East Bilney Coachworks Limited - Limited company accounts 20.1

REGISTERED NUMBER: 06737577 (England and Wales)

STRATEGIC REPORT, DIRECTORS' REPORT AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

FOR

EAST BILNEY COACHWORKS LIMITED

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Independent Auditors' Report

5

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTORS:

Miss J Baldwin

Mr C Baldwin

Mr D Baldwin

Mr M Baldwin

SECRETARY:

Miss J Baldwin

REGISTERED OFFICE:

Fakenham Road

East Bilney

Dereham

Norfolk

NR20 4HP

REGISTERED NUMBER:

06737577 (England and Wales)

SENIOR STATUTORY AUDITOR:

Mr Christopher Glen Bidgood

AUDITORS:

CG LEE Limited

Chartered Certified Accountants

Statutory Auditors

Ingram House

Meridian Way

Norwich

Norfolk

NR7 0TA

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

REVIEW OF BUSINESS

Throughout the 2020 financial year the company operated across 6 sites, with a new site at Thetford becoming operational towards the end of the year. The company has seen a decrease in turnover due to the effects of the emergency measures introduced to combat the outbreak of Covid-19. However, the company has remained profitable in a challenging economic environment.

The directors view turnover, gross margin and overheads as the company's key financial performance indicators.

2020

2019

Turnover (£)

14,544,278

17,303,516

Gross profit %

32.37%

31.96%

Net profit %

5.94%

6.31%

COVID-19 PANDEMIC

The outbreak of the coronavirus disease Covid-19 in March 2020 has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of self-imposed quarantine periods, social distancing and travel bans, have caused material disruption to business globally resulting in an economic slowdown.

The duration and impact of the Covid-19 outbreak is unknown at this time, as is the efficacy of the UK government and fiscal interventions designed to stabilise economic conditions. As a result it is not possible to reliably estimate the length and severity of these developments nor the impact on the financial position and results of the company in future periods.

Management have reviewed the potential impact of Covid-19 on the business and as a result the directors are confident as they can be at this time that the company is well placed to meet its liabilities as they fall due and that the company will continue to operate as a going concern.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors have reviewed the risks and uncertainties facing the company and the strength of the balance sheet is considered adequate for those to which the company is exposed. These include the overall economic environment and increasing levels of competition for turnover.

The principal risks facing the company include:

Liquidity and credit risk

The company funds the operational and working capital requirements through its retained profits. At 31 December 2020, the company had a cash balance which the directors believe is sufficient to maintain robust liquidity in the business as it continues to trade through the Covid-19 pandemic.

The company sells to most of its customers on customary credit terms and is, as a result, exposed to the usual credit risk and cash flow risk associated with this form of trading. It manages this risk through rigorous credit control procedures on a continual basis.

Covid-19 may impact the ability of customers to make payments, however the majority of new debts are still being collected in accordance with agreed terms. Certain employees were furloughed to reduce staff costs under the Coronavirus Job Retention Scheme, however, despite being eligible, the company did not need to make use of the loan schemes backed by the UK government due to having robust cash reserves.

Human resource risk

Failure to maintain a sufficiently skilled workforce and retain key staff can adversely affect any business.

Coronavirus risk

The coronavirus pandemic presents risks which may impact upon various aspects of the company's operations. This may include a reduction in customer demand, interruption to supply chains and exposure to the impact of any government restrictions or policies. The situation is being closely monitored on a day to day basis by the directors and various contingency plans are in place to address and limit the impact to the business of these risks. The directors have also considered the cash position of the company and the capacity to raise funds to mitigate the impact of any issues arising, as required.

OUTLOOK AND FUTURE DEVELOPMENTS

The company's financial performance is dependent on the economic recovery post Covid-19, however, it is believed that the business is well positioned to take advantage of opportunities that arise out of the current economic disruptions.

ON BEHALF OF THE BOARD:

Mr C Baldwin - Director

11 March 2022

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of repairing motor vehicles.

DIVIDENDS

The company paid dividends of £160,000 during the year.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report.

Miss J Baldwin

Mr C Baldwin

Mr D Baldwin

Mr M Baldwin

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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.

AUDITORS

CG LEE Limited, having expressed their willingness to continue in office, will be deemed reappointed for the next financial year in accordance with Section 487(2) of the Companies Act 2006 unless the company receives notice under Section 488(1) of the Act.

ON BEHALF OF THE BOARD:

Mr C Baldwin - Director

11 March 2022

Opinion

We have audited the financial statements of East Bilney Coachworks Limited (the 'company') for the year ended 31 December 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement 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 December 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report 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 Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters 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 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 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 an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

-

obtaining an understanding of the company's systems and controls and performing tests to confirm the operation of these;

-

enquiry of management and those charged with governance;

-

review of accounting records to identify any indication of non-compliance with laws and regulations;

-

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

-

performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.

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

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 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.

Mr Christopher Glen Bidgood (Senior Statutory Auditor)

for and on behalf of CG LEE Limited

Chartered Certified Accountants

Statutory Auditors

Ingram House

Meridian Way

Norwich

Norfolk

NR7 0TA

11 March 2022

TURNOVER

14,544,278

17,303,516

Cost of sales

9,836,971

11,773,660

GROSS PROFIT

4,707,307

5,529,856

Administrative expenses

4,483,183

4,444,787

224,124

1,085,069

Other operating income

637,017

5,000

OPERATING PROFIT

6

861,141

1,090,069

Interest receivable and similar income

2,079

1,438

863,220

1,091,507

Interest payable and similar expenses

7

-

85

PROFIT BEFORE TAXATION

863,220

1,091,422

Tax on profit

8

168,066

213,102

PROFIT FOR THE FINANCIAL YEAR

695,154

878,320

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

695,154

878,320

FIXED ASSETS

Intangible assets

10

9

9

Tangible assets

11

1,061,612

627,165

Investments

12

20

20

1,061,641

627,194

CURRENT ASSETS

Stocks

13

190,736

180,354

Debtors

14

2,698,078

2,949,927

Cash at bank and in hand

3,039,131

2,116,362

5,927,945

5,246,643

CREDITORS

Amounts falling due within one year

15

2,777,739

2,745,950

NET CURRENT ASSETS

3,150,206

2,500,693

TOTAL ASSETS LESS CURRENT LIABILITIES

4,211,847

3,127,887

CREDITORS

Amounts falling due after more than one year

16

(482,202

)

-

PROVISIONS FOR LIABILITIES

21

(161,225

)

(94,621

)

NET ASSETS

3,568,420

3,033,266

CAPITAL AND RESERVES

Called up share capital

22

1,000

1,000

Retained earnings

23

3,567,420

3,032,266

SHAREHOLDERS' FUNDS

3,568,420

3,033,266

The financial statements were approved by the Board of Directors and authorised for issue on 11 March 2022 and were signed on its behalf by:

Mr C Baldwin - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2019

1,000

2,253,946

2,254,946

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

878,320

878,320

Balance at 31 December 2019

1,000

3,032,266

3,033,266

Changes in equity

Dividends

-

(160,000

)

(160,000

)

Total comprehensive income

-

695,154

695,154

Balance at 31 December 2020

1,000

3,567,420

3,568,420

Cash flows from operating activities

Cash generated from operations

27

1,526,097

786,923

Interest paid

-

(85

)

Tax paid

(235,000

)

(231,460

)

Net cash from operating activities

1,291,097

555,378

Cash flows from investing activities

Purchase of tangible fixed assets

(663,918

)

(111,948

)

Sale of tangible fixed assets

10,083

-

Interest received

2,079

1,438

Net cash from investing activities

(651,756

)

(110,510

)

Cash flows from financing activities

New loans in year

590,090

-

Loan repayments in year

-

(207,232

)

Amount introduced by directors

230,721

163,274

Amount withdrawn by directors

(377,383

)

(254,610

)

Equity dividends paid

(160,000

)

(100,000

)

Net cash from financing activities

283,428

(398,568

)

Increase in cash and cash equivalents

922,769

46,300

Cash and cash equivalents at beginning of year

28

2,116,362

2,070,062

Cash and cash equivalents at end of year

28

3,039,131

2,116,362

1.	STATUTORY INFORMATION

East Bilney Coachworks 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.

The company's principal activities are set out in the Directors Report on page 4.

2.	STATEMENT OF COMPLIANCE

The financial statements of East Bilney Coachworks Limited have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland" ("FRS 102") and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements are prepared on a going concern basis, under the historical cost convention as modified by the recognition of certain financial assets and liabilities measured at fair value. The functional and presentation currency of these financial statements is pound sterling which is the company's functional currency.

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. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

The principal accounting policies of the company applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Going concern

At the date of approval of the accounts, the UK is experiencing high levels of economic, social and political uncertainty surrounding Covid-19. As such, in assessing the company's ability to adopt the going concern basis in preparation of the financial statements, the directors have considered the financial impact that Covid-19 may have on the business.

The directors will continue to monitor the situation closely, but at the date of signing the accounts, with cash reserves and substantial unsecured assets available to provide access to external funding if required, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have therefore prepared the financial statements on a going concern basis.

Turnover

Turnover represents the fair value of services provided during the year. Turnover is recognised as contract activity progresses and the right to consideration is earned. Fair value reflects the amount expected to be recoverable from clients. Turnover excludes value added tax.

Unbilled turnover on individual contracts is included as accrued income within trade debtors.

Employee benefits

Short term benefits, including holiday pay and other similar non-monetary benefits are recognised as an expense in the period in which the service is received.

Goodwill

Goodwill arises on the acquisition of a business and represents the excess of the fair value of the consideration given over the aggregate of the fair value of the separate net assets acquired. Goodwill is capitalised and stated at cost less accumulated amortisation and provisions for impairment. Goodwill is amortised evenly over its estimated useful economic life, which in the opinion of the directors, is 5 years.

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

Tangible fixed assets are recorded at cost less accumulated depreciation. Cost includes the original purchase price of the asset plus costs attributable to bringing the asset to its working condition for its intended use. Land is not depreciated. Depreciation on other assets is charged from the time when tangible fixed assets are brought into use and is calculated so as to write off the cost of fixed assets, less their estimated residual values, over the expected useful economic lives of the assets concerned. The principal annual rates used for this purpose are as follows:

Plant and machinery etc

- 25% of reducing balance, 20% on cost and 15% reducing balance

Government grants

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grant will be received. These grants are recognised within other operating income on a systematic basis over the periods in which the related costs towards which they are intended to compensate are recognised as expenses.

Coronavirus Job Retention Scheme (CJRS)

Grants received in relation to the Coronavirus Job Retention Scheme are accounted for on the accruals basis once the related payroll return has been submitted.

Stocks

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

Impairment of non-financial assets

At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset (or asset's cash generating unit) may be impaired. If there is such an indication the recoverable amount of the asset (or asset's cash generating unit) is compared to the carrying amount of the asset (or asset's cash generating unit).

The recoverable amount of the asset (or asset's cash generating unit) is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's (or asset's cash generating unit) continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset.

If the recoverable amount of the asset (or asset's cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in profit or loss, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in profit or loss.

If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset's cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in profit or loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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 balance sheet date.

Deferred taxation

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

Borrowing costs

All borrowing costs are recognised in the statement of comprehensive income in the year in which they are incurred.

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

Investments

Investments held as fixed assets are stated at cost less provision for any permanent diminution in value.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts, where applicable, are shown within borrowings in current liabilities.

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities such as trade and other debtors / creditors, loans from banks and other third parties and loans to related parties.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

4.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that the actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the process of applying the company’s accounting policies, management has made the following judgements and estimates which have the most significant effect on the amounts recognised in the financial statements:

Depreciation of tangible fixed assets

An allowance for depreciation is made against tangible fixed assets and charged to the profit and loss account over the useful economic lives of the assets. The useful economic life assessment of an asset is based on the time in which benefits of the asset are realised to the company. See note 11 for the net carrying value of the tangible fixed assets, and note 3 for the useful economic lives for each class of assets.

Impairment of stocks

The company makes an estimate of the recoverable value of stocks. When calculating the stock provision, management considers the nature and condition of the stock as well as applying assumptions around anticipated saleability of goods held for resale. See note 13 for the net carrying amount of stocks and the related movement in impairment provision.

Impairment of debtors

The directors make an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, the directors consider factors including the credit worthiness and financial conditions of customers. See note 14 for the net carrying amount of the debtors and associated impairment provision.

Going concern

The company's business activities, together with the factors and risks likely to affect its future development, performance and position are set out in the Strategic Report. The directors carry out an annual and periodic forecasting exercise covering the operations of the company and as a result of this and considering possible sensitivities, the directors have a reasonable expectation that the company has adequate resources to continue to meet the obligations of the company as they fall due. Accordingly, the going concern basis has been adopted when preparing these financial statements.

5.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

4,386,272

4,563,679

Social security costs

414,933

421,878

Other pension costs

86,384

82,327

4,887,589

5,067,884

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

2020

2019

Staff

182

178

Directors

4

4

186

182

2020

2019

£

£

Directors' remuneration

116,274

103,651

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

4

4

Key management compensation

All key management personnel are considered to be directors. As such, the key management compensation is equivalent to the directors' emoluments above.

6.	OPERATING PROFIT

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

2020

2019

£

£

Hire of plant and machinery

13,831

10,282

Other operating leases

332,439

300,119

Depreciation - owned assets

221,809

203,685

Profit on disposal of fixed assets

(2,421

)

-

Goodwill amortisation

-

2,716

Auditors' remuneration

14,250

13,250

Operating leases

332,439

300,119

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

£

£

Bank interest

-

21

Corporation tax interest

-

64

-

85

8.

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

101,462

228,879

Prior year under provision CT

-

357

Total current tax

101,462

229,236

Deferred tax

66,604

(16,134

)

Tax on profit

168,066

213,102

UK corporation tax has been charged at 19% (2019 - 19%).

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

863,220

1,091,422

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

164,012

207,370

Effects of:

Expenses not deductible for tax purposes

4,054

5,375

Adjustments to tax charge in respect of previous periods

-

357

Total tax charge

168,066

213,102

Factors that may affect future current and total tax charges

Reductions in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on 26 October 2015 and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. In the 11 March 2020 Budget it was announced that the UK corporation tax rate will remain at the current rate of 19% and not reduce to 17% from 1 April 2020. These changes have been taken into account in measuring deferred tax assets and liabilities at the balance sheet date. These changes are not anticipated to have a material impact on the company's financial statements in future years.

9.

DIVIDENDS

2020

2019

£

£

Ordinary A shares of £1 each

Interim

40,000

25,000

Ordinary B shares of £1 each

Interim

40,000

25,000

Ordinary C shares of £1 each

Interim

40,000

25,000

Ordinary D shares of £1 each

Interim

40,000

25,000

160,000

100,000

10.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 January 2020

and 31 December 2020

13,586

AMORTISATION

At 1 January 2020

and 31 December 2020

13,577

NET BOOK VALUE

At 31 December 2020

9

At 31 December 2019

9

11.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

to

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1 January 2020

79,507

1,129,788

189,938

170,628

1,569,861

Additions

146,473

410,478

63,874

43,093

663,918

Disposals

-

-

-

(31,600

)

(31,600

)

At 31 December 2020

225,980

1,540,266

253,812

182,121

2,202,179

DEPRECIATION

At 1 January 2020

33,735

675,717

136,383

96,861

942,696

Charge for year

15,761

161,504

23,987

20,557

221,809

Eliminated on disposal

-

-

-

(23,938

)

(23,938

)

At 31 December 2020

49,496

837,221

160,370

93,480

1,140,567

NET BOOK VALUE

At 31 December 2020

176,484

703,045

93,442

88,641

1,061,612

At 31 December 2019

45,772

454,071

53,555

73,767

627,165