439

7,498,054

Investments

10

20,000

20,000

7,236,439

7,518,054

CURRENT ASSETS

Stocks

11

3,249,367

3,024,028

Debtors

12

8,273,085

7,778,188

Cash at bank

8,861

8,537

11,531,313

10,810,753

CREDITORS

Amounts falling due within one year

13

(6,357,931

)

(5,430,903

)

NET CURRENT ASSETS

5,173,382

5,379,850

TOTAL ASSETS LESS CURRENT LIABILITIES

12,409,821

12,897,904

CREDITORS

Amounts falling due after more than one year

14

(2,473,805

)

(3,647,978

)

PROVISIONS FOR LIABILITIES

18

(315,703

)

(248,746

)

NET ASSETS

9,620,313

9,001,180

CAPITAL AND RESERVES

Called up share capital

19

750,000

750,000

Retained earnings

8,870,313

8,251,180

SHAREHOLDERS' FUNDS

9,620,313

9,001,180

The financial statements were approved and authorised for issue by the Board of Directors on 9 April 2020 and were signed on its behalf by:

D T Austin BA, ACA - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 February 2018

750,000

7,213,804

7,963,804

Changes in equity

Dividends

-

(716,250

)

(716,250

)

Total comprehensive income

-

1,753,626

1,753,626

Balance at 31 January 2019

750,000

8,251,180

9,001,180

Changes in equity

Dividends

-

(716,250

)

(716,250

)

Total comprehensive income

-

1,335,383

1,335,383

Balance at 31 January 2020

750,000

8,870,313

9,620,313

1.	STATUTORY INFORMATION

Linecross 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 Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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. The financial statements have been prepared under the historical cost convention.

The significant accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all years presented unless otherwise stated.

Going concern

The full impact of the current COVID-19 pandemic remains uncertain and continues to develop on a daily basis.

The directors are monitoring the exposure to the company's business and employees and are referring to the

government and professional advice published to help ensure the safety of its employees and to minimise the

impact to the company. In the short term, the industry is experiencing temporary production shut downs to

mitigate supply and demand shortages. In the longer term the directors expect the industry to fully recover

and production to return to normal levels.

The company has significant financial headroom and the directors have undertaken scenario planning and

have contingency strategies ready in order to manage the risk to the business, utilising government schemes as

necessary. Therefore having reviewed the budgets and contingency plans the directors have concluded that

there is no material uncertainty to the going concern status of the company.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of

Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c).

The company is a subsidiary of Linecross Group Limited. Consolidated financial statements of Linecross Group

Limited can be obtained from:

Companies House

Crown Way

Cardiff

CF14 3UZ

Preparation of consolidated financial statements

The financial statements contain information about Linecross Limited as an individual company and do not

contain consolidated financial information as the parent of a group. The company is exempt under Section

400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and

its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its

parent, Linecross Group Limited, Station Road, South Luffenham, Oakham, Rutland, LE15 8NG, United

Kingdom.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, management is required to make judgements,

estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from

other sources. The estimates and underlying 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 if the revision affects only that period,

or in the period of the revision and future periods if the revision affects both current and future periods.

The items in the financial statements subject to judgements, estimates and assumptions include:

i) Long term tooling projects

The directors estimate the stage of completion of long term tooling projects included in work in progress based

on their knowledge of previous similar projects and by comparison to the detailed tooling budgets prepared.

ii) Overhead absorption rates

The overhead absorption rate applied to work in progress and finished goods is based on the labour and

allowable direct overhead costs for the last three months. The directors consider that three months is

appropriate as this is approximately the length of time taken for stock items to be complete and sold.

Turnover

Turnover is the revenue arising from the sales of goods and services. It is stated at the fair value of the

consideration receivable, net of value added tax, rebates and discounts.

Revenue from the sale of goods is recognised when the significant risks and benefits of ownership of the

product have transferred to the buyer, which may be upon shipment, completion of the product or the

product being ready for delivery, based on specific contract terms.

Tangible fixed assets

Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost less estimated

residual value of each asset evenly over its expected useful life. Plant, machinery and equipment is written off

over 3 to 10 years and vehicles over 3 to 4 years. Where the depreciation charge is material, buildings are

depreciated evenly over their expected useful life of 50 or 20 years.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks and work in progress

Stocks and work in progress are stated at the lower of cost and fair value less costs to complete and sell after

making due allowance for slow moving and obsolete items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in

bringing stocks to their present location and condition.

Work in progress is valued on the basis of direct cost plus attributable overheads based on normal level of

activity.

The directors have considered the accounting of certain items of work in progress relating to long term

contracts, these items have been recategorised as amounts recoverable on contracts within debtors. This

adjustment has no impact on profit.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different

from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and

laws that have been enacted or substantively enacted by the year end and that are expected to apply to the

reversal of the timing difference.

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.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate

of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the

operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial

position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those

held under finance leased are depreciated over their estimated useful lives or the lease term, whichever is the

shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital

element of the future payments is treated as a liability.

Pension costs and other post-retirement benefits

The company contributes to employees' personal pension plans, which are money purchase schemes.

Contributions are charged to the income statement as incurred.

Financial instruments

The company has adopted the Sections 11 and 12 of FRS 102 in respect of financial instruments.

Basic financial assets, including trade and other debtors and cash and bank balances are initially recognised at

transaction price, unless the arrangement constitutes a financing transaction, where the transaction is

measured at the present value of the future receipts discounted at a market rate of interest.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective

evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying

amount and the present value of the estimated cash flows discounted at the asset's original effective interest

rate. The impairment loss is recognised in profit or loss.

Basic financial liabilities, including trade and other creditors, bank loans, loans from fellow group companies

and preference shares that are classified as debt, are initially recognised at transaction price, unless the

arrangement constitutes a financing transaction, where the debt instrument is measured at the present value

of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of

business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year

or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at

transaction price and subsequently measured at amortised cost using the effective interest method.

Amounts recoverable on contracts

Profit on contracting activities is taken as work progresses. The profit included is calculated on a reasonable

basis to reflect the value of work carried out by the year end and is stated at the lower of the margin earned to

date and that forecast at completion, taking account of agreed claims.

Provision is made for any foreseeable losses where appropriate.

The amount by which recorded turnover is in excess of payments on account is disclosed as amounts

recoverable on contracts.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2020

2019

£

£

United Kingdom

25,167,655

26,598,592

Europe

806,001

689,436

Rest of the world

301,517

271,804

26,275,173

27,559,832

4.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

6,453,577

6,375,623

Social security costs

656,888

634,056

Other pension costs

145,399

108,853

7,255,864

7,118,532

The average number of employees during the year was as follows:

2020

2019

Number of production staff

199

205

Number of sales and administrative staff

54

48

253

253

2020

2019

£

£

Directors' remuneration

397,291

385,675

Information regarding the highest paid director is as follows:

2020

2019

£

£

Emoluments etc

167,377

161,673

5.	OPERATING PROFIT

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

2020

2019

£

£

Depreciation - owned assets

592,241

544,256

Depreciation - assets on hire purchase contracts

277,757

279,818

Profit on disposal of fixed assets

(7,642

)

(32,089

)

Auditors' remuneration

20,400

20,000

Foreign exchange differences

(22,518

)

(8,294

)

Operating leases

55,514

56,721

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

£

£

Interest on loans

190,926

258,657

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2020

2019

£

£

Current tax:

UK corporation tax

261,280

356,478

Adjustment re previous year

(2,633

)

(35,981

)

Total current tax

258,647

320,497

Deferred tax

66,957

36,407

Tax on profit

325,604

356,904

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

2020

2019

£

£

Profit before tax

1,660,987

2,110,530

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

315,588

401,001

Effects of:

Adjustments to tax charge in respect of previous periods

(2,633

)

(35,981

)

Expenses not deductible for tax purposes

2,165

466

Capital allowances for period in excess of depreciation

30,634

22,730

Research and development enhanced deduction

(20,150

)

(31,312

)

Total tax charge

325,604

356,904

8.

DIVIDENDS

2020

2019

£

£

Ordinary shares of £1 each

Interim

716,250

716,250