Industrial Power Units Property Limited - Limited company accounts 20.1

REGISTERED NUMBER: 00641876 (England and Wales)

STRATEGIC REPORT, DIRECTORS' REPORT AND

AUDITED FINANCIAL STATEMENTS

FOR THE PERIOD

1 NOVEMBER 2019 TO 31 DECEMBER 2020

FOR

INDUSTRIAL POWER UNITS PROPERTY LIMITED

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Report of the Independent Auditors

5

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

R T Beebee

I Cleary

SECRETARY:

S J Beebee

REGISTERED OFFICE:

2 Cygnus Way

West Bromwich

West Midlands

B70 0XB

REGISTERED NUMBER:

00641876 (England and Wales)

AUDITORS:

Magma Audit LLP

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

The directors present their strategic report for the period 1 November 2019 to 31 December 2020.

REVIEW OF BUSINESS

As highlighted in last year's strategic report, the company underwent a reorganisation on 1 November 2019 whereby our 3 trading divisions were demerged out into their own separate company's with a holding company above each of them. The demerger of these divisions enables them to focus on their own area of expertise. The company now only contains the freehold property at Cygnus Way and is now a pure property investment company providing office and warehouse space.

Comparisons with the prior year are impossible to make, given the only income we have this year is in relation to rental income. The balance sheet is far less complicated with the material items being the investment property and the loan secured thereon.

The directors are pleased to report a small profit for the year after interest but before the inclusion of the revaluation of the investment property. Having sought the advice of a property consultant and gauged the demand for properties of a similar make up to ours, the directors have assessed the fair value of the property and revalued it to £3.75m following its transition to an Investment Property.

One of the key performance indicators (KPI) of the business is rental income for the year which is shown on page 7 of the financial statements. The directors also track the ratio of EBITDA to interest to ensure that it does not fall below 1.5, together with ensuring that loans do not at any time exceed 70% of the property value. Both of these indicators were satisfactorily upheld for the current period.

PRINCIPAL RISKS AND UNCERTAINTIES

The main risk to the business is ensuring that the property remains occupied, so that the company is able to repay its borrowings. The property is currently let and it is hoped that the rental income for 2021 will be higher than that achieved in 2020. Due to Covid-19, the company made the conscious decision to conserve cash wherever possible and took the opportunity to take a capital repayment holiday on its borrowings. Capital repayments are due to commence again in May 2021.

The company uses financial instruments, which includes cash and bank borrowings along with other liquid resources. The main risks arising from the company's financial instruments are interest rate risk, cashflow risk, credit and liquidity risk and price risk. The mitigation of these risks is discussed in more detail below.

Interest rate risk

The company manages its exposure to interest rates through entering facilities at rates that are at a floating margin above bank base rate for a period of 5 years from the signing of the loan agreement.

Cashflow risk

The main cashflow risks, under normal trading circumstances are the recovery of trade debts from its tenants. The company undertakes a regular review of outstanding debtors to ensure that cash collection is in line with the company's expectations.

Credit and liquidity risk

The company's principal financial assets are trade receivables and the credit risk is primarily attributable to this. The directors continually monitor trade debtors to ensure that debtors are recoverable and cash is being received in line with due dates. In order to maintain liquidity the company must ensure that it has sufficient funds to repay its borrowings as they fall due. The directors regularly review cashflow forecasts and credit facilities available to the company to help ensure that there is sufficient working capital available to it.

Price risk

The company's income derives solely from rental income. Therefore, price risk is managed by having rental agreements in place with the tenants occupying the property.

The directors regularly review the risks and uncertainties that the company faces. Forecasts and cashflows have been prepared to ensure that the directors have identified the company's needs for the foreseeable future. Having reviewed these, the directors are happy with the financial position of the company and believe that there are no issues with regards the going concern of the company.

ON BEHALF OF THE BOARD:

R T Beebee - Director

18 August 2021

The directors present their report with the financial statements of the company for the period 1 November 2019 to 31 December 2020.

PRINCIPAL ACTIVITIES

The principal activities of the company in the period under review were those of a property investment company.

DIVIDENDS

Interim dividends in specie were paid amounting to £1,985,440 in addition to dividends paid to shareholders of £37,099. The directors recommend that no final dividends will be paid.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 November 2019 to the date of this report.

R T Beebee

I Cleary

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he 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, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R T Beebee - Director

18 August 2021

Opinion

We have audited the financial statements of Industrial Power Units Property Limited (the 'company') for the period ended 31 December 2020 which comprise the Statement of 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 2020 and of its profit for the period 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

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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our 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 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 the audit:

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue 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.

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.

Paul Orton ACA FCCA (Senior Statutory Auditor)

for and on behalf of Magma Audit LLP

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

19 August 2021

TURNOVER

4

248,561

12,754,573

Cost of sales

-

(7,748,213

)

GROSS PROFIT

248,561

5,006,360

Administrative expenses

(260,351

)

(5,072,762

)

(11,790

)

(66,402

)

Other operating income

19,703

210,707

Fair value movements

751,300

-

OPERATING PROFIT

6

759,213

144,305

Interest payable and similar expenses

7

(53,106

)

(145,023

)

PROFIT/(LOSS) BEFORE TAXATION

706,107

(718

)

Tax on profit/(loss)

8

(100,466

)

(10,805

)

PROFIT/(LOSS) FOR THE FINANCIAL PERIOD

605,641

(11,523

)

FIXED ASSETS

Intangible assets

10

-

211,750

Tangible assets

11

-

3,382,562

Investments

12

-

81

Investment property

13

3,750,000

-

3,750,000

3,594,393

CURRENT ASSETS

Stocks

14

-

1,602,742

Debtors

15

30,742

2,770,123

Cash at bank and in hand

31,188

229,284

61,930

4,602,149

CREDITORS

Amounts falling due within one year

16

(264,976

)

(3,226,280

)

NET CURRENT (LIABILITIES)/ASSETS

(203,046

)

1,375,869

TOTAL ASSETS LESS CURRENT LIABILITIES

3,546,954

4,970,262

CREDITORS

Amounts falling due after more than one year

17

(2,129,248

)

(2,188,171

)

PROVISIONS FOR LIABILITIES

20

(141,313

)

(88,800

)

NET ASSETS

1,276,393

2,693,291

CAPITAL AND RESERVES

Called up share capital

21

34,004

34,004

Revaluation reserve

22

343,489

444,552

Capital redemption reserve

22

6,000

6,000

Fair value reserve

22

609,990

-

Retained earnings

22

282,910

2,208,735

SHAREHOLDERS' FUNDS

1,276,393

2,693,291

The financial statements were approved by the Board of Directors and authorised for issue on 18 August 2021 and were signed on its behalf by:

R T Beebee - Director

Called up

share

Retained

Revaluation

capital

earnings

reserve

£

£

£

Balance at 1 November 2018

34,004

2,289,649

448,297

Changes in equity

Dividends

-

(73,136

)

-

Total comprehensive income

-

(11,523

)

-

Depreciation written back

-

3,745

(3,745

)

Balance at 31 October 2019

34,004

2,208,735

444,552

Changes in equity

Dividends

-

(2,022,539

)

-

Total comprehensive income

-

605,641

-

Depreciation written back

-

101,063

(101,063

)

Fair value adjustments

-

(751,300

)

-

Deferred tax transfer

-

141,310

-

Balance at 31 December 2020

34,004

282,910

343,489

Capital

Fair

redemption

value

Total

reserve

reserve

equity

£

£

£

Balance at 1 November 2018

6,000

-

2,777,950

Changes in equity

Dividends

-

-

(73,136

)

Total comprehensive income

-

-

(11,523

)

Balance at 31 October 2019

6,000

-

2,693,291

Changes in equity

Dividends

-

-

(2,022,539

)

Total comprehensive income

-

-

605,641

Fair value adjustments

-

751,300

-

Deferred tax transfer

-

(141,310

)

-

Balance at 31 December 2020

6,000

609,990

1,276,393

1.	STATUTORY INFORMATION

Industrial Power Units Property Limited is a limited company, registered in England and Wales. Its registered office address is 2 Cygnus Way, West Bromwich, West Midlands, B70 0XB and the registered number is 00641876.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Within the current year, the reporting period has changed to 31 December 2020 to cover a 14 month period. This was carried out to ensure coterminous year ends across the group. Therefore comparative amounts presented in the financial statements are not directly comparable, particularly in light of the fact that the majority of trade and assets were transferred to a separate legal entity on 1 November 2019.

The financial statements are presented in Sterling (£).

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 requirement of paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Industrial Power Units Property Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Industrial Power Units Property Holdings Limited, 2 Cygnus Way, West Bromwich, West Midlands, B70 0XB.

Turnover

Revenue from the sale of goods 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.

Rental income from investment properties is recognised on a straight line basis over the period of the lease.

Intangible assets - goodwill

Acquired goodwill is written off in equal annual instalments overs its estimated useful economic life of 5 years.

Tangible fixed assets

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:

Freehold land and buildings

2% straight line

Plant and machinery

15% straight line

Fixtures, fittings & computer equipment

15% - 100% straight line

Motor vehicles

25% straight line

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.

Investments in subsidiaries

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Investment property

Investment property is carried at fair value determined annually by the directors based on guidance from professional valuers and derived from the current market rents and investment property yields for comparable real estate. No depreciation is provided. Changes in fair value are recognised in the Statement of Comprehensive Income.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Stocks

Stocks 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.

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.

Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12

‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset , with the net amounts presented in the financial statements, when there is a legally 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.

(i) Financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

(ii) Financial liabilities

Basic financial liabilities, including creditors and bank 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. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of

business from suppliers. Amounts 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Taxation

The tax expense for the year comprises current and deferred tax.

Tax is recognised in profit or loss except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Both current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Research and development

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Operating leases

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.

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments 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.

Employee benefits

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.

Government grants

Government grants are presented within deferred income on the Balance Sheet with recognition of income being in line with the annual depreciation charge of the associated capital asset.

Going concern

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 despite the ensuing global pandemic. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

(i) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. The annual amortisation charge for capital grants directly reflects the depreciation charge of such assets. See note 11 for the carrying amount of the property, plant and equipment, and note 2 for the useful economic lives for each class of assets.

(ii) Stock provisioning

The company supplies engine starting, engine control, fuel polishing systems and oil conditioning products for critical diesel and gas engine applications and is subject to changing consumer demands and design trends. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around the anticipated saleability of the stock. See note 14 for the net of provisioning carrying amount of stock.

(iii) Impairment of debtors

The company makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 15 for the net carrying amount of trade debtors.

(iv) Investment property valuation

The company carries its investment property at fair value. The directors obtain independent advice from a firm of Chartered Surveyors and estimate fair value using this information.

4.

TURNOVER

The turnover and profit (2019 - loss) before taxation are attributable to the principal activities of the company.

An analysis of turnover by geographical market is given below:

Period

1/11/19

to

Year Ended

31/12/20

31/10/19

£

£

United Kingdom

248,561

8,864,013

Europe

-

1,570,430

Rest of the World

-

2,320,130

248,561

12,754,573

The principal source of income during the year was rental income from the investment property.

5.	EMPLOYEES AND DIRECTORS

Period

1/11/19

to

Year Ended

31/12/20

31/10/19

£

£

Wages and salaries

-

2,470,136

Social security costs

-

278,338

Other pension costs

-

292,582

-

3,041,056

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

Period

1/11/19

to

Year Ended

31/12/20

31/10/19

Directors

-

2

Administration and operations staff

-

84

-

86

Period

1/11/19

to

Year Ended

31/12/20

31/10/19

£

£

Directors' remuneration

-

135,029

Directors' pension contributions to money purchase schemes

-

58,819

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

Money purchase schemes

-

2

6.	OPERATING PROFIT

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

Period

1/11/19

to

Year Ended

31/12/20

31/10/19

£

£

Hire of plant and machinery

-

12,138

Other operating leases

-

8,547

Depreciation - owned assets

-

204,999

Depreciation - assets on hire purchase contracts

-

86,512

Profit on disposal of fixed assets

-

(17,881

)

Goodwill amortisation

-

72,000

Foreign exchange differences

-

(8,646

)

Research and development costs

-

46,345

Government grants

(12,453

)

(24,964

)

Fees payable to the company's auditor for the audit of the company's financial statements

5,000

18,145