Kirby Jones Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02068210 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

KIRBY JONES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14

DIRECTORS:

J R Davies

B R Pritchard

N D Sullivan

C J D Taylor

SECRETARY:

B R Pritchard

REGISTERED OFFICE:

W.R.Davies

Conwy Road

Llandudno Junction

Gwynedd

LL31 9BA

REGISTERED NUMBER:

02068210 (England and Wales)

AUDITORS:

D.R.E. & Co. (Audit) Limited

Kingsland House

39 Abbey Foregate

Shrewsbury

Shropshire

SY2 6BL

The directors present their strategic report for the year ended 31 December 2021.

REVIEW OF BUSINESS

The W R Davies Motor group operates car and commercial dealerships throughout North Wales and the Staffordshire areas. Kirby Jones Limited is a 100% subsidiary of W R Davies (Motors) Limited, the parent company of the group.

The company currently operates three Ford dealerships in Llangefni, Llandudno Junction and Rhyl, as well as a Renault and Dacia dealership in Llandudno Junction.

2021 has proved to have been another extraordinary year after the previous good trading performance in 2020, which was despite the Covid-19 lockdown implications.

Trading in 2021 was affected by national lockdown in the start of the year followed by shortage in semiconductors across the whole motor industry which caused reduced new stock availability.

After the lockdowns of 2020 there seemed to have been a stored-up demand for vehicles and servicing which allowed the company to have an incredibly strong performance in the 2021 year which required the business to adapt to a different way of trading - utilising online and remote sales, we were able to continue the business successfully and indeed have continued this trend into the first quarter of 2022.

In summary through a combination of reduced costs and an adaption of our business model to further embrace online sales, the company has managed to produce a record result, which the directors are very pleased with.

Key performance indicators

The company monitors its performance using key performance indicators. The company considers its main key performance indicators to be turnover, gross profit, shareholders' funds and gross margin percentage. Performance on these measures is shown below and is in line with expectations of the board.

2021

2020

% change

Turnover

£49,635,581

£42,082,792

17.95%

Gross profit

£2,725,494

£1,415,092

92.60%

Shareholders' funds

£4,926,338

£4,224,847

16.60%

Gross margin

5.49%

3.36%

PRINCIPAL RISKS AND UNCERTAINTIES

General economic circumstances

As mentioned before, as the country returns to normal, the Group will have to re-adapt to operating without significant government support, however the directors are optimistic that as long as the COVID-19 infection rate continues on its current trajectory, there will be strong demand for its products and services.

Information systems

The company operates and is very reliant on its IT and computerised management systems. The interruption of this could have an adverse effect on the company's ability to manage its business.

Competition

Motor distribution is a very competitive sector, and as such the business is always at risk from aggressive competitors.

The group believes that its superior customer service will help mitigate this risk.

Franchise agreements

The company holds franchises with Ford, Renault and Dacia. All of these agreements are subject to termination under certain circumstances. The loss of any of the franchises held could have a material effect on the business.

Regulatory compliance

The company is regulated by the FCA for sales of insurance products. In 2013 the FCA also took over responsibility for sale of consumer credit. The Group has to therefore comply with the regulatory regime and failure to do this could result in fines or even the cessation of some business. This risk is mitigated by the company through close monitoring of regulatory compliance.

ON BEHALF OF THE BOARD:

J R Davies - Director

11 May 2022

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a motor retailer.

DIVIDENDS

An interim dividend of £1 per share was paid on 31 December 2021. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2021 will be £ 500,002 .

DIRECTORS

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

J R Davies

B R Pritchard

N D Sullivan

C J D Taylor

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen, in accordance with s414C(11) of the Companies Act, to set out in the company's strategic report information regarding the review of business and a description of the principal risks and uncertainties facing the company.

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, D.R.E. & Co. (Audit) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J R Davies - Director

11 May 2022

Opinion

We have audited the financial statements of Kirby Jones Limited (the 'company') for the year ended 31 December 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, 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 December 2021 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 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 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 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 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the motor retail sector;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, Financial Conduct Authority, employment, environmental, health and safety legislation. We also consider regulations such as General Data Protection Regulations, Anti money laundering, Consumer Rights Act throughout the audit..

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to their knowledge of actual, suspected and alleged fraud; and

- reviewing the client's system notes and internal controls.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- review of the cashbook to identify any large or unusual transactions that appear to have no commercial basis.

- assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Aled Davies F.C.C.A. (Senior Statutory Auditor)

for and on behalf of D.R.E. & Co. (Audit) Limited

Kingsland House

39 Abbey Foregate

Shrewsbury

Shropshire

SY2 6BL

11 May 2022

TURNOVER

4

49,635,581

42,082,792

Cost of sales

(46,910,087

)

(40,667,700

)

GROSS PROFIT

2,725,494

1,415,092

Administrative expenses

(1,649,431

)

(1,500,178

)

1,076,063

(85,086

)

Other operating income

664,302

1,085,981

OPERATING PROFIT

6

1,740,365

1,000,895

Interest payable and similar expenses

7

(200,250

)

(324,308

)

PROFIT BEFORE TAXATION

1,540,115

676,587

Tax on profit

8

(338,622

)

(134,520

)

PROFIT FOR THE FINANCIAL YEAR

1,201,493

542,067

PROFIT FOR THE YEAR

1,201,493

542,067

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,201,493

542,067

FIXED ASSETS

Tangible assets

10

3,409,001

3,265,268

Investment property

11

800,000

800,000

4,209,001

4,065,268

CURRENT ASSETS

Stocks

12

7,739,695

11,869,457

Debtors

13

862,520

1,243,173

Cash at bank

488,699

71,476

9,090,914

13,184,106

CREDITORS

Amounts falling due within one year

14

8,160,934

12,828,135

NET CURRENT ASSETS

929,980

355,971

TOTAL ASSETS LESS CURRENT LIABILITIES

5,138,981

4,421,239

CREDITORS

Amounts falling due after more than one year

15

-

(54,635

)

PROVISIONS FOR LIABILITIES

19

(212,643

)

(141,757

)

NET ASSETS

4,926,338

4,224,847

CAPITAL AND RESERVES

Called up share capital

20

500,002

500,002

Revaluation reserve

21

1,159,311

1,182,767

Retained earnings

21

3,267,025

2,542,078

SHAREHOLDERS' FUNDS

4,926,338

4,224,847

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

J R Davies - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2020

500,002

2,216,555

1,206,223

3,922,780

Changes in equity

Dividends

-

(240,000

)

-

(240,000

)

Total comprehensive income

-

565,523

(23,456

)

542,067

Balance at 31 December 2020

500,002

2,542,078

1,182,767

4,224,847

Changes in equity

Dividends

-

(500,002

)

-

(500,002

)

Total comprehensive income

-

1,224,949

(23,456

)

1,201,493

Balance at 31 December 2021

500,002

3,267,025

1,159,311

4,926,338

1.	STATUTORY INFORMATION

Kirby Jones Limited is a private company, limited by shares, incorporated and registered in England and Wales. The company's registered number and registered office address can be found on the Company information page.

2.	STATEMENT OF COMPLIANCE

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

3.	ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

These financial statements are for the individual entity only.

The financial statements are presented in Sterling (£), rounded to the nearest £1.

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 requirement of paragraph 3.17(d);

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

Turnover

Turnover represents net invoiced sales of goods, excluding value added tax.

Vehicle sales are recognised at the earlier of the delivery of the vehicle to the customer or the point at which the customer becomes legally committed to purchasing the vehicle. Bonus income for the sale of vehicles is recognised in the period to which it relates for general fleet bonuses. Bonus income relating to specific vehicles is recognised when that vehicle is sold. The sale of parts and servicing is recognised when goods and services are provided.

Tangible fixed assets

Freehold land and property are stated under the valuation method.

Other tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs and borrowing costs capitalised.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is shorter:

Freehold land

- not provided

Freehold property

- 2% and 15% straight line

Short leasehold

- 2% straight line

Plant & machinery

- 10%, 15%, 25% and 50% straight line

Fixtures & fittings

- 15% straight line

Motor vehicles

- 15% and 25% straight line

Government grants

Grants of a revenue nature are recognised in income over the period in which the company recognises the related costs, for which the grant is intended to compensate.

During the year, the company received government grants of £165,209 (2020: £648,224) under the Coronavirus Job Retention Scheme (CJRS), which is recognised in income. The company has also benefited from other forms of government assistance during the period, including rates relief.

Investment property

Investment property is shown at fair value. 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.

Consignment stocks are recognised in the balance sheet by the company as it considers that it enjoys the benefits and rewards along with the risks of ownership. The corresponding liability is recorded in liabilities due within one year.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

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.

If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables and bank and other loans, 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. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

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 balance sheet date.

Deferred tax

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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases 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.

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.

4.

TURNOVER

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

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

31.12.21

31.12.20

£

£

Sale of goods

47,378,460

39,976,793

Rendering of services

2,257,121

2,105,999

49,635,581

42,082,792

5.	EMPLOYEES AND DIRECTORS

31.12.21

31.12.20

£

£

Wages and salaries

2,569,960

2,584,175

Social security costs

284,988

254,552

Other pension costs

148,272

89,753

3,003,220

2,928,480

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

31.12.21

31.12.20

Directors

1

1

Other direct and indirect staff

111

120

112

121

31.12.21

31.12.20

£

£

Directors' remuneration

164,878

136,855

Directors' pension contributions to money purchase schemes

48,505

7,169

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

Money purchase schemes

1

1

6.	OPERATING PROFIT

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

31.12.21

31.12.20

£

£

Hire of plant and machinery

889

1,684

Depreciation - owned assets

191,396

160,222

Depreciation - assets on hire purchase contracts

29,430

27,679

Loss on disposal of fixed assets

1,574

57

Auditors' remuneration

12,800

10,000

Auditors' remuneration for non audit work

12,610

14,520

Operating lease - land & buildings

40,000

40,000

Income from operating leases

(27,500

)

(30,000

)

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.21

31.12.20

£

£

Stocking loan interest

159,080

284,308

Interest paid to group

40,000

40,000

Corporation tax interest

1,170

-

200,250

324,308

8.

TAXATION

Analysis of the tax charge

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

31.12.21

31.12.20

£

£

Current tax:

UK corporation tax

267,736

134,189

Deferred tax

70,886

331

Tax on profit

338,622

134,520

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:

31.12.21

31.12.20

£

£

Profit before tax

1,540,115

676,587

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

292,622

128,552

Effects of:

Expenses not deductible for tax purposes

5,035

1,187

Capital allowances in excess of depreciation

(29,921

)

-

Depreciation in excess of capital allowances

-

8,789

Group relief surrendered by group companies

-

(4,339

)

Deferred tax

70,886

331

Total tax charge

338,622

134,520

9.

DIVIDENDS

31.12.21

31.12.20

£

£

Ordinary shares of £1 each

Interim

500,002

240,000