Stairways (Holdings) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02851575 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

STAIRWAYS (HOLDINGS) LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Statement of Income and Retained Earnings

8

Consolidated Statement of Financial Position

9

Company Statement of Financial Position

10

Consolidated Statement of Cash Flows

11

Notes to the Consolidated Statement of Cash Flows

12

Notes to the Consolidated Financial Statements

14

DIRECTORS:

N C Stevens

K J Wood

REGISTERED OFFICE:

Southam Drive

Southam

Warwickshire

CV47 0FA

REGISTERED NUMBER:

02851575 (England and Wales)

AUDITORS:

TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

The directors present their strategic report of the company and the group for the year ended 31 December 2021.

REVIEW OF BUSINESS

The Directors are satisfied with the performance of the group. The year was challenging again as the COVID-19 pandemic continued, which meant the group had to adhere to social distancing measures so that working conditions could be undertaken safely and effectively while the restrictions were in place. These conditions were maintained to ensure the safety of our employees, and with the ability to furlough employees as needed or when an employee needed to shelter we were able to continue working effectively throughout the year.

Turnover has stabilised compared to 2020 and the Directors are pleased with the way the financial year ended and the turnover that was achieved. The order book is healthy and the company is now looking to 2022 to be able to return to the levels achieved in 2019.

As important as ever, the group remains a strong advocator of KPI's which are deployed to monitor and manage the daily operations, as well as provide the business with clear direction and benchmarks when assessing annual performance, growth, profitability, debts and returns on investments. Non-financial performance indicators are percentage measures for customer growth, movements in customer accounts and daily spend.

The groups KPI's during the year are:

Increase in turnover by 10.28% (2020 - decrease 21.48%)

Increase in gross profit by 38.94% (2020 - decrease 28.81%)

Decrease in profit before taxation for the financial year 2.38% (2020 - 17.56%)

The Directors are optimistic about 2022 and are looking to continue the year as it has started, with the aim of bringing profitability back to the level of 2019.

PRINCIPAL RISKS AND UNCERTAINTIES

The principle risks identified by the directors are credit risk and liquidity risk. The company manages these risks by trading with creditworthy customers and financing its operations through retained profits.

The current economic climate and the impact of the coronavirus COVID-19 outbreak create uncertainty that could potentially impact on the level of demand and global raw materials costs. Whilst this presents a risk to the business the directors will continue to closely monitor the position as the implications become more known in order to ensure that the group will continue to trade successfully.

ON BEHALF OF THE BOARD:

K J Wood - Director

18 August 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2021.

PRINCIPAL ACTIVITIES

The principal activity of the group continued to be that of the manufacture of timber and joinery products for the construction industry.

The principal activities of the company continued to be that of a holding company and property management company.

DIVIDENDS

Details of dividends paid in the year are disclosed in note 11.

RESEARCH AND DEVELOPMENT

The group carries our research and development with the aim of modernising and stream lining the sales systems and processes for the bespoke products manufactured.

FUTURE DEVELOPMENTS

The group continues to develop its strategy of researching the availability and feasibility of new building materials and the development of the manufacturing processes with the aim to improve quality and subsequently profitability.

The directors remain confident that the current strategy implemented to increase sales and improve profitability is having a positive effect and are committed to invest into its continued success.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

N C Stevens

K J Wood

FINANCIAL INSTRUMENTS

The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

Credit risk arises from customers failing to meet their obligation under contracts of sale to pay. In order to minimise this risk, deferred terms are only granted to those customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. The company also maintains strong relationships with its key customers through its sales team.

Creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

GOING CONCERN

The directors have made an assessment on the company's ability to continue in operational existence for the foreseeable future. The directors are not aware of any material uncertainties that may effect the company's ability to trade in the future. Thus the directors believe the going concern basis of accounting to be appropriate and have drawn up the financial statements based on its adoption. Since the year end, there has been some disruption to the business activities as a result of COVID-19, but these do not impact the financial statements for the current year.

STRATEGIC REPORT

In accordance with section 414C(1) of the Companies Act 2006 (Strategic Report and Directors Report) Regulations 2013, the company has prepared a Strategic Report, which includes information that would have previously been included in the Directors' Report.

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 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 group's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

K J Wood - Director

18 August 2022

Opinion

We have audited the financial statements of Stairways (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 group's and of the parent company affairs as at 31 December 2021 and of the group's 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 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.

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.

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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 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:

We have considered how irregularities, including fraud, can be detected in this Business and how they may occur. This is not a cash intensive business and the Group holds no high value stock. However, we are aware there are always opportunities to manipulate the accounts, in particular by increasing or decreasing profits and window dressing by making the balance sheet look stronger than it may in reality be.

To mitigate these risks we have reviewed all Journals made during the year ensuring all are authorised and approved at the appropriate level. We have also reviewed any transactions outside of the business, and we have carried out a detailed analytical review of income and expenses highlighting any variances and obtaining reasons from Senior Management as to the reasons why. Materiality has been set at a level we feel more comfortable to include a greater range of testing to enable us to detect irregularities.

In respect of non- compliance with laws and regulations we have carried out the following enquiries:

Review minutes of meetings of those charged with governance.

Enquiry of management, those charged with governance and the Companies solicitors around actual and potential litigation and claims.

Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

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.

BENJAMIN R REYNOLDS (Senior Statutory Auditor)

for and on behalf of TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

23 August 2022

TURNOVER

3

11,434,561

10,370,629

Cost of sales

7,426,642

7,484,267

GROSS PROFIT

4,007,919

2,886,362

Administrative expenses

3,066,388

2,721,435

941,531

164,927

Other operating income

4

488,126

1,377,190

OPERATING PROFIT

6

1,429,657

1,542,117

Interest receivable and similar income

7

75,462

9,628

1,505,119

1,551,745

Interest payable and similar expenses

8

20,660

31,139

PROFIT BEFORE TAXATION

1,484,459

1,520,606

Tax on profit

9

194,351

196,427

PROFIT FOR THE FINANCIAL YEAR

1,290,108

1,324,179

Retained earnings at beginning of year

10,296,708

9,316,529

Dividends

11

(418,000

)

(344,000

)

RETAINED EARNINGS FOR THE GROUP AT END OF YEAR

11,168,816

10,296,708

Profit attributable to:

Owners of the parent

1,290,108

1,324,179

FIXED ASSETS

Intangible assets

12

789,485

885,666

Tangible assets

13

2,614,460

2,489,724

Investments

14

2

2

Investment property

15

3,353,943

3,353,943

6,757,890

6,729,335

CURRENT ASSETS

Stocks

16

1,074,310

984,899

Debtors

17

1,450,102

1,373,405

Investments

18

1,074,370

753,752

Cash at bank and in hand

3,717,887

4,113,430

7,316,669

7,225,486

CREDITORS

Amounts falling due within one year

19

1,744,587

2,433,016

NET CURRENT ASSETS

5,572,082

4,792,470

TOTAL ASSETS LESS CURRENT LIABILITIES

12,329,972

11,521,805

CREDITORS

Amounts falling due after more than one year

20

(848,954

)

(950,489

)

PROVISIONS FOR LIABILITIES

25

(139,812

)

(102,218

)

NET ASSETS

11,341,206

10,469,098

CAPITAL AND RESERVES

Called up and paid share capital

26

1,000

1,000

Revaluation reserve

27

171,390

171,390

Retained earnings

27

11,168,816

10,296,708

SHAREHOLDERS' FUNDS

11,341,206

10,469,098

The financial statements were approved by the Board of Directors and authorised for issue on 18 August 2022 and were signed on its behalf by:

N C Stevens - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

2,613,202

2,489,724

Investments

14

3,076,704

3,016,704

Investment property

15

3,353,943

438,943

9,043,849

5,945,371

CURRENT ASSETS

Debtors

17

361,956

1,040,800

Cash at bank

94,461

430,964

456,417

1,471,764

CREDITORS

Amounts falling due within one year

19

199,806

2,493,441

NET CURRENT ASSETS/(LIABILITIES)

256,611

(1,021,677

)

TOTAL ASSETS LESS CURRENT LIABILITIES

9,300,460

4,923,694

CREDITORS

Amounts falling due after more than one year

20

(848,954

)

(950,489

)

PROVISIONS FOR LIABILITIES

25

(239,812

)

(102,218

)

NET ASSETS

8,211,694

3,870,987

CAPITAL AND RESERVES

Called up and paid share capital

26

1,000

1,000

Revaluation reserve

27

171,390

171,390

Retained earnings

27

8,039,304

3,698,597

SHAREHOLDERS' FUNDS

8,211,694

3,870,987

Company's profit for the financial year

4,758,707

665,016

The financial statements were approved by the Board of Directors and authorised for issue on 18 August 2022 and were signed on its behalf by:

N C Stevens - Director

Cash flows from operating activities

Cash generated from operations

1

964,037

3,087,585

Interest paid

(19,511

)

(31,139

)

Tax paid

(305,396

)

(200,824

)

Net cash from operating activities

639,130

2,855,622

Cash flows from investing activities

Purchase of tangible fixed assets

(416,419

)

(241,084

)

Sale of tangible fixed assets

390

1,650

Net cash outflow on acquisition

-

(2,677,596

)

Interest received

4,844

5,876

Investments made

(250,000

)

-

Net cash from investing activities

(661,185

)

(2,911,154

)

Cash flows from financing activities

New loans in year

-

1,003,000

Loan repayments in year

(87,026

)

(1,099,553

)

Government grants received

131,538

542,073

Equity dividends paid

(418,000

)

(344,000

)

Net cash from financing activities

(373,488

)

101,520

(Decrease)/increase in cash and cash equivalents

(395,543

)

45,988

Cash and cash equivalents at beginning of year

2

4,113,430

4,067,442

Cash and cash equivalents at end of year

2

3,717,887

4,113,430

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

2021

2020

£

£

Profit before taxation

1,484,459

1,520,606

Depreciation charges

387,864

343,616

Profit on disposal of fixed assets

(390

)

(1,650

)

Government grants

(131,538

)

(542,073

)

Finance costs

20,660

31,139

Finance income

(75,462

)

(9,628

)

1,685,593

1,342,010

(Increase)/decrease in stocks

(89,411

)

8,314

(Increase)/decrease in trade and other debtors

(61,595

)

561,512

(Decrease)/increase in trade and other creditors

(570,550

)

1,175,749

Cash generated from operations

964,037

3,087,585

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

3,717,887

4,113,430

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

4,113,430

4,768,340

Bank overdrafts

-

(700,898

)

4,113,430

4,067,442

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.21

Cash flow

At 31.12.21

£

£

£

Net cash

Cash at bank and in hand

4,113,430

(395,543

)

3,717,887

4,113,430

(395,543

)

3,717,887

Liquid resources

Current asset investments

753,752

320,618

1,074,370

753,752

320,618

1,074,370

Debt

Debts falling due within 1 year

(63,342

)

(14,509

)

(77,851

)

Debts falling due after 1 year

(950,489

)

101,535

(848,954

)

(1,013,831

)

87,026

(926,805

)

Total

3,853,351

12,101

3,865,452

1.	STATUTORY INFORMATION

Stairways (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.

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

Financial Reporting Standard 102 - reduced disclosure exemptions

FRS 102 allows a qualifying entity certain disclosure exemptions. The company has taken advantage of the following available exemptions:

1 - the requirement to prepare a statement of cash flows;

2 - financial instruments disclosures, including categories of financial instruments; and

3 - the disclosure of key management personnel remuneration in total.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2021.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in profit or loss from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirers interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interest in the net assets of consolidated subsidiaries are identified separately from the group's equity therein.

The companies subsidiaries MDF Profiles Limited and Brankbrook Limited are not included in these group financial statements as the exemption relating to the exclusion of dormant companies claimed under S477 and S479A of the Companies Act 2006.

Significant judgements and estimates

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. For the year under review there were no specific areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates had a material bearing on the financial statements.

Turnover and other income

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company's activities. Turnover is shown net of value added tax, returns, rebates and discounts and is recognised when the amount of revenue can be reliably measured, and it is probable that future economic benefits will flow to the entity.

Other income comprises rents received from investment property and environmental income under the Renewable Heat Incentive.

Rental income is recognised in accordance with the terms of the tenancy agreement. Environmental income is recognised when the amount can be reliably measured and it is probably that the economic benefits will flow to the entity.

Goodwill

Goodwill on business acquisitions is recorded as the excess of consideration paid over the assets acquired. Acquired goodwill is reviewed annually by the directors for any impairment in value. Goodwill is amortised over the estimated useful life of 10 years on a straight line basis.

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 property

-

2% on cost

Plant and machinery

-

20% on cost and 15% on cost

Fixtures and fittings

-

25% on cost

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in 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.

Financial instruments

Financial instruments are classified and accounted for as financial assets, financial liabilities or equity instruments, according to the substance of the contractual arrangement. Equity instruments are those that entitle the holder to a residual interest in the company's assets after deducting all of its liabilities.

Basic financial instruments are recognised at amortised cost, except for investments in non-convertible preference and non-puttable ordinary shares which are measured at fair value, with changes recognised in profit or loss. Derivative financial instruments are initially recorded at cost and thereafter at fair value with changes recognised in profit or loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, 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. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Trade debtors

Trade debtors are amounts due from customers for goods sold in the ordinary course in business.

Trade debtors are measured initially at the transaction price. They are subsequently measured at amortised costs using the effective interest method, less provision for impairment. A provision for impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.

3.

TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the group.

An analysis of turnover by class of business is given below:

2021

2020

£

£

Sale of goods

10,828,142

9,807,026

Office accommodation fees

606,419

563,603

11,434,561

10,370,629

Turnover for the year from continuing operations all arose in the UK.

4.	OTHER OPERATING INCOME

2021

2020

£

£

Rents received

142,054

724,374

Sundry receipts

214,534

110,743

Government grants

131,538

542,073

488,126

1,377,190

5.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

2,739,869

2,794,334

Social security costs

234,461

219,574

Other pension costs

52,195

61,732

3,026,525

3,075,640