Basis of preparationThe financial statements are prepared in sterling, which is the functional currency of the company. The accounting policies have, unless otherwise stated, been applied consistently to all periods presented in these financial statements. There are no judgements made by the directors in the application of these accounting policies that have a significant effect on the financial statements, or estimates with a significant risk of material adjustment in the next financial year.The financial statements are prepared on the historical cost basis.Going concernThe directors have assessed the impact that Covid-19 may have on the ability of the company to continue as a going concern. The company is a critical supplier to essential industries, and as a result of which it has been operating at near normal capacity throughout the pandemic. Turnover and profits are comparable with 2019 and the company continues to be profitable and cash generative in 2021. Furthermore, due to the strong balance sheet and cash position the company has not had to take advantage of the Government furlough, loan or deferment schemes.Accordingly, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future which is at least 12 months from the approval of these financial statements. For these reasons, the directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.Research and developmentExpenditure on research and development activities is recognised in the profit and loss account as an expense as incurred.StocksStocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks and in bringing them to their existing location and condition. Provision is made for obsolete or slow-moving stock.Trade and other debtors / creditorsTrade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.Operating leasesPayments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit and loss over the term of the lease as an integral part of the total lease expense.Interest receivable and similar incomeInterest receivable and similar income includes interest receivable on funds invested. Interest income is recognised in profit or loss as it accrues, using the effective interest method.Foreign currenciesTransactions in foreign currencies are translated into Sterling at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to Sterling at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation are recognised in the profit and loss account.Defined contribution plans and other long term employee benefitsA defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.TaxationTax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income. Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense. Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.