T.RICHARD_JONES_(BETWS)_L - Accounts

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

Review of the business                

The business was started in 1935 by Mr T Richard Jones and was incorporated in 1971 as T.Richard Jones (Betws) Limited. When Mr T Richard Jones retired, the business was carried on by his two sons, Huw and David. The company is currently run by the third generation of the Jones family, Dafydd, Owain and John plus the only non family director, Richard Llewellyn.

The Company’s headquarters are located in Ammanford but contracts with both public and private sector clients throughout South Wales.

It’s main activities are the construction and development of commercial, industrial and residential property and civil engineering. In addition, it has a Waste Management division, operates a Haulage and Plant Hire division and has a Fabrication and Joinery division all geared up to support the construction activities.

The Company enjoys a number of competitive advantages, including strong brand recognition in its heartland trading region which enables the Company to obtain a number of high value contracts and maintain strong trading results in recent years. During 2020, turnover did increase by 18.85% to £30,656,121 as a number of Covid-19 related projects were undertaken at the end of the year.

The asset register maintained by the Company is an important aspect of the business and the strategy is to proactively enhance and maintain its plant and machinery to facilitate the continued expansion of the Company’s activities. With total assets less current liabilities increasing during the year to £9,949,284 and excellent liquidity ratio at the year end of 1.98, the company is well placed to continue the undertaking of large contracts and fund further acquisitions should such opportunities arise.

As a family run business our approach is personal and our ambitions are client led. Our advertised statement…"Building On A Firm Foundation”… reflects our history of stability and consistency in the past and our aspirations for the future. Our workload is testament to our business ethos as the majority of our work is from repeat custom. Undoubtedly the commitment and enthusiasm displayed by all our staff has contributed significantly to our success and we thank them all for their continued efforts. Our focus for the future is to maintain this culture of continuous development to the benefit of our customers, our Company and our employees.        

Key Performance Indicators                

     31 July 2020 31 July 2019    Variance

Turnover      £30,656,121     £25,793,635     18.85%

Gross Profit          £1,831,821     £2,160,972    (12.73%)    

Gross Profit %     5.98%      8.38%        

Profit before tax     £315,872     £354,920    (11.00%)        

Profit before tax %     1.03% 1.37%        

Environmental matters

The company recognises the importance of its environmental responsibilities and accepts that concern for the environment and all employees is an integral and fundamental part of its corporate business strategy. The company monitors its impact on the environment and endeavours to design and implement policies and processes to reduce any damage that might be caused by the company's activities. Initiatives include the safe disposal of commercial waste, the minimisation of waste going to landfill, reducing energy consumption and the use of renewable natural resources where possible.

Principal risks and uncertainties

The principal risk facing the company is the strength of the UK economy as a result of the worldwide Covid-19 pandemic as well as its decision to leave the EU and following from that the necessity for continued new build projects. The company's performance is heavily influenced by the competition it faces in acquiring new contracts. Given the company's growing and excellent reputation to date, it has developed successful relationships within the region, in conjunction with a strong order book which extends beyond 12 months it is considered that such risks have to a large extent been mitigated.

Financial risk management objectives and policies

The company operates a number of risk management policies designed to minimise its exposure to financial risk including key financial controls and targets implemented on every project which are reviewed monthly by the board to ensure that risk is mitigated and opportunities explored fully.

Liquidity and cash flow risk                

The Company produces detailed management accounts and forecasts, which enable the directors to monitor the cash position and to ensure that there is sufficient liquidity and cash flow to minimise the risk of the Company being unable to pay its debts as they fall due.

Interest rate risk                

The Company utilises a number of financial instruments including hire purchase contracts and finance lease obligations in order to finance its operations. The primary risk faced by the Company as a result of its use of these financial instruments is interest rate risk. The Company's hire purchase and finance lease borrowings, which are issued at fixed rates, expose the Company to fair value interest rate risk. These fixed rate borrowings arise on the acquisition of the Company's larger plant, machinery and vehicle purchases. As before, the directors actively manage this risk through prudent use of the Company's cash reserves, considering whether each acquisition should be financed or purchased outright.

Credit risk            

The Company operates a number of policies and controls to minimise credit risk. All customers are subject to a detailed credit review prior to any terms being agreed. Directors must authorise any larger value contracts and the Company will only conduct business with customers deemed to be credit-worthy.

Price risk            

The Company actively manages price risk by agreeing terms with suppliers prior to entering into any transactions with customers.

Covid-19

In light of the situation arising in the UK and globally in respect of Covid-19 and the measures taken by the UK Government to contain the virus, the day to day operations of the business has been disrupted. The extent of the impact of Covid-19 is unclear and it is difficult to evaluate all of the potential implications on the company’s customers, suppliers and the wider economy.

The directors have prepared updated and sensitised forecasts for the coming year and have taken steps to ensure the company has sufficient funding to bridge the period of disruption and to manage the company’s cash flow requirements as appropriate during this period of uncertainty, thus enabling the company to meet its obligations as they fall due.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 July 2020.

The principal activity of the company continued to be that of building contractors and plant hire operators.

The company is a wholly owned subsidiary and the interests of the group directors are disclosed in the financial statements of the parent company.

The results for the year are set out on page 7.

Final dividends were paid during the year amounting to £17,600 (2019: £17,600).

The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. In making their assessment the directors have reviewed the balance sheet, the likely future cash flows of the business and have considered the facilities that are in place at the date of signing the report.

The company meets its day to day working capital requirements from its cash reserves and bankig facilities. Following the situation arising post year end in the UK and globally in respect of Covid-19 and the measure taken by the UK Government to contain the virus, at the date of signing the company is safely up and running and reporting results in line with expected new budgeted levels. With no indication of when or where infection prevention measures would be re-enforced, the company's forecasts and projections show that the company will be able to comfortably operate within those facilities.

The directors have also analysed the cash flow requirements for various scenarios where disruption from Covid-19 occurs to its customer base or supply chain. The directors have a reasonable expectation that with the continued support of its bankers and funders in the form of facility levels which it has historically been provided with, in the scenarios reviewed the company will be able to continue to operate within those facilities. However, the extent of any future impact of Covid-19 is unclear and it is difficult to evaluate all the potential implications on the company’s trade, customers, suppliers and the wider economy.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

On 7 September 2020 Group Audit Service Limited trading as Baldwins Audit Services changed its name to Azets Audit Services Limited. The name they practice under is Azets Audit Services and accordingly they have signed their report in their new name.

The directors are responsible for preparing the annual 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;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of T.Richard Jones (Betws) Limited (the 'company') for the year ended 31 July 2020 which comprise the statement of comprehensive income, the balance sheet, the 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 FRS 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 July 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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 and the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the 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.

As explained more fully in the directors' responsibilities statement, 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 is 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.

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 auditor's 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.

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

The profit and loss account has been prepared on the basis that all operations are continuing operations.

T.Richard Jones (Betws) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Betws Industrial Park, Foundry Road, Betws, AMMANFORD, Carmarthenshire, UK, SA18 2LS.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income; and

• Section 33 ‘Related Party Disclosures’.

The financial statements of the company are consolidated in the financial statements of T R J Holdings Limited. These consolidated financial statements are available from its registered office, Betws Industrial Park, Foundry Road, Ammanford, Carmarthenshire, SA18 2LS.

The financial statements have been prepared on a going concern basis which assumestrue that the company will continue in operational existence for the foreseeable future. In making their assessment the directors have reviewed the balance sheet, the likely future cash flows of the business and have considered the facilities that are in place at the date of signing the report.

The company meets its day to day working capital requirements from its cash reserves and bankig facilities. Following the situation arising post year end in the UK and globally in respect of Covid-19 and the measure taken by the UK Government to contain the virus, at the date of signing the company is safely up and running and reporting results in line with expected new budgeted levels. With no indication of when or where infection prevention measures would be re-enforced, the company's forecasts and projections show that the company will be able to comfortably operate within those facilities.

The directors have also analysed the cash flow requirements for various scenarios where disruption from Covid-19 occurs to its customer base or supply chain. The directors have a reasonable expectation that with the continued support of its bankers and funders in the form of facility levels which it has historically been provided with, in the scenarios reviewed the company will be able to continue to operate within those facilities. However, the extent of any future impact of Covid-19 is unclear and it is difficult to evaluate all the potential implications on the company’s trade, customers, suppliers and the wider economy.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements..

The turnover shown in the profit and loss account represents amounts invoiced during the year for construction and building services provided, exclusive of Value Added Tax.

Revenue from the sale of services is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of construction services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks represent land, materials and construction consumables which are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the company's accounts. Deferred tax is provided in full on timing differences which result in an obligation to pay more (or less) tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws.

Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the asset.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The company operates a defined contribution scheme for certain employees and directors. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.

The company also operates a defined benefit scheme for certain employees and directors, although this scheme was closed to new members on 30 June 2002. For the defined benefit scheme, an independent actuary completes a valuation every three years, and in accordance with their recommendations, contributions are paid to the scheme so as to secure the benefits as set out in the rules. The operating and financing costs of the scheme are recognised in the profit and loss account. The shortfall in the fair value of the plan assets as compared to the benefit obligation, adjusted for any unrecognised actuarial gains or losses, is provided in full in the balance sheet. The assets of the scheme are held separately from those of the company.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Deferred government grants in respect of capital expenditure are treated as deferred income and depending on the nature of the expenditure they are either credited to the profit and loss account over the estimated useful life of the asset or, in the case of investment properties, carried forward until all relevant terms and conditions have been fully satisfied.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

During the year and at the balance sheet date the company task in house experienced quantity surveyors with quantifying the amounts recoverable on each contract in progress. Cost of work done to date including materials, subcontractors and staff is taking into consideration before arriving at a valuation by reference to the stage of completion. The company include provisions in their valuations for unforeseen costs based on their risk and likelihood of them occurring.

An analysis of the company's turnover is as follows:

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2019 - 4).

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 2 (2019 - 2).

The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

In addition to the investment properties included in the above figure of £191,600, there are further investment properties valued at £1.2m included in the carrying value of Freehold Land and Buildings in note 10.

All investment properties were valued by director Mr D H Jones based on their original cost, which in the opinion of Mr D H Jones was not materially different to their current market values.

Included in Other creditors are amounts owed to directors of £157,196 (2019: £173,012).

Other borrowings include £39,187 (2019: £38,028) in respect of amounts owed to the spouses of directors Mr H Jones and Mr D Jones.

Obligations under hire purchase agreements are secured against the assets to which they relate.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 2-4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The company previously operated a defined benefit scheme, which is now closed to new members. With effect from 1 July 2002 the defined contribution stakeholder pension plan was established and in-service members ceased to accrue benefits within the defined benefit section, although such members' pension benefits remain linked to their final salary at retirement and their length of service before 1 July 2002.

The disclosures outlined in this note refer only to the defined benefit section of the scheme, unless otherwise stated.

The last full actuarial valuation of the scheme was carried out by a qualified independent actuary as at 31 March 2019 and updated on an approximate basis to 31 July 2020. The contributions made by the company during the year totalled £198,000 (2019: £198,000), net of administration charges.

The company expects to contribute £198,000 to its defined benefit pension scheme in the year ending 31 July 2021.

Assumed life expectations on retirement at age 65:

Amounts recognised in the profit and loss account

Amounts taken to other comprehensive income

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

Movements in the present value of defined benefit obligations

The defined benefit obligations arise from plans which are wholly unfunded.

Movements in the fair value of plan assets

The actual return on plan assets was £1,123,000 (2019 - £253,000).

Fair value of plan assets at the reporting period end

During the year the company entered into the following transactions with related parties:

The ultimate parent company is T.R.J Holdings Limited, a company incorporated in England and Wales. The registered office is Foundry Road, Betws, Ammanford, SA18 2LS

The parent company prepares consolidated group accounts in which this company is included, copies of which are available to the public and can be obtained from the registered office address stated above.