Pimlico Group Limited - Limited company accounts 20.1

REGISTERED NUMBER: 11138569 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2021

FOR

PIMLICO GROUP LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated profit and loss account

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Financial Statements

14

DIRECTORS:

S C Mullins OBE

S C Mullins

REGISTERED OFFICE:

1 Sail Street

London

SE11 6NQ

REGISTERED NUMBER:

11138569 (England and Wales)

AUDITORS:

KBSP Partners LLP

Chartered Accountants

Statutory Auditors

Harben House

Harben Parade

Finchley Road

LONDON

NW3 6LH

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

REVIEW OF BUSINESS

These accounts consolidate Pimlico Group Limited together with its wholly owned subsidiaries Pimlico Plumbers Limited and Pimlico Holdco Limited. After consolidation adjustments, the only significant trading entity in the group is Pimlico Plumbers Limited.

During the year under review the group saw a return to the steady growth in turnover that it had experienced prior to the outbreak of Covid-19 and has achieved its best ever revenue numbers.

The group as a provider of essential services continued to operate through the lockdown periods. Whilst it noticed some discretionary projects were delayed by customers during lockdown, post lockdown these projects were returned to and by the year-end the group had returned to its usual mix of emergency and planned projects.

During the year under review the group confirmed its arrangement with Lombard Vehicle Leasing to replace 104 vehicles, this plan was rolled out substantially in the year and completed shortly thereafter.

The profit for the year after taxation amounted to £4,901,328 (2020: £3,858,267). The results are shown on page nine. The directors consider the results and the position at the year end to be satisfactory.

KEY PERFORMANCE INDICATORS

Turnover increased by £5,890,767 when compared to 2020 representing a 13.6% increase. It is noted that during the first lockdown period (March 2020 -June 2020), turnover decreased by approximately £2 million when compared to 2019, it then recovered such that by August 2020 the group was continuing to grow year on year.

Gross profit to sales percentage increased to 39.4% from 38.8% achieved in 2020, this being driven by increased efficiencies.

Pre tax profits increased by £1,261,265 over those achieved in 2020 driven by the increase in turnover.

PRINCIPAL RISKS AND UNCERTAINTIES

The group continues to plan to mitigate risks inherent in the business arising from normal trading and the current economic climate and health and safety issues.

The risks facing the group are assessed on an ongoing basis. The directors evaluate the likelihood and potential impact of risks and ensure appropriate action is taken to mitigate them. The key risk and mitigating factors are:

COVID-19

The group has continued to trade throughout the various lockdown periods as a provider of essential services. This is in accordance with government guidance. Should government guidance change materially it could have a significant impact on the group's ability to continue to trade.

MARKET RISK

The market is very competitive. The group competes with a number of competitors of varying size in areas including price, range, quality and service. Failure to compete effectively in any of these areas could have an adverse impact on financial results; the group mitigates its exposure by ensuring that the business is differentiated from the competition by the quality of its service and its customer care.

ON BEHALF OF THE BOARD:

S C Mullins - Director

14 September 2021

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

PRINCIPAL ACTIVITIES

The group's principal activities during the year continued to be that of plumbing, heating, electrical, roofing and general property maintenance.

DIVIDENDS

No interim dividend was paid during the year. The group paid final dividends during the year as follows:

First final dividend

£80

- 31 August 2020

Second final dividend

£80

- 30 November 2020

Third final dividend

£80

- 28 February 2021

Fourth final dividend

£80

- 31 May 2021

£320

The total distribution of dividends for the year ended 31 May 2021 was £3,200,000.

FUTURE DEVELOPMENTS

The directors aim to maintain the management policies which have resulted in the group's growth and profitability in recent years. In the coming year they expect the group to increase its sales and profitability.

EVENTS SINCE THE YEAR END

Post year end S C Mullins OBE, the ultimate controlling party, entered into a contract to sell his shareholding in Pimlico Group Limited to a third party. The contract is due to complete soon after the date of the audit report. The expectation is that the group will continue to expand under the new ownership.

DIRECTORS

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

S C Mullins OBE

S C Mullins

FINANCIAL INSTRUMENTS

The group's principal financial instruments comprise bank balances, debtors and creditors and as a result, there is exposure to liquidity, cash flow risks, and credit risks. The group regularly reviews amounts owed to creditors to make sure that cash is available to make all payments as and when they fall due. The group periodically monitors amounts due from debtors to ensure these are recovered as soon as possible. These steps helps to mitigate liquidity, cash flow and credit risks.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

S C Mullins - Director

14 September 2021

Opinion

We have audited the financial statements of Pimlico Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2021 which comprise the Consolidated profit and loss account, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated 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 group's and of the parent company affairs as at 31 May 2021 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

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

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

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

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages three and four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. The following laws and regulations were identified as being of significance to the entity:

- Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.

- Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include health and safety legislation and gas safety rules.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

Michael Marks FCA (Senior Statutory Auditor)

for and on behalf of KBSP Partners LLP

Chartered Accountants

Statutory Auditors

Harben House

Harben Parade

Finchley Road

LONDON

NW3 6LH

15 September 2021

TURNOVER

4

49,170,600

43,279,833

Cost of sales

29,793,546

26,478,648

GROSS PROFIT

19,377,054

16,801,185

Administrative expenses

13,202,825

12,042,564

6,174,229

4,758,621

Other operating income

5

192,047

248,450

OPERATING PROFIT

7

6,366,276

5,007,071

Interest receivable and similar income

200

4,009

6,366,476

5,011,080

Interest payable and similar expenses

8

152,556

58,425

PROFIT BEFORE TAXATION

6,213,920

4,952,655

Tax on profit

9

1,312,592

1,094,388

PROFIT FOR THE FINANCIAL YEAR

4,901,328

3,858,267

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

4,901,328

3,858,267

Profit attributable to:

Owners of the parent

4,901,328

3,858,267

Total comprehensive income attributable to:

Owners of the parent

4,901,328

3,858,267

FIXED ASSETS

Intangible assets

12

139,808

183,600

Tangible assets

13

2,402,205

1,525,327

Investments

14

-

-

2,542,013

1,708,927

CURRENT ASSETS

Stocks

15

16,000

16,000

Debtors

16

11,517,059

9,776,461

Cash at bank and in hand

2,802,390

1,354,157

14,335,449

11,146,618

CREDITORS

Amounts falling due within one year

17

7,387,658

6,413,536

NET CURRENT ASSETS

6,947,791

4,733,082

TOTAL ASSETS LESS CURRENT LIABILITIES

9,489,804

6,442,009

CREDITORS

Amounts falling due after more than one year

18

(1,907,683

)

(642,379

)

PROVISIONS FOR LIABILITIES

21

(163,595

)

(82,432

)

NET ASSETS

7,418,526

5,717,198

CAPITAL AND RESERVES

Called up share capital

22

5,000

5,000

Retained earnings

23

7,413,526

5,712,198

SHAREHOLDERS' FUNDS

7,418,526

5,717,198

The financial statements were approved by the Board of Directors and authorised for issue on 14 September 2021 and were signed on its behalf by:

S C Mullins - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

10,000

10,000

10,000

10,000

TOTAL ASSETS LESS CURRENT LIABILITIES

10,000

10,000

CAPITAL AND RESERVES

Called up share capital

22

5,000

5,000

Retained earnings

23

5,000

5,000

SHAREHOLDERS' FUNDS

10,000

10,000

Company's profit for the financial year

3,200,000

3,500,000

The financial statements were approved by the Board of Directors and authorised for issue on 14 September 2021 and were signed on its behalf by:

S C Mullins - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2019

5,000

5,353,931

5,358,931

Changes in equity

Dividends

-

(3,500,000

)

(3,500,000

)

Total comprehensive income

-

3,858,267

3,858,267

Balance at 31 May 2020

5,000

5,712,198

5,717,198

Changes in equity

Dividends

-

(3,200,000

)

(3,200,000

)

Total comprehensive income

-

4,901,328

4,901,328

Balance at 31 May 2021

5,000

7,413,526

7,418,526

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2019

5,000

5,000

10,000

Changes in equity

Dividends

-

(3,500,000

)

(3,500,000

)

Total comprehensive income

-

3,500,000

3,500,000

Balance at 31 May 2020

5,000

5,000

10,000

Changes in equity

Dividends

-

(3,200,000

)

(3,200,000

)

Total comprehensive income

-

3,200,000

3,200,000

Balance at 31 May 2021

5,000

5,000

10,000

Cash flows from operating activities

Cash generated from operations

32

8,588,706

4,410,985

Interest paid

(34,927

)

(2,155

)

Interest element of finance lease payments paid

(117,629

)

(56,270

)

Tax paid

(1,571,768

)

(873,444

)

Net cash from operating activities

6,864,382

3,479,116

Cash flows from investing activities

Purchase of intangible fixed assets

(13,883

)

(104,194

)

Purchase of tangible fixed assets

(2,218,367

)

(132,115

)

Sale of tangible fixed assets

61,400

25,935

Interest received

200

4,009

Net cash from investing activities

(2,170,650

)

(206,365

)

Cash flows from financing activities

New finance lease loans

2,100,060

578,887

Capital repayments in year

(497,832

)

(131,118

)

Amount introduced by directors

4,072,904

3,799,021

Amount withdrawn by directors

(5,720,631

)

(2,667,339

)

Equity dividends paid

(3,200,000

)

(3,500,000

)

Net cash from financing activities

(3,245,499

)

(1,920,549

)

Increase in cash and cash equivalents

1,448,233

1,352,202

Cash and cash equivalents at beginning of year

33

1,354,157

1,955

Cash and cash equivalents at end of year

33

2,802,390

1,354,157

1.	STATUTORY INFORMATION

Pimlico Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	STATEMENT OF COMPLIANCE

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

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the group's accounting policies.

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

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the disclosure exemption available to qualifying entities not to prepare an individual company Statement of Cash Flows, as permitted by FRS 102.

Basis of consolidation

The group was formed in January 2018 as a result of a business combination that falls within the criteria of a group reconstruction as specified in Part 1 of Schedule 6 of Statutory Instrument 2008/410 and FRS 102, which requires the consolidated accounts to be prepared in accordance with the principles of merger accounting.

These accounts consolidate the accounts of Pimlico Group Limited and its subsidiaries Pimlico Plumbers Limited and Pimlico Holdco Limited.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which gives it control of the financial and operating policies of the entity it accounts for that as a subsidiary.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Going concern

The group meets its day-to-day working capital requirements through careful management of working capital positions. After reviewing cash flow forecasts, profit and loss forecasts, and making necessary enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its financial statements.

Significant judgements and 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.

i) Critical judgement in applying the group's accounting policies

There are no judgements in applying the group's accounting policies that have a significant risk of causing a material misstatement to the financial statements.

ii) Critical accounting estimates and assumptions

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(a) Useful economic lives of tangible and intangible assets

The annual depreciation charge for tangible assets and annual amortisation charge for intangible assets are sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and, where applicable, the physical condition of the assets.

(b) Taxation

The group establishes provisions based on reasonable estimates, for possible consequences of audits by the tax authorities.

Turnover

Turnover is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied and services rendered, net of returns, discounts and rebates allowed by the group and value added tax.

Turnover recognition: -

Supply of goods - turnover is recognised when the goods are supplied or supplied and fitted which represents the time at which the significant risks and rewards of ownership have been transferred to the customer.

Supply of services - turnover is recognised in the period in which the services are rendered in accordance with the stage of completion of the transaction, as determined on a straight line basis, where the outcome of the transaction can be measured reliably.

Intangible fixed assets

Intangible fixed assets comprise cherished vehicle registration number plates and computer software. Intangible fixed assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives as follows:

Cherished number plates - 10 years

Computer software - 2 years

Amortisation is charged to administrative expenses in the profit and loss account.

Where factors, such as technological change or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.

The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful economic life as follows:-

Leasehold improvements - 25% straight line

Plant and machinery - 25% straight line

Fixtures and fittings - 25% straight line

Motor vehicles - 25% straight line

Depreciation is charged to administrative expenses in the profit and loss account.

Tangible assets are stated at 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.

The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the statement of comprehensive income.

Stocks

Stocks are valued at the lower of cost and estimated selling price less costs of completion and sale.

Taxation

Taxation expense for the year comprises current tax recognised in the reporting period. Tax is recognised in the Consolidated profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity respectively.

Current tax is recognised at the amount of tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the year end.

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.

Financial instruments

The group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

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.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet 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.

Debtors

Basic financial assets, including trade and other debtors, cash and bank balances, are initially recognised at transactions 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.

Creditors

Basic financial liabilities, including trade and other creditors and loans, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at present value of the future receipts discounted at a market rate of interest. Such instruments are subsequently carried at amortised cost, using the effective interest method.

Cash and cash equivalents

Cash includes cash in hand and deposits held with banks. Cash equivalents are highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value.

Employee benefits

The group provides a range of benefits to its directors and eligible employees as explained below:

(i) Short term 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.

(ii) Defined contribution pension plans

The group makes contributions to money purchase pension schemes for the benefit of its employees. Once the contributions have been paid, the group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the schemes are held separately from the group in independently administered funds.

Dividends

Final equity dividends are recognised when declared and paid.

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 deduction, net of tax, from the proceeds.

Leased assets

At inception the group assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.

(i) Finance leased assets

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.

(ii) Operating leased assets

Leases that do no transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

Contingent liabilities

Contingent liabilities arise as a result of past events when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future events no wholly within the group's control. Contingent liabilities are not recognised but are disclosed in the accounts, unless the probability of an outflow of resources is remote in which case no disclosure is made.

Government grants

During the Coronavirus pandemic, the group utilised the government support scheme Coronavirus Job Retention Scheme (CJRS). Income under this scheme is classified as a government grant and accounted for on an accruals basis, and recognised in the profit and loss account in the period in which the associated costs for which grants are intended to compensate are incurred. The grant income is reported as "Other operating income" in the consolidated profit and loss account.

4.

TURNOVER

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

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

2021

2020

£

£

Supply of goods and materials

9,179,162

8,179,937

Supply of services

39,991,438

35,099,896

49,170,600

43,279,833

The turnover generated by the group, both by source and destination, all relates to the United Kingdom.

5.	OTHER OPERATING INCOME

Included in other operating income is government grants received totalling £151,844 (2020: £242,533) relating to the Coronavirus Job Retention Scheme.

6.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

5,865,045

5,510,469

Social security costs

587,683

816,890

Other pension costs

119,915

133,247

6,572,643

6,460,606

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

2021

2020

Directors

2

2

Administration

70

94

Operations

106

87

178

183

The average number of employees during the year for the parent company was Nil (2020: Nil).

2021

2020

£

£

Directors' remuneration

904,940

920,850

Directors' pension contributions to money purchase schemes

5,933

6,245

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

Money purchase schemes

1

1

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

740,938

763,261

Pension contributions to money purchase schemes

5,933

6,245

7.	OPERATING PROFIT

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

2021

2020

£

£

Depreciation - owned assets

1,341,489

1,143,946

Profit on disposal of fixed assets

(61,400

)

(1,308

)

Cherished number plates amortisation

26,425

28,784

Computer software amortisation

31,250

31,250

Auditors' remuneration

33,500

30,000

Amounts paid under operating leases

1,356,285

1,335,195

Included in auditors' remuneration above is £5,500 (2020: £5,000) relating to the audit of these consolidated financial statements.